Urea prices remained at their level during the first half of February but started to weaken at the end of the month.
European purchases slowed with high inventory levels reported. Pakistan’s unexpected export volumes are hitting the market, and Brazil’s huge import figure in January also led to a build-up that helped buyers drive prices down in February.
Sales of granular urea in Egypt hit $ 285 mt fob at the end of January, but are now trading at $ 260 mt. The Middle East fob also traded lower between $ 213 and 250 million tonnes, compared to $ 265 to 280 million tonnes last month.
The US NOLA (New Orleans, Louisiana) price began to decline in the second half of February as traders sought to clear prices rather than pay for storage. The range of imports has widened and there are already concerns that a heavy application of ammonia could adversely affect the urea season.
A bullish factor remains the possibility that China will run out of urea for the spring season and exports could be reduced. This remains more speculation at the moment, but the drop in Chinese exports has already been taken into account. Chinese exports were trading between $ 248 and $ 252 mt fob at the end of February, down from $ 265 to $ 275 last month.
The near-term outlook for urea prices is stable to bearish due to relatively high inventory levels and weak demand.
Prices at NOLA appeared lower in late February, with barges for February / March shipments selling for between $ 219 and $ 229 / tonne, compared to $ 240 to $ 250 / tonne at the end of January. Much of this appears to be traders looking to liquidate positions, rather than paying storage fees.
In terms of application, there continues to be some top-dress descending wheat on the southern plains as well as the central and eastern cornbelt. Sales volumes in the Midwest are low as demand for urea for wheat has been low. In addition, many spring buyers are still on the sidelines. They fear that demand for urea will be unusually low this year due to the poor economy of corn, and that a successful ammonia campaign early on could further reduce urea demand.
In Texas, the row crop application appears to be about 80-90% complete. Sales have been flat along the Gulf Coast where prices are stable at just below $ 275 to $ 285 / tonne. The short-term tightening that drove prices higher earlier in the season has now abated and prices may have pulled back slightly. In addition, a new player entered the market this month: American Plant Food unloaded its first shipment of urea at its new plant in Houston in mid-February.
Domestic prices fell as warehouse values ââsuccumbed to pressure from the deflated NOLA market. Wholesalers are still waiting for the emergence of significant demand. Demand for premium wheat has been very weak in all regions and has not pulled enough tonnes to force wholesalers / retailers to reload. Catoosa / Inola’s fob prices are down about $ 15 to $ 20 from last month to $ 260 to $ 265 / tonne. The latest sales reported in the Corn Belt were around $ 265 to $ 275 / tonne.
Usually neither sellers nor buyers are in a state of emergency. Peak demand has not yet started and stocks still need to be moved. Also, wholesalers are always optimistic and don’t feel much need to sell tons at this price point.
Lac PÃ©pin had been open since March 1st. This could help support barge prices in the short term; However, real demand is needed to bring prices down, and so far it seems like it takes two to three weeks for that to appear. If the NOLA market stays in the $ 220 or less, we might see more warehouses driving prices down. We are looking for stable to slightly milder prices in the short term.
At NOLA, a further decline in prices was observed with UAN barges at $ 185 to $ 192 / tonne in late February, down from $ 190 to $ 195 / tonne in January. And on the East Coast, bids have come down to $ 200 mtonne cfr with bids ranging between $ 190 cfr and mid-year. This comes after a sell was reported at $ 205 mt cfr earlier in the month.
Domestic UAN prices were mostly unchanged from last month, with $ 205-235 / tonne covering filling and prepayment for most fob values ââfrom Midwestern warehouses. Activity is weak and new sales have been slow. Some central Corn Belt dealers place a few small orders to extend their pre-plant coverage, but usually still wait to buy for the sidedress.
OCI’s Wever, Iowa, has not started its new ammonia plant. The company has informed people that production is imminent. Even if this turns out to be true, market participants do not expect any UAN production this spring.
The near-term outlook for domestic UAN prices is stable. Limited availability from domestic producers and delayed demand for toppings are expected to continue to support these UAN prices over the next month.
Good demand and limited supply allowed January’s price rally to continue through February, with no sign of an imminent end.
Demand seems firm in Brazil. The price levels of MAP and DAP are between $ 395 and $ 398 mt cfr, while the Russian MAP has been sold for up to $ 405 mt cfr, which is a substantial increase from sales made a year ago. month at 350 $ mt cfr.
With North American demand also being healthy, barge prices fell from $ 330 to $ 340 / ton fob NOLA for the DAP and from $ 360 to $ 365 / ton for the MAP. This is equivalent to 358 to 369 million tonnes cfr for the DAP and to 391 to 396 $ cfr for the MAP, the latter being comparable to the Brazilian values. Mosaic also experienced good export demand from Latin America. Towards the end of the month, Mosaic sold 12,000 t of DAP / MAP in Latin America at $ 375 fob, up $ 40 from the highest fob values ââreached in January.
On the supply side, the Chinese refuse to give up the asking price of 370 million tonnes for tonnes of exports. Chinese export data reflects the general reduction in availability with lower DAP load volumes in January than last year. Prices listed are $ 368- $ 370 mt fob China, up from $ 350 to $ 360 mt at the end of January.
In Morocco, Jorf Lasfar faced loading issues for much of the month, which helped keep the international market tight. Export prices went from $ 333 to $ 350 mt at the end of January to $ 385 to $ 388 mt recently.
Continued interest in Europe and Africa and emerging signs in Latin America translate into an overall positive outlook for demand, as producers manage to keep the market tight thanks to loading issues in Morocco, a lower exploitation rates by Mosaic and low export availability from China. We are looking for stable to firmer international prices through March.
In February, DAP / MAP barges strengthened thanks to good demand for early applications and a limited supply. The price of fast DAP barges is $ 337 to $ 338 / tonne NOLA, up from $ 312 to $ 315 / tonne in January. While MAP barges saw their prices rise further, trading between $ 355 and $ 365 / ton fob NOLA in late February, up $ 30 from January sales. Barges have been extremely tight due to delays in shipments from Morocco, but several ships are expected to arrive shortly, putting pressure on futures prices.
Adding to the optimism surrounding the tight supply of DAP / MAP, Mosaic announced in its latest financial publication a sharp reduction in the operating rates of its phosphoric acid units, with targets of around 70% of capacity. nominal instead of the more typical 80% seen recently.
Midwestern buyers who still have time before the spring application pulled out of the purchase after warehouse prices rose about $ 15 to $ 20 for DAP during the month. Wholesalers in the northern plains and south central markets reported little or no interest in buying DAP or MAP.
Meanwhile, new sales continue in other markets where the app has already started and buyers are forced to pay. Wholesalers reported good demand due to the increased area planted to soybeans. Sales of fob Tulsa trucks are between $ 365 and $ 370 / tonne for DAP. Meanwhile, MAP is extremely tight on the Arkansas River and the plains areas in general, and many vendors are completely exhausted in the surrounding area. A producer has reportedly withdrawn its warehouse MAP offers in Nebraska and South Dakota. MAP prices in Sioux City, Omaha and Saint Joseph are up about $ 20 from last week, now in the $ 415- $ 425 / tonne range. MAP traded at a premium of $ 40 in Tulsa and sellers with available tonnes would have asked for up to $ 420 / tonne.
Tight supply and seasonal demand are expected to support DAP / MAP prices through March.
Potash barges firmed to $ 220 to $ 228 per tonne at the end of February, with imported tonnes reflected at the low end and domestic at the top. In January, the highest barge trade was priced at $ 215 fob NOLA. Domestic prices continue to see increases, most up about $ 10 from last month in the $ 245 to $ 265 / tonne range depending on the warehouse. Prices in the Central Plains are the firmest, around $ 260 to $ 270 per tonne, where farmers continue to have a good streak of early applications. Wholesalers reported moderate movement out of Catoosa / Inola. Application is made in moderate amounts in the central and southern plains. Farmers in the Eastern Corn Belt are also beginning to apply potash for most grazing jobs.
We expect domestic potash to be stable to firmer as distributors gradually sell export tonnes at lower prices.
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(AG / BAS)
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