U.S. Gulf: Prompt granular barges that were ready to move continued to garner a premium last week, with most sources putting trades as high as $336/st FOB. Well-positioned upriver barges were reported to be netting back to NOLA at $354-$355/st FOB.
In the meantime, barges that were to load two weeks out were called $300-$305/st FOB. July was called $300-$310/st FOB, and August/September $290/st FOB.
One source speculated that if importers and the Chinese can show some restraint, urea prices this year may not drop much more than the $290/st FOB mark. However, other sources were more bearish, citing a heavy import line up in the near term that would continue to put pressure on granular barges. A little farther out, the bears saw more Chinese granular on the horizon.
While prills were reportedly hard to find, sources still gave them a lower price tag at $325/st FOB.
Eastern Cornbelt: Granular urea pricing had reportedly slipped to $410-$425/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio.
Western Cornbelt: Urea pricing covered a wide range in the Western Cornbelt. Missouri sources pegged the low end at $380-$390/st FOB last week, while Iowa sources reported the top of the regional range at the $425/st FOB level on a spot basis.
Northern Plains: Granular urea pricing had reportedly slipped to $390-$400/st FOB the Twin Cities, down roughly $30/st from mid-May pricing levels. Urea pricing in North Dakota was down as well, with sources quoting the market at $470-$490/st DEL or for spot tons on an FOB basis.
Northeast: Granular urea in the Northeast was reported at $430-$440/st FOB, down another $5-$10/st from mid-May pricing levels. The Savannah, Ga., urea market was quoted at the $430/st FOB mark.
Wet weather in early June slowed the completion of spring planting in the Northeast. Local reports said thunderstorms hit parts of Vermont, western Massachusetts, and Connecticut on June 3, with more rainfall reported on June 5.
USDA reported that 80 percent of Pennsylvania’s corn crop was planted by June 1, slightly behind the five-year average of 86 percent, but a full 17 percent ahead of the previous week. USDA said 95 percent of the corn crop was in the ground nationally by June 1, with emergence rated at 80 percent complete.
Eastern Canada: Granular urea had reportedly slipped to $500-$530/mt FOB regional terminals in Eastern Canada, down roughly $40-$60/mt from pricing levels in late April, depending on location.
China: Prices for granular material moved up dramatically as traders took positions and covered shorts. Sources say about 500,000 mt was purchased for June and early July.
Industry watchers peg the current price at $270-$275/mt FOB, representing a $20/mt increase in just a couple of weeks.
At least one granular producer is said to be sold out for June and with a healthy order book for July. Helping keep granular tight are reports that there is still some strong domestic demand for the product.
Prices are expected to dip again beginning July 1, when the 15 percent export duty is dropped. Sources say, however, that the strength in the granular market could keep the Chinese granular price from falling much beyond the price without the duty.
Buyers of Chinese granular include the U.S., Latin America, and Turkey. One trader noted that the ability to make a large sale to Turkey showed just how out of balance the urea market currently is. He noted that Yuzhnyy or Arab material would normally have been considered for Turkey, but the low price of Chinese granular made the sale more than attractive.
While Chinese granular remains the flavor of the month, prills ar