- DTN Headline News
DTN Fertilizer Outlook
Monday, July 28, 2014 8:54AM CDT

By Ken Johnson
DTN Fertilizer Columnist

World ammonia prices traded mostly flat through July. Yuzhnyy ammonia sales crossed at $450 to $460 mton fob early and sold at $445 to $450 late. Late in the month the August contract price for ammonia imported into Tampa rolled over at $520 mton cfr. The nominal fob netback is $450 fob Black Sea, broadly in line with current indications by suppliers in the region. Production problems (political and short gas supplies) continue to plague North African ammonia producers and seasonally slow demand in northwest Europe and the U.S. are keeping FSU prices soft. Indian buyers paid slightly more for Middle East product in mid-July than they did early in the month ($537 vs $530 cfr) but the price for contract tons from Iran fell $20 from $540 to $520. For the short term, we look for world ammonia prices to run flat with an undertone of softness. Domestic ammonia prices at inland terminals fell slightly in July, trading at $565 to $580 early and selling at $560 to $570 late. Stocks are low in the system and buying for fall should start to pick up in August. U.S. domestic production is higher than last year, which could help reduce upward pressure on domestic prices. We look for domestic ammonia prices to run firm but flat in the short term.


World urea prices traded lower through July. Yuzhnyy export prilled tons crossed at $310 early and fell to $295 to $305 late. Prices in the FSU were under some pressure, but supply was restricted at month's end by the beginning of turnarounds at several export plants. Prilled urea prices for sales in China in the mid-July traded in the $255 to $260 range. In late July, an Indian tender for urea closed and around 1.2 million metric tons were purchased at around $274 mton cfr. There were close to 5 mm tons offered. At month's end, Chinese prilled started to edge above the $260 fob level and the sales volume into the Indian tender should clear most inventory at Chinese ports. August supply from the Middle East is also tight. A granular cargo sold at $335 fob for end August/early September shipment and producers are now looking for $350 fob for remaining tons. The firming export prices are reflected in offers into Brazil that are now running as high as $360 cfr, although buyers there secured tons in the mid-$340s cfr late in the month and are resisting the higher prices. We expect world urea prices to run flat with an undertone of softness in the short term. Cash prices for NOLA granular barges moved lower through the month, running down from $390 to $400 early to $370 late. Interior barge and terminal prices continued high for those needing product immediately, but spring demand is nearly over. The system is quite empty, however, and there could be some strong demand appear soon to get product into position for fall Wheat Belt runs, which could keep prices from falling as much as one might expect give the massive import supply (1.51 mm tons) expected to arrive in the next 30-60 days. Trading of urea and all other fertilizers at the recently closed Southwestern Fertilizer Conference (SWFC) was almost non-existent. The main topics of conversation centered around logistical issues (slow rail service and extremely tight barge supply). Domestic barge freights have almost doubled from $17 to $18 to $30 for the NOLA (New Orleans, La.) to Twin Cities run. In addition to the 1.51 million metric tons of urea and 714,000 metric tons DAP/MAP arriving in the next 30-60 days, there is an abnormal amount of road salt imports (1.2 mm tons) arriving as well. At the conference many large wholesalers were reluctant to commit due to price risk on urea. Prices for domestic urea NOLA barge tons could continue to get pressured lower in the short term due to the arrival of lower-priced Chinese product


UAN prices at NOLA ran flat through July, trading at $245 per short ton fob early and late. UAN prices softened slightly at inland terminals over generally light activity. The return of operations at the CF/Woodward, Okla., plant late in the month was good news for supply. Natural gas prices, however, are now running well below $4.00 mmcf, which further strengthens producer margins, allowing room to cut if necessary. Also interior urea prices look to take a dive soon which will not support UAN producer efforts to move prices higher. We look for UAN prices to run flat with an undertone of softness in the short term.


DAP export prices firmed through July as Tampa export tons crossed at $490 early and rose to $510 to $511 late. The tight supply position in the phosphate market has again permitted those producers active late in the month to make further price gains in the face of healthy demand relative to supply in several markets. Heavy monsoon showers in India toward the end of July allowed Ma'aden, Saudi Arabia, to achieved a higher price reflecting the low $450s fob for 35,000 mt of DAP for July shipment to India, up $5 above returns achieved on sales for June loading. With little product unsold for shipment over the next 30 days, most DAP export producers are under no pressure to drop prices to chase business. Jordanian and Mexican suppliers have healthy order books stretching into September and FSU MAP producers are comfortable for August, largely on healthy local and regional demand. Although suppliers in Morocco and the U.S. still have quantities available for August load, they are limited. There are a few signs of buyer resistance appearing. We look for world DAP/MAP prices to run steady to slightly higher in the short term. Domestic DAP prices at NOLA dropped slightly through July, falling slightly from $435 to $440 early to $430 to $440 late. Domestic demand at NOLA has dried up and potential buyers are looking at the substantial import supplies arriving July-Sept. Some have pointed out, however, that many of those import tons are likely going to large buyers' own distribution systems and unsold tons could be limited. Also slow logistics (slow rail, barge service) look to continue and some large Corn Belt wholesalers needing product for fill could be forced to buy in earlier than they might ordinarily like. Another issue which has arisen however is the substantial drop in corn prices, which many fear could reduce farmer demand. We look for short-term NOLA DAP barge prices to come under light downward pressure from import supplies


Continuing tight supplies of potash allowed NOLA barge prices to increase by $5 from early in the month to late ($360 to $365). Supplies of potash remain thin both at NOLA and at interior terminals. The slow delivery of rail cars ex Canada looks to continue for some time (into 4Q and perhaps even into 1Q, 2015). The lack of real prices competition in the market continues as well. In addition, demand remains light as wholesaler/dealers try to assess what the impact much lower corn prices might be on farmer demand. We look for domestic potash prices to run steady to higher in the short term.


blog iconDTN Blogs & Forums
DTN Market Matters Blog
Katie Micik
Markets Editor
Friday, July 25, 2014 7:20PM CDT
Tuesday, July 22, 2014 11:45AM CDT
Friday, July 18, 2014 5:54PM CDT
Technically Speaking
Darin Newsom
DTN Senior Analyst
Thursday, July 31, 2014 7:27PM CDT
Wednesday, July 30, 2014 1:36PM CDT
Tuesday, July 29, 2014 1:50PM CDT
Fundamentally Speaking
Joel Karlin
DTN Contributing Analyst
Wednesday, July 30, 2014 2:50PM CDT
Thursday, July 24, 2014 2:34PM CDT
Wednesday, July 23, 2014 3:20PM CDT
DTN Ag Policy Blog
Chris Clayton
DTN Ag Policy Editor
Thursday, July 31, 2014 5:18PM CDT
Tuesday, July 29, 2014 9:14PM CDT
Tuesday, July 29, 2014 11:34AM CDT
Minding Ag's Business
Marcia Taylor
DTN Executive Editor
Thursday, July 31, 2014 3:56PM CDT
Thursday, July 24, 2014 4:46PM CDT
Wednesday, July 23, 2014 3:59PM CDT
DTN Ag Weather Forum
Bryce Anderson
DTN Ag Meteorologist and DTN Analyst
Thursday, July 31, 2014 3:43PM CDT
Tuesday, July 29, 2014 2:41PM CDT
Monday, July 28, 2014 2:57PM CDT
Thursday, July 31, 2014 8:39PM CDT
Wednesday, July 30, 2014 6:53PM CDT
Tuesday, July 29, 2014 6:03PM CDT
DTN Production Blog
Pam Smith
Crops Technology Editor
Thursday, July 17, 2014 11:54AM CDT
Thursday, July 10, 2014 8:46PM CDT
Tuesday, July 1, 2014 7:24PM CDT
Harrington's Sort & Cull
John Harrington
DTN Livestock Analyst
Friday, July 25, 2014 9:40PM CDT
Friday, July 18, 2014 10:22PM CDT
Friday, July 11, 2014 6:04PM CDT
South America Calling
Alastair Stewart
South America Correspondent
Monday, July 14, 2014 4:17PM CDT
Wednesday, July 2, 2014 4:17PM CDT
Tuesday, July 1, 2014 4:15PM CDT
An Urban’s Rural View
Urban Lehner
Editor Emeritus
Tuesday, July 29, 2014 11:05AM CDT
Friday, July 18, 2014 11:21AM CDT
Monday, July 14, 2014 4:23PM CDT
Machinery Chatter
Jim Patrico
Progressive Farmer Senior Editor
Wednesday, July 23, 2014 5:47PM CDT
Wednesday, July 16, 2014 7:19PM CDT
Tuesday, July 8, 2014 12:05PM CDT
Canadian Markets
Cliff Jamieson
Canadian Grains Analyst
Thursday, July 31, 2014 9:58PM CDT
Wednesday, July 30, 2014 9:52PM CDT
Tuesday, July 29, 2014 9:51PM CDT
Editor’s Notebook
Greg D. Horstmeier
DTN Editor-in-Chief
Friday, July 25, 2014 6:07PM CDT
Friday, July 18, 2014 6:08PM CDT
Saturday, July 12, 2014 3:22AM CDT
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN