Domestic wholesale fertilizer prices are expected to remain stable to slightly lower in the near term

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Fulfillment orders were reportedly booked at terminals north of the Mississippi River for as low as $ 213 / t FOB as of mid-May. However, the slow progression of spring activity during a rainy May in the eastern cornbelt left some infill discussions on the horizon, as there was still a lot of work to be done on the dress of the Maize Belt. above.

The main reason for the decline appears to be a very strong concern about the demand for urea in the spring. Pre-plant urea application rates per acre were reported to have been reduced resulting in lower sales in some areas compared to last year despite increased corn acres. This, combined with the success of the spring ammonia season, has resulted in major uncertainty about the future of post-plant urea demand. Recent weather conditions have also added to these fears, as heavy rains have soaked several areas of the Corn Belt and delayed sidedress applications.

The outlook for US urea is stable as orders could pick up with the emergence of the high-end clothing season.

International:

Most global urea prices edged down in May as producers cut prices in order to place the product in India for the May 7 tender. FOB prices in the Middle East and North Africa fell to around $ 195-220 / t from $ 220-230 / t at the end of April.

Before June, however, the market was rather positive, with India expected to announce another urea tender. Domestic sales in India have been strong and the southwest monsoon has arrived on time, so it is expected that at least 1 million metric tonnes (mmt) of urea will be needed. With China, the swing urea supplier largely absent from the export market with FOB prices held between $ 230 and $ 235 / t until May, many in the market expect there to be at least a little leeway to drive up prices in the short term.

Once the tender is announced, all eyes will be on China with the end of the main domestic campaign that may lead to export availability. If there is little Chinese participation in the tender, it should be further bullish for the urea market.

The outlook for international urea is stable ahead of the announcement of a tender in India, which could be a godsend for the international market with a sufficiently large quantity.

UAN

National:

UAN prices softened in May as concerns in the US nitrate market continued, wet weather in the Eastern Corn Belt delaying UAN applications and urea prices plummeting .

NOLA (New Orleans, Louisiana) UAN barges in the Gulf fell to $ 135- $ 139 / t FOB, down $ 10- $ 20 from April prices due to plentiful supply and d ‘limited purchases.

Prices in major CF river terminals markets at Mt. Vernon, Cincinnati and St. Louis fell from $ 190 / t FOB in April to $ 165-180 / t FOB for 32% in May.

There hasn’t been much talk about summer fill prices yet, although many expect continued price erosion.

The outlook for domestic UAN prices is stable to weak. Some near-term stabilization is expected with a pick-up in sidedress, but expectations remain low for end-of-season sales and summer fill prices which have yet to be announced.

PHOSPHATES

National:

In late April, DAP and MAP barge prices fell to $ 270- $ 278 / t FOB, and prices continued to decline until May before stabilizing at $ 265- $ 272 / t FOB DAP.

Prices at river terminals fell alongside barge prices, ending May at $ 295- $ 305 / t FOB DAP and $ 285- $ 300 / t MAP, from highs of $ 320 DAP and $ 325 MAP. end of April.

Imports from Morocco are expected to end for the summer, and Mosaic has started to focus more on the export market, effectively tightening domestic supply and creating a more optimistic outlook. Buyers took note and summer filler purchases took place.

The outlook for DAP and MAP prices is stable in the short term but looks more positive in the medium term with better control of supply and historical phosphate prices still very low.

International:

The start of the campaign in the United States and the return of South American buyers gave a boost to phosphate producers in the Baltic and North Africa. The demand for DAP in the phosphate markets in the east has also been healthy but with abundant supply thanks to the higher prices that can be achieved compared to the west.

In May, prices on MAP in Brazil fell slightly, from $ 305 to $ 310 the previous month to $ 300 to $ 310. At the same time, Indian DAP prices ended the month unchanged between $ 314 and $ 315 CFR, the same price as at the April close.

The outlook for the international phosphate market is stable to firm, determined by the demand for DAP in India at the start of the growing season and the supply of DAP in China which will determine prices in the region.

POTASH

NOLA potash barges traded lower in May to $ 195 to $ 205 t FOB, down a few dollars from April. Interest in barges remained very low throughout May. However, at the terminal level, some movement was still observed, particularly in several states such as Ohio, which continued to lag behind in the progress of plantings.

The Chinese potash import supply contract was settled at the end of April at $ 220 / mt CFR with the consortium of three buyers for delivery until the end of 2020. This is a decrease of $ 70 from at a price of 290 $ / mt CFR concluded in 2018 and which weighed on the market, because the settlement of the major contract was delayed by the appearance of Covid-19 in February.

Nutrien’s opinion in the market at the end of the month was that potash application was still in progress in some pockets of the market and that discussions about summer potash filling are premature. Since the recent signing of long-term potash contracts in China and India, and the strengthening of granulated potash prices in Brazil, Nutrien does not expect prices lower than current in the third quarter.

In the wake of a strengthening of the international potash market following the resolution of supply contracts and the stability of the US domestic market, our short-term outlook for potash is stable.

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Editor’s Note: This information was provided courtesy of Fertecon, Agribusiness Intelligence, IHS Markit.


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