Here is a breakdown of wholesale prices and trends of the various fertilizers:
In May, the downtrend in ammonia prices came to an end, and international benchmarks inched upward in the second half of the month.
Tightness of supply in the Far East continues to be the main driver in the market. Far East cost and freight (CFR) prices ended May at $320 to $350 per metric ton (mt) CFR, up from $300 to $330 late April.
Seeing less competition as the Far East soaks up tons from Algeria and Egypt, Yuzhnyy, Ukraine, has been able to increase prices with sales at $235 and $240 FOB (free on board — the buyer pays for transportation of the goods), compared to $215 to $220 last month.
Stateside, some production has started to move to BASF and to domestic customers for Yara through the pipeline from the new Freeport plant in Texas. Despite this new production coming online and interior prices weakening following a disappointing spring ammonia season, the June Tampa contract between Yara and Mosaic settled at a $15 increase from May to $270 mt CFR.
The supply-and-demand balance is fragile, and recent gains in prices could quickly be toppled by the start-up of new production in Indonesia and Freeport, Texas. However, for now, the price outlook in the short term is stable to firm.
Interior ammonia prices softened through May as sellers competed over remaining spring demand. Anecdotal reports suggest anhydrous application volumes for most areas in the Midwest were below average this spring. This is mostly due to the shortened preplant window and the heavy usage seen last fall.
Corn Belt prices ended May in the $360 to $400 per ton (t) FOB range compared to $405 to $425 last month. Sidedress applications are starting to wrap up with end-of-season shipments moving out this past week.
Western Minnesota and North Dakota continue to run sidedress. Prices are holding around $385 to $390/t FOB in this region. Supply is tight with demand reportedly stronger than expected and within a tight timeframe. Suppliers are finding it difficult to move long-haul tons to service this demand due to limited trucking availability. The governors of Minnesota and North Dakota have each signed temporary waivers to ease restrictions on the driving hours for truck drivers.
Ex-plant pricing in Oklahoma is down to $340 to $365/t. Sellers are struggling to move length to other markets and are competing over the limited spot demand surfacing within the region.
The short-term outlook for ammonia prices continues to be soft as suppliers battle over remaining spring demand. Lower prices are also expected for summer fill, but not as low as last year.
Granular benchmarks were under pressure to start May. However, prices started to turn by the end of the month, as traders took positions ahead of forward buying from Europe and another Indian tender.
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In the A.G., spot sales were last concluded at $245 to $250 FOB, up from $230 to $245 at the end of April. Many in the market now do not expect an Indian urea tender until the IFA conference on June 17-20; however, considering an early monsoon, it still seems reasonable for the government to announce a date before then for full July shipment.
Egyptian sales were concluded at $242 to $253 FOB at the end of May, up from $236 to $238 in April. Traders are covering some small-volume shorts but also going long ahead of European buying.
The European market for next season, however, continues to be a non-starter with buyers sceptical that the summer low is already behind us. Although there have been a number of sales for July, the metric tons have mostly moved into traders’ hands, and therefore will still have to be accepted by buyers on the ground.
The short-term outlook for urea prices is stable with seasonally slow demand being balanced out by reduced Chinese exports.
New Orleans, Louisiana, (NOLA) barge prices moved softer for most of May, trading down as low as $199/t FOB, due to a late start to the application season and growing import supply. However, by the end of the month, applications were kicking off for a variety of crops and supply quickly tightened up. During the last week of the month, barge prices traded up as high as $225 to $245.
Meanwhile, river terminal prices held relatively steady around $260 to $270/t FOB. The rally at NOLA has brought terminal values back in line with more normal historical spreads.
Logistics were a focal point in May with the shortage of trucks/truck drivers making it difficult to service demand. The shortened preplant window, rail delays, high water levels on the river system, and the ELD (electronic logging device) mandate are all exacerbating the issue. This is a common problem for the domestic fertilizer industry, but many feel this year has been exceptionally bad.
Domestic nitrogen producer CF has been looking toward the export market as the Latin American season heats up. Around 115,000 mt are believed to have sold for June shipment so far.
The short-term outlook is stable to soft as spring demand wanes.
UAN prices are slightly softer from last month due to weaker nitrogen prices. Activity at the warehouse and farm level is picking up now that the crop is in the ground. Shipments are moving out in force and some supply tightness was reported in areas of the central Corn Belt. CF terminals, however, are still in good supply. With urea looking weak and suppliers anxious to move out tons there will not likely be a price uplift.
River terminal prices are generally in the $200 to $215/t range, down about $5 to $10 from the end of April.
Barge prices at NOLA are $165 to $172/t FOB, compared to $180 last month. Barge demand has been slow with any supply at NOLA now at risk of making it in time for the spring season.
The short-term outlook for UAN prices is mostly stable with some seasonal softness likely later in the month.
Global phosphate prices largely marked time in May with steady demand from most key markets as well as careful management by producers not to tip the market into oversupply.
New sales in India have slowed down with the softening of the Indian rupee, which is down about 4% compared to the dollar from last month. DAP prices held steady at $427 to $432/mt CFR.
Seeing a strong spring season domestically and steady demand from Brazil, Mosaic was able to lift export prices to $406 to $411/mt FOB U.S. Gulf from $400 to $410 at the end of April.
The price outlook is steady in the short term but more uncertain in the medium term as new production is scheduled to come online in Morocco in the coming months. This may tip the supply-and-demand balance if demand in key countries does not ramp up to match.
Barge prices softened slightly toward the end of May as prompt demand for the spring season faded. DAP barges trades at $378 to $383/t FOB NOLA during the last week of the month, against $377 to $390 at the end of April. MAP barges showed decreases of about $4 to $375 to $380.
Mosaic announced summer-fill values at $385/t FOB for DAP and MAP. This announcement came about a month earlier than usual, and did not show much of a price reset going into summer. Usually, producers will incentivize buyers to take product in when demand is slow by discounting prices. Buyer response to this program has so far been limited with many in the industry still focused on meeting nitrogen requirements for post-plant applications.
Driven by tight supply, river terminal DAP prices increased by $5 to $10 from last month to around $420 to $425/t FOB. MAP prices moved up on the back of DAP but remain at a $5 to $10 discount due to relatively better supply.
The outlook for DAP prices is stable in the short term.
Producers seem comfortable with inventories following a strong spring season. Imports this summer will also likely be limited with U.S. phosphate prices at a slight discount to the world.
Domestic potash prices firmed during May due to better-than-expected spring demand and tightening supply. Barges traded at $240 to $245/t FOB NOLA during the last week of the month, up slightly from the $237 to $240 at the end of April.
Terminal prices are generally up about $5 from last month to $270 to $275/t with some suppliers pushing for $280/t FOB. Carryover into the summer is expected to be minimal.
Producers have not made summer fill offers yet, as they will likely wait until there is more interest apparent from buyers in later June or early July. Market expectations are for fill values to be announced at current prices followed by a scheduled price increase at a later date.
The outlook for potash prices is stable in the short term. Inventory channels are likely to be depleted following a solid spring application, which will lead to strong fill demand this summer. Granular supply from producer K+S in Canada is now not expected until later this year (at the earliest), and with U.S. potash prices at a slight discount compared to the world, overseas imports will likely be limited this summer.
Editor’s Note: This information was supplied courtesy of Fertecon, Informa Agribusiness Intelligence.