All Posts from February 24, 2014

Phosphates

California, Central Florida, Eastern Cornbelt, Great Lakes, Jordan, Market Watch, North Africa, Northeast, Northern Plains, Pacific N.W., Phosphate Rock, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: Winter Storm Seneca pushed a trough of low pressure into the Southeast late last week, causing widespread precipitation of up to 1.5 inches. Florida saw localized totals of up to 2.5 inches.

The U.S. Drought Monitor reported that areas of abnormal dryness in the East shrank in the wake of recent storms, and no areas of drought were reported for the week on the eastern seaboard.

Planting season in Florida is expected to kick off in late February or March. A handful of truck sales into Florida were quoted at $465/st FOB for DAP last week. Mosaic’s posted price was $430/st FOB for February and March DAP, with MAP listed at a $20/st FOB premium.

The Central Florida DAP market retreated to a range of $430-$465/st FOB, based on limited transactions and Mosaic’s posted price, down from the previous price of $480/st FOB. No MAP sales were reported, though that product was said to command an additional $5-$10/st FOB over DAP.

U.S. Gulf: Trading on the river cooled following the run-up of the previous reporting period, continuing an alternating cycle of explosive growth and cautious restraint that has defined the barge market in recent weeks.

Confirmed DAP transactions were quoted as high as $493/st FOB, but sources claimed cargoes could still be had for as little as $480/st FOB. Rumors of a $495/st FOB transaction were floated, but went unconfirmed.

Demand for MAP was slight and the product was quoted at a $5-$10/st FOB premium above DAP, though speculation persisted that a DAP premium could emerge for a short time in the near future. At least one source claimed DAP to be already operating at a $5/st FOB surcharge to MAP.

DAP supply continued to dwindle on reports of delayed shipments from Morocco, and speculation was rampant on whether March deliveries from that country would arrive on schedule or be pushed back to April.

Unconfirmed rumors put a Chinese cargo of lower nutrient-level MAP on imminent arrival.

Terminal and warehouse prices kept flat and were quoted at $490-$510/st FOB at all points on the river. Business was said to be scarce as end-users either suffered sticker shock from the previous week’s price explosion or waited for a break in the weather to make purchases.

Lock closures on the upper Mississippi River in Wisconsin, Illinois, and Missouri originally slated for reopening in mid-March may be extended due to the harsh winter, according to reports, and repairs to the Melvin Price lock, north of St. Louis, Mo., were likely to cause delays through the project’s projected Jun. 1 completion date. Rock removal at Thebes continued to slow transit during daylight hours and was estimated at 40 percent completion.

Transit at Spanish Moss (MM 534) on the lower Mississippi was expected to be limited to daylight hours through Mar. 1 due to high water conditions, and Industrial Lock in the New Orleans area experienced 25-30 hour delays due to high traffic volume on the river.

The 4 p.m. Feb. 20 check on the commodities market found prices of corn, soybeans, and wheat considerably elevated.

March 2014 corn contracts were $4.5575/bushel, up from $4.405/bushel for the previous reporting period. Corn for May 2014 was posted at $4.6225/bushel, higher in comparison to $4.465/bushel the week before. December 2014 corn contracts checked in at $4.6875/bushel, an increase from the previous week’s $4.5625/bushel.

The soybean price for March 2014 rose to $13.5825/bushel last week, up from $13.4425/bushel a week earlier. Soybeans for May 2014 were posted at $13.4775/bushel, higher than the $13.305/bushel of the previous reporting period, while November soybeans were put at $11.4525/bushel, up from $11.3375/bushel the week before.

Wheat for March 2014 swelled to $6.1625/bushel, up from the previous week’s $5.955/bush

Ag chemical fire empties small Iowa town

News, News Briefs

Northwood, Iowa — A smoky agricultural chemical fire, first thought to involve sulfuric acid, caused evacuation of this small Iowa town of approximately 2,000 residents for the biggest part of the day Thursday, Feb. 20. According to emergency management authorities, most of those affected were transported by buses to the town of Kensett, about six miles south on Highway 65 after word went out that a fire erupted in one of the hangers at Northwood Municipal Airport where fertilizers and other chemicals were stored and possibly mixed for crop dusting. The business was identified as Northland Ag Products. At least four people went to the hospital complaining of breathing problems, but there were no reports of serious injury. Officials initially indicated that the chemicals might include sulfuric acid; however, that proved not to be the case. Sgt. Emergency Management Director Ray Huftalin told Green Markets, "There was no acid involved. It was mainly an insecticide." But the chemicals that were involved did cause heavy smoke. The Worth County Emergency Management treated the fire as "a dangerous situation." As conditions improved in the afternoon, residents were allowed back into their homes.

Agrium potash miners escape fire

News, News Briefs

Vanscoy, Sask. — Some 54 Agrium Inc. miners escaped a fire at the company’s Vanscoy Potash Operation on Feb. 15, however, they had to spend the night in the mine prior to the escape. According to Agrium, a fire was reported in the mine on Feb. 14 at about 10:00 p.m. It started on a piece of underground mining equipment. When the fire started the operator activated the fire suppression system, but was unable to extinguish the fire. At that point all employees were evacuated to designated refuge areas, which can be sealed off and have phones, food, water, and other supplies. All of the workers were able to reach the refuge areas and an emergency response team was immediately activated to extinguish the fire and bring the workers back above ground. The response took place throughout the night and was completed at about noon Saturday, Feb. 15. Agrium said the mill had rock stored above ground so production was not significantly impacted. On Feb. 19, Agrium said the company was mining again in the south block of the mine, but that the north block (which was where the fire was) was still down as part of the investigation into the fire.

Worker dies from Cory mining accident

News, News Briefs

Cory, Sask. — A 31 year-old miner died after an accident at Potash Corp. of Saskatchewan Inc.’s potash mine in Saskatchewan Feb. 17. He was struck in a “ground fall” incident around 3:30 a.m., when ore fell and struck him. CPR was administered and he was taken to the hospital, where he passed away. He was a three-year employee at the mine and had a two-year-old son. Another employee was also taken to the hospital as a precaution with non-life-threatening injuries. PotashCorp told Green Markets that it was the first such incident since 2005, which occurred at the Lanigan mine. The Cory mine, which employs 400, remained closed Feb. 18. As of Feb. 20, PotashCorp said the Cory mine was running on a 10 and 4 schedule. It was moving into a four-day-off period, with the mine expected back up after that down time. The facility is back to reprocessing red material into white product.

Agrium puts part of Advance Tech business on market

Breaking Industry News

Agrium Inc. reports that it has begun the process to divest part of its former Advanced Technology unit, specifically its Turf and Ornamental and Direct Solutions businesses. Agrium has reported earlier that it was weighing its options for these businesses, with divestment a possibility. As earlier reported, Agrium has opted to keep its Environmentally Smart Nitrogen (ESN) and Micronutrient businesses, also former Advanced Tech businesses, and put them within its Wholesale unit.

Agrium says it is highly probably that Turf and Ornamental and Direct Solutions will be sold this year. For now, they are labeled as held for sale. Additionally, Agrium recorded the assets at fair value less costs to sell which resulted in a $60 million post-tax write-down within discontinued operations primarily related to goodwill.

Agrium 4Q earnings off 72 percent

Breaking Industry News

Agrium Inc. reported net earnings of $99 million ($0.66 per diluted share) on sales of $2.87 billion for the fourth quarter ending Dec. 31, 2013, compared to the year-ago $354 million ($2.34 per share) on sales of $3.1 billion.

“Agrium’s Retail results were excellent this quarter, particularly considering the decline in nutrient prices that occurred and the compressed fall application season in the U.S.,” said Chuck Magro, Agrium president and CEO. ‘Retail achieved record fourth quarter results due to increased margins across almost all shelves. Our Wholesale business unit, which has more direct exposure to volatility in nutrient markets, saw their results impacted by lower global prices across all nutrients. Global nitrogen and phosphate markets have firmed significantly in early 2014 in response to what we expect will be a strong spring season.”

Full-year earnings were $1.06 billion ($7.20 per share) on sales of $15.7 billion down from 2012’s $1.5 billion ($9.56 per share) and $16 billion, respectively.

Sulfur

Market Watch, Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa: Weather remained a cause for concern as winter storms continued to dump snow and ice on much of the country, negatively affecting shipping and logistics operations. Railcar delays were especially prevalent.

U.S. oil refinery operating rates fell slightly for the week ending Feb. 14, according to data obtained from the U.S. Energy Information Administration. Outputs sank to 86.8 percent on the week, a 0.3 percent drop from the previous reporting period. Operating rates are significantly higher than the same time a year ago, however, when they were reported at 82.9 percent for the seventh week of 2013. The five-year average was 82.8 percent.

The price of molten sulfur at Tampa was $110/lt DEL for the first quarter.

U.S. Gulf: Gulf prill prices held steady at $110-$120/mt FOB based on no reported transactions. Sources said little-to-no tradable supply existed on the Gulf market, and that trading had essentially halted in recent weeks. The price is expected to rise once supply loosens and transactions resume, however.

Vancouver: The spot price of sulfur in Vancouver rose to a range of $160-$180/mt FOB for the week, supported by an international market said to command prices of up to $220/mt DEL in China.

Supply hiccups, largely stemming from weather-related issues and refineries headed into their annual turnaround periods, were said to help buoy prices, but anticipated increases from Russian and Kazakh sources may temper prices as winter weather begins to soften, sources said.

The price of sulfur from Alberta remained at (-)30-(+)37/mt.

West Coast: The price of West Coast sulfur, following the Vancouver market upward, was said to be in a range of $150-$165/mt FOB.

Benelux: The price of Benelux was $130-$144/mt for the first quarter, a $22/mt increase from $108-$122/mt in the fourth quarter.

ADNOC: The ADNOC price for February was $180/mt FOB, a $40/mt FOB increase over the January price of $140/mt FOB.

Potash

Eastern Cornbelt, Great Lakes, Indonesia, Market Watch, Northeast, Northern Plains, Potash Muriate, U.S. Gulf, Western Cornbelt

U.S. Gulf: Potash barge prices narrowed last week, to $315-$320/st FOB, with some still eyeing $325/st FOB for the next round of trading.

Eastern Cornbelt: Potash pricing in the Eastern Cornbelt was quoted solidly at the $370/st FOB mark for red granular, with white granular $7/st higher.

Western Cornbelt: Sources quoted the potash market at $360-$370/st FOB in the region, with most referencing the upper end as the common dealer price. White granular potash was reported at $377/st FOB.

Northern Plains: The potash market had reportedly firmed to $370/st FOB the Twin Cities. Delivered potash in the Dakotas ranged from $350-$375/st, with the market FOB Saskatchewan mines quoted in the $330-$340/st range, depending on grade.

Great Lakes: Potash was quoted solidly at the $370/st FOB level for red granular tons in the Great Lakes region, with white granular potash reported at the $377/st FOB mark.

Northeast: The potash market in the Northeast had firmed $20/st from last report, to $370/st FOB Baltimore and East Liverpool for red granular tons and $377/st FOB for white granular.

Malaysia: Belarusian Potash Co. told the Belarus news service last week that it has won a tender to supply NAFAS Co. in Malaysia with potash through the end of 2014.

Agrium 4Q earnings off 72 percent; Retail reports record; Turf and Ornamental/Direct Solutions for sale

Featured, News

Agrium Inc. reported net earnings of $99 million ($0.66 per diluted share) on sales of $2.87 billion for the fourth quarter ending Dec. 31, 2013, compared to the year-ago $354 million ($2.34 per share) on sales of $3.1 billion.

“Agrium’s Retail results were excellent this quarter, particularly considering the decline in nutrient prices that occurred and the compressed fall application season in the U.S.,” said Chuck Magro, Agrium president and CEO. "Retail achieved record fourth quarter results due to increased margins across almost all shelves. Our Wholesale business unit, which has more direct exposure to volatility in nutrient markets, saw their results impacted by lower global prices across all nutrients. Global nitrogen and phosphate markets have firmed significantly in early 2014 in response to what we expect will be a strong spring season.”

Fourth-quarter Retail net earnings were $123 million on sales of $2.1 billion, up from the year-ago $75 million and $1.97 billion, respectively. Gross profits were up for all five major Retail segments, with crop nutrients posting profits of $178 million on sales of $1.05 billion, up from the year-ago $155 million and $1.1 billion. Retail volumes were up at 1.95 million mt with an average selling price of $539/mt and margin of $92/mt, versus the year-ago 1.68 million mt, $651/mt, and $91/mt, respectively.

Fourth-quarter Wholesale net earnings were $160 million on sales of $963 million, down from the year-ago $447 million and $1.27 billion, respectively. Nitrogen and Potash profits were down, while Phosphates were in the loss column at $4 million on sales of $159 million, compared to the year-ago $47 million and $201 million, respectively. The company cited higher ammonia and phosphate rock costs. Phosphate volumes were up at 285,000 mt with prices at $560/mt and margins at negative $16/mt, compared to the year-ago 279,000 mt, $722/mt and $166/mt, respectively.

Wholesale Nitrogen volumes were 907,000 mt with margins of $144/mt, down from the year-ago 966,000 mt and $304/mt. Urea Sales were off due to outages at Redwater and Carseland. Potash volumes were 344,000 mt with margins of $112/mt, versus the year-ago 341,000 mt and $233/mt.

For the fourth quarter Advanced Technology had a $1 million loss on sales of $67 million, versus the year-ago income of $15 million on sales of $77 million. Figures represent only the Environmentally Smart Nitrogen (ESN) and Micronutrients units, which will be reflected in Wholesale going forward.

Results include a $257 million gain on the purchase of Viterra Inc. assets and a $75 million Australian insurance recovery, as well as a $220 million goodwill impairment on the Australian Landmark assets and a $60 million writedown on Advance Technology assets. Viterra results were also included as they came onboard Oct. 1, 2013, and reflected an EBITDA loss of $12 million, which included $8 million in integration costs.

Full-year earnings were $1.06 billion ($7.20 per share) on sales of $15.7 billion, down from 2012’s $1.5 billion ($9.55 per share) and $16 billion, respectively.

Full-year Retail net income was $748 million on sales of $11.9 billion, compared to 2012’s $757 million and $11.5 billion, respectively. Gross profits were up for all five Retail categories, with crop nutrients at $839 million on sales of $5 billion, versus 2012’s $821 million and $5.1 billion, respectively. Retail sold 8.62 million mt of crop nutrients in 2013 with an average price of $579/mt and a margin of $97/mt, compared to 2012’s 8.16 million mt, $628/mt, and $101/mt, respectively.

Full-year Wholesale net income was $1.03 billion on sales of $4.34 billion, down from 2012’s $1.69 billion on sales of $5.06 billion. Phosphate volumes were 1.03 million mt with margins of $65/mt, versus 2012’s 1.09 million mt and $181/mt.

Full-year

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