All Posts from March 30, 2015

Urea

California, China, Eastern Cornbelt, India, Market Watch, Middle East, Pacific N.W., Pakistan, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: New prompt trades spanned a broad range last week at $268-$295/st FOB. Sources said the high end represented loaded barges that were ready to go, with the low end for those that would load in first-half April.

April trades were reported as $267-$279/st FOB.

Some continued to be surprised that the market has sunk below the $300/st FOB benchmark, but others were not, with one saying that it all depends on how much product the Chinese want to export. While some feel the market will stabilize and not fall below $250/st FOB, others predicted that it could go lower this summer.

Prill prices also continued to soften, and are now called $270-$300/st FOB.

Eastern Cornbelt: The granular urea market remained soft at $340-$355/st FOB in the Eastern Cornbelt, with the low FOB Cincinnati, Ohio.

Western Cornbelt: The granular urea market continued to be quoted in the $335-$355/st FOB range in the Western Cornbelt, with the low reported out of spot locations in southern Missouri and the upper end in the Iowa market.

Sources reported the Catoosa, Okla., urea market in the $320-$325/st FOB range, down another $10-$15/st from the previous week.

California: The granular urea market remained at $400-$405/st FOB import terminals in California. Sources continued to talk of sub-$400/st DEL urea deals in the state, but no new sales were reported at those levels.

Pacific Northwest: Granular urea was quoted at the $385-$390/st level FOB port terminals in the Pacific Northwest, with rail-delivered urea pegged at $430-$433/st in the region for tons shipped from Canada or the Midwest.

Western Canada: Granular urea was steady at $645-$670/mt DEL in Western Canada, with the low reported in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.

Middle East: Sources say the freefall in the global urea market is having an impact on the Arab Gulf. Prices now being quoted out of the region are centered on $260/mt FOB, say traders.

Producers argue that they are getting higher netbacks than that level. Pricing ideas out of Thailand for Arab Gulf material indicate a netback closer to what traders say rather than to the producers’ pricing ideas, however.

Adding to the grief of producers are reports out of Brazil that buyers set their ceiling at $270/mt CFR. At that level, said one trader, seeing the price approach $250/mt FOB is not out of the question.

China: Producers continue to claim that they are getting decent prices for their product. Traders, however, say there are few international sales to point to for confirmation.

International buyers are reluctant to commit to a long-term price out of fear the market has not found its bottom. The tail end of the domestic season is helping stabilize the price, however.

India: Sources say the world is waiting for a tender, and without India buying large tonnage, the urea market will remain in the doldrums.

The new budget that takes effect April 1 does not include any growth in subsidies for urea. Officials from the Modi government have been arguing that India needs to be more self-reliant in urea and farmers need to change their pattern of urea usage.

The latest warning about the overuse of urea came from the prime minister. Narendra Modi called on farmers to adopt a balanced application regime. In a speech in Punjab, Modi said damage to the water table in the region was approaching dangerous levels because of excess urea use.

Urea remains the most popular fertilizer input because it is so heavily subsidized. The Modi government is still looking at plans that will slowly raise t

Transportation

Market Watch, U.S. Gulf

U.S. Gulf: High water conditions were experienced in the Gulf of Mexico area last week, with tow lengths and transit schedules negatively impacted. Shippers also warned of delays in both pickup and drop-off times.

Long lock delays continued for the week. Wait times of 30-36 hours were reported at Industrial Lock, and Algiers Lock saw 26-28 hour transit delays. In the West Canal, the Bayou Sorrel, Colorado, and Brazos Locks all saw wait times greater than 24 hours. Boats transiting through Port Allen Lock experienced delays of 2-4 hours.

Intermittent closures at Leland Bowman Lock were expected to continue through March 31, and work at Calcasieu Lock is slated to end April 10.
Bayou Sorrel will see a complete closure July 15 through Sept. 15 for dewatering and repair operations. Significant delays are anticipated as traffic will be rerouted through Algiers, substantially boosting that lock’s transit volume.

Mississippi River: High water conditions continued on the Lower Mississippi River last week, with delays reported by shipping operators. Southbound traffic through Memphis and Vicksburg-area bridges were limited to daylight passage only.

The auxiliary chamber at Lock 27 on the Upper Mississippi is closed through May 11 due to construction, and the Mel Price Lock auxiliary chamber will be down through April 30 for gate replacement. Shippers said the main chamber was available for use, however.

Illinois River: Recent high flows on the Illinois River subsided last week, allowing for resumed operations at the LaGrange and Peoria Locks. Delays of about an hour were described at O’Brien Lock.

Ohio River: Levels on the Ohio River last week returned to normal above Jeffersonville, Ind., shippers said, allowing both Newburgh and J.T. Meyers Locks to resume normal operation. The dams at Locks 52 and 53 remained down, however, with traffic allowed to pass.

Intermittent auxiliary chamber closures were announced at Newburgh on April 2-6 and April 27-May 19, as well as a main chamber closure on April 6-27. Main chamber closures at Lock 52 are schedule between Aug. 31 and Sept. 11, and again on Sept. 14-25. Shippers warned of major delays during those periods.

On the Monongahela River, the Braddock Lock and Dam river chamber remained offline due to unspecified equipment failure, though the site’s land chamber was available. Intermittent closures through the Masontown Bridge project began March 24 and were anticipated to run through April 8. The site will see a complete channel closure during daylight hours on April 8-9.

Major delays at Winfield Lock on the Kanawha River were reported. Main chamber repairs at the lock, which began on March 23, were slated to extend through June 10.

A total river shutdown at Old Hickory Lock on the Cumberland River will be in effect July 14 through Aug. 4, with dewatering and maintenance efforts planned.

On the Tennessee River, shippers expected delays from main chamber closures at Wilson Lock. Daylight passage was scheduled to be unavailable March 23-28 and May 5-June 11, and the site’s auxiliary chamber will be available during daylight hours only. Shippers reported intermittent closures scheduled at both Guntersville and Pickwick Locks between Aug. 17 and Sept. 30.

Arkansas River: High river flows were reported on the Arkansas River between Lock 7 and the river’s mouth, prompting expectations of transit delays lasting 2-3 days.

Chouteau Lock will see a complete closure May 11-17, and Webbers Falls Lock will shutter completely between Aug. 24 and Sept. 14. Dates were finalized for maintenance at Montgomery Point Lock last week; work at the site will halt all traffic entering and exiting the river between Aug. 24 a

Crops/Weather

California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Grain Futures: As of 4 p.m. on March 26, corn and soybean futures were higher compared to the previous week, but wheat was down.

Corn for May 2015 was $3.9125/bushel, up from $3.735/bushel the week before. The July 2015 price of corn was $3.9925/bushel, up from the prior week’s $3.815/bushel, while trading of December 2015 corn contracts checked in at $4.1475/bushel, a rise from $3.99/bushel the week before.

The May 2015 soybean price was $9.745/bushel, up from the previous week’s $9.6175/bushel. Soybeans for July 2015 were put at $9.7875/bushel, up from $9.6675/bushel at last report, while soybeans for November 2015 firmed to $9.5525/bushel from the prior week’s $9.4625/bushel.

Wheat for May 2015 was $4.9925/bushel, down from the prior week’s $5.12/bushel. July 2015 wheat was also down, at $5.0475/bushel from $5.1575/bushel the week before. September 2015 wheat contracts traded at $5.1425/bushel, down from $5.2475/bushel one week earlier.

Eastern Cornbelt: Wet weather continued to slow spring fieldwork across much of the Eastern Cornbelt last week. Last week’s moisture included a dusting of snow in northern Illinois, with much heavier amounts reported in parts of Wisconsin.

An Illinois contact said his area saw “small movement” of preplant ammonia, phosphates, and potash early in the week, but 1-3 inches of rainfall as the week progressed left standing water in many fields. “Most of our area was within a week of field application starting,” he added.

Western Cornbelt: Sources continued to report spring fieldwork in areas of the Western Cornbelt where weather conditions allowed it. Parts of Iowa endured another round of cold, wet weather, however, with up to 11 inches of snow reported early in the week at Decorah. Heavy snows were also reported in parts of Minnesota on March 23.

Preplant applications continued in Nebraska and Missouri, while Iowa sources reported some activity on light ground. One Iowa contact said most of the application activity last week was on pastures, however, as rains left many fields too muddy.

California: The unusually dry winter in California has taken a toll on the state’s water supply for the coming crop year. Authorities reported that snowpack levels statewide were just 9 percent of average as of March 23, a record low.

California relies on the Sierra Nevada snowpack for up to a third of its water supply. Snow levels in the central and southern Sierra Nevada were at 10 percent of average by March 23, while the northern Sierra Nevada was at seven percent of average.

As a result of the crippling drought, California Gov. Jerry Brown on March 20 unveiled a $1 billion relief plan aimed at funding water recycling, desalination, and flood prevention in the state. The plan follows more than $600 million in drought relief efforts funded in California in 2014, and was accompanied by another round of tightening water restrictions for municipalities across the state.

Despite the ominous water outlook, regional sources reported brisk fertilizer sales and movement in late March, with one commenting that the season was probably at least two weeks ahead of normal after an early start.

Pacific Northwest: The first days of spring brought heavy snowfall to the Cascades in southern Washington and Oregon, along with rain and windy conditions in the valleys. A wintry mix of precipitation was also reported in northern Idaho and western Montana as the week advanced. Much warmer weather was in store for the weekend, however.

The spring season broke early in some parts of the Pacific Northwest, and sources continued to report brisk fertilizer demand in parts of Washington, Oregon, and Idaho last week. Plan

Sulfur

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

Tampa: Speculation on the second-quarter price of molten sulfur delivered to Tampa began to heat up last week.

After rising to $147/lt in the first quarter – an $18/lt jump from fourth-quarter 2014 levels – sources were divided on the direction prices could head next. Some expected a rollover, while others predicted a slight decrease based on softening offshore markets.

Molten sulfur delivered to Tampa was $147/lt for the first quarter.

Local United Steelworkers Union (USW) negotiations with individual refineries continued last week, according to reports. The USW’s national body reached a tentative deal with lead oil company negotiator Shell Oil Co. on March 12, but the agreement was not immediately ratified by workers at eight of 15 striking facilities.

Union members at Tesoro’s three West Coast refineries were due to vote on the new contract last week, and striking employees of Shell’s Deer Park, Texas, refinery were expected to return to work on or around March 30 after having voted to approve their local contract.

U.S. refinery utilization rose last week, marking a third consecutive week of production increases. Capacity was 89.0 percent for the week ending March 20, according to the U.S. Energy Information Administration, a 0.9 percent increase from the previous week’s 88.1 percent, and also higher than last year’s 86.0 percent and the five-year average of 85.9 percent.

Average daily crude inputs were also up, growing to 15.530 million barrels/d. That level was 94,000 barrels/d above the previous week’s daily average of 15.436 million barrels/d.

U.S. Gulf: The Gulf offshore market continued to soften last week. Prices dipped to $145-$150/mt FOB based on updated transactions into Brazil, producers said. The previous price was quoted at $150-$155/mt FOB.

Vancouver: Despite Chinese port inventories that were said to total just 1 million mt of sulfur, market sources said negative sentiment in the international market saw delivered pricing to China drop for the week, down to a range of $160-$165/mt CFR.

Sources were divided on the effect China’s price rollback may have on the Vancouver market. Some predicted further declines in the next round of business, while others expected continued high netbacks based on sales to U.S. customers and the strength of the U.S. dollar relative to the Canadian dollar.

Most sources quoted the Vancouver market in a range of $155-$165/mt FOB.

Alberta refiner Syncrude 21 suffered an unexpected production cutback last week, and was reported to be loading at about 50 percent of capacity on March 26. The tightened production came as the refinery prepares for a 45-day turnaround, scheduled to begin in April.

Recent transactions netted back a range of $5-$85/mt FOB to sulfur producers in Alberta.

West Coast: West Coast prills were unchanged at $150-$160/mt FOB.

ADNOC: The March price of Abu Dhabi sulfur was $175/mt FOB, though a new price for April is expected shortly.

Aramco: Saudi Aramco priced its April offerings at $165/mt FOB.

Tasweeq: Sulfur produced in Qatar was $164/mt FOB for March. An April price is expected to be announced soon.

Potash

Brazil, California, Eastern Cornbelt, India, Market Watch, Pacific N.W., Potash Muriate, Southeast Asia, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: New potash business at NOLA was put at $350-$355/st FOB, with buyers seeking product in the $340s/st FOB.

Eastern Cornbelt: Potash remained at $395-$410/st FOB regional warehouses in the Eastern Cornbelt, depending on grade and location, and the low quoted in the Cincinnati market.

Western Cornbelt: Potash pricing remained flat in the $400-$410/st FOB range out of regional terminals in the Western Cornbelt. One source said there have not been many “serious inquiries” for new business because most have tons already positioned.

California: Potash was steady at $518-$535/st FOB warehouses in California, depending on grade and location, with the low for 60 percent and the upper end for 62 percent granular or soluble. Delivered potash remained at $525-$535/st in the state.

Crystalline potassium nitrate was unchanged at $950/st FOB for bulk and $1,020/st FOB for bags.

Sulfate of potash (SOP) was steady at $722-$735/st FOB in California.

Pacific Northwest: Potash was unchanged at $461-$475/st FOB and roughly $480-$495/st DEL in the Pacific Northwest, depending on grade and location. The potash market FOB Utah mines remained at $420/st FOB for 60 percent standard and $425/st FOB for 60 percent granular.

The sulfate of potash (SOP) market was quoted at $747-$757/st FOB in the region, with reports of improving spot market supplies due to dealers not taking all of their allocations.

The SOP Magnesia market had reportedly ticked up to $481-$501/st FOB in the Pacific Northwest, with continued reports of “very short” supplies.

Western Canada: The regional potash market was steady at $470-$480/mt FOB inland warehouses, with the Saskatchewan mine price quoted at $445-$450/mt FOB to Canadian customers.

Brazil: Granular MOP trades continued to move down on reports of $335-$350/mt CFR business, with the high end of the range representing smaller trades.

Southeast Asia: Standard MOP prices in Malaysia are still being reported as low as $315/mt CFR.

Uralkali is reported to have agreed to two cargoes +/-25,000 mt each for Vietnam at about $335/mt CFR.

Indonesia’s Sinar Mas reportedly closed a tender last week for 100,000 mt of MOP.

Europe: Following recent increases in MOP prices in the European market to offset the weak euro, SOP prices are now reported to have edged up to €450-€470/mt FCA for typical short-term contracts.

India: The MOP contract price increase reached between BPC and a consortium of Chinese buyers last week, which represented only a $10/mt increase on the year-ago contract, has reinforced talk that Indian first-half import contracts will be signed only slightly higher than the current price of $322/mt CFR with 180 days’ credit.

National Fertilizers Ltd. has issued a tender for the import of 50,000 mt of pink MOP, which closes on April 13. The tender calls for delivery in the first half of May in two shipments of 25,000 mt to several ports:

Port

Quantity (mt)

Phosphates

Brazil, California, Central Florida, Eastern Cornbelt, India, Market Watch, Middle East, Pacific N.W., Phosphate Rock, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida: The market was mostly quiet last week, with sellers waiting on farming conditions to improve. Fields remained generally unsuitable for any type of work in many areas, sources claimed, with wet fields continually refreezing overnight in northern locations.

DAP was called $445/st FOB for rail-loaded product shipped out of Florida, and $450/st FOB for material shipped by truck within Florida or to the lower Southeast. Producer DAP started at $440/st FOB, sources said.

As a result, the Central Florida DAP market was unchanged at $440-$450/st FOB. MAP was called $20/st higher than DAP, at $460-$470/st FOB.

U.S. Gulf: Fresh import announcements and a late start to the spring planting season in the Midwest and Northeast contributed to softening on the NOLA barge market last week.

Sources put most nearby DAP trades in the $415-$418/st FOB range, with physical offers predominantly quoted at $415-$425/st FOB. Rumors were heard of a pair of barge transactions in the $400-$402/st FOB range, though some ascribed the prices to forward buying. “I know those levels have been done for May and June,” one contact said. Nevertheless, at least one nearby barge buy was confirmed at $405/st FOB for the week.

MAP transactions were essentially absent from the market, but new offers were said to have trailed DAP lower. Some argued that domestic MAP had maintained a $10-$15/st premium over DAP tons, while most agreed imported Moroccan material had been offered at near-DAP levels.

Much of the market’s decline could be attributed to the start of spring, one contact said. The March 20 date passed with largely unworkable field conditions in much of the Midwest and Northeast regions, capping a weeks-long face-off between the market and NOLA-bound phosphate imports totaling at least 160,000 mt.

Market players had hoped the weather would clear ahead of the equinox, giving farmers time to begin applications and spurring enough demand to absorb the new material. But some sources believed the start of planting was still “weeks away” as of March 26.

Complicating matters was a pair of newly announced Moroccan vessels headed for NOLA totaling 100,000 mt of DAP and MAP, bringing the total amount of announced Moroccan imports to 260,000 mt for spring.

Some industry players believed protracted negotiations for the price of phos acid sold to India – settled last week at $805/mt for first-half 2015, an increase of $40/mt from the previous price – had contributed to the influx of Moroccan material at NOLA.

Without many bargaining chips to play in negotiations with India, some speculated Moroccan phosphate producer OCP may have dangled the threat of cheap exports to the U.S. as leverage. “They have to do something with all that (phos acid),” said one trader, “and the longer the talks dragged on, they would have to granulate it and use it for DAP and MAP.”

News of the settlement could help spur the barge market, another source noted. “Before now people were hesitant to buy (spot barges) because they could assume imports would keep bringing prices down, but now hopefully this gives people some confidence to jump into the market,” he said.

Not everyone agreed that the slow phos acid negotiations were responsible for the season’s hefty imports, however, with some citing a new Moroccan loading terminal and preexisting supply agreements for the volume.

The NOLA barge market softened to a range of $405-$418/st FOB, down from $421-$425/st FOB the week before. The last confirmed MAP transactions were quoted in a range of $430-$437/st FOB, though most believed the next round of business would be concluded in a range of $407-$425/st FOB.

Eastern Cornbelt: DAP re

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 107.50 106.95 95.69
CF Industries CF 294.25 290.03 251.60
CVR Partners UAN 13.20 13.71 21.21
Intrepid Potash IPI 11.90 10.94 14.67
Mosaic MOS 46.73 46.33 48.52
PotashCorp POT 32.82 32.04 35.19
Rentech Nitrogen RNF 15.26 15.92 17.77
Terra Nitrogen TNH 147.50 140.91 150.25
Distribution/Retail
Andersons Inc. ANDE 40.46 39.62 57.23
Deere & Co. DE 88.01 88.08 88.33
Scotts SMG 65.70 68.00 60.32

Ammonium Sulfate

Ammonium Sulfate, California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $315-$325/st FOB and $320-$330/st rail-DEL in the Eastern Cornbelt.

Ammonium thiosulfate was steady at $340-$350/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate remained in a broad range at $285-$325/st FOB in the Western Cornbelt, with the low reported in southern Missouri and the upper end in Iowa. Sources talked of tight supplies, but also the presence of import tons that have been “disruptive” to the market.

“Most noise around the sulfate market is regarding slow deliveries,” said one contact. “Tight supply and strong demand exist, but then there are imports looking for a home, and these tons seem to need to be discounted to encourage buyers. So there is a divergence in the market, causing the normal disagreement among buyers and sellers about what the market really is.”

Ammonium thiosulfate was steady at $310-$345/st FOB in the Western Cornbelt, depending on location.

California: The ammonium sulfate market remained in a broad range at $270-$325/st FOB in California, depending on grade, location, and supplier.

IRM’s postings were unchanged at WesternStandard at $270/st FOB Chico and Woodland, and WesternPremium and Tranzform at $280/st FOB Chico. Simplot was referenced at $285-$290/st FOB Lathrop and $320-$325/st FOB El Centro.

Ammonium thiosulfate was steady at $300/st FOB Stockton.

Pacific Northwest: Sources tagged the granular ammonium sulfate market at $300-$320/st FOB and $310-$330/st DEL in the Pacific Northwest. Those ranges reflected an increase from last report, with sources describing inventories as “tight but available.” One contact said regional supplies were recently bolstered when a 14,000-ton cargo that was originally destined for China was instead diverted to Vancouver.

IRM’s WesternStandard ammonium sulfate postings included $208/st FOB and $218/st DEL in the Pacific Northwest.

Ammonium thiosulfate was steady at $310-$320/st FOB in the Pacific Northwest, with the low FOB Kennewick and the upper end FOB Ritzville, Wash.

Western Canada: Granular ammonium sulfate remained at $525-$545/mt DEL in Western Canada.

Ammonium Nitrate

Ammonium Nitrate, California, Market Watch, Pacific N.W., U.S. Gulf, Western Cornbelt

U.S. Gulf: While ammonium nitrate barges continue to be quoted in the $295-$300/st FOB range, one player said last week that demand is down and there are plenty of barges on the water. He predicted that seller price ideas will have to come down to spur any new business.

Western Cornbelt: Ammonium nitrate remained at $350-$360/st FOB for limited tons in the Western Cornbelt.

California: AN-20 remained at $294/st DEL in California.

CAN-17 was quoted at $325-$352/st FOB in California, depending on location and supplier, with the lower numbers reported out of deep water terminals and the higher numbers at inland desert locations.

Pacific Northwest: CAN-17 remained at $300/st FOB Kennewick, Wash., and $325/st rail-DEL in the Pacific Northwest.

AN-20 was unchanged at $260/st FOB Kennewick and $270/st rail-DEL in the region.

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