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Fertilizer Market Report – March 6, 2024
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Surging Urea Prices: Insights from NOLA and Brazil; Projections for Grain Market Stability, and Insights into North American Urea and MAP Prices
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In this week’s fertilizer report: Highlights from last week’s Argus Fertilizer Report; grain markets could stabilize next month; North American urea and MAP prices; and industry tidbits.
News of the Week: Fertilizer Market Report
Highlights from Last Week’s Argus Fertilizer Report
Urea prices were overall higher last week, led by a rise in levels at NOLA and Brazil.
In the US, March barges traded as high as US$390/st FOB NOLA mid-week, up from the previous week’s range of US$330-$370/st FOB. Thursday saw first-half March trade at US$397/st FOB, with first-half April sales up to US$382/st FOB. But on Friday, a first-half April barge traded at US$379/st FOB NOLA, while another barge for first-half April delivery traded later in the day at US$378/st FOB NOLA.
The jump in US levels has supported those in Brazil, where small lots traded at US$395/st CFR. Offers have risen to US$400/st CFR.
In the phosphates market, China’s export policy has become (somewhat) clearer. DAP exports could start realistically from April with quotas (more or less unchanged from last year) applying over three distinct periods up to April 2025.
Grain Markets Could Stabilize Next Month
Last week we wrote about Hedge Fund’s net short position in the ag complex. We noted that any event could push the market into a short covering position resulting in ag commodity prices rising.
This article in The Western Producer quoting an unnamed ag trader reiterates that thought. We are in interesting times now in agriculture. Fertilizer prices are rising as expected, and grain prices are falling, but are your selling prices near the bottom?
“The month of March should be a catalyst that should at least start to stabilize things, I would think,” said a canola trader who preferred to remain anonymous.
The market’s focus is shifting from South America to North America, where there are troubling signs heading into spring seeding.
“Eventually the shorts will quietly start to cover, and we’ve seen little bouts of covering even in the last couple of weeks.”
The change in market direction could also happen suddenly if a major weather event occurs in one of the main grain and oilseed producing countries or if a source of big money that does not normally participate in the grain markets decides to throw some funds at corn, soybean, wheat or canola to see if they can scare the shorts.
North America Urea Last Week
According to Green Markets, urea prices in Western Canada increased to C$720/mt FOB from C$690/mt and C$750-$765/mt DEL from C$720-$765/mt DEL last week.
NOLA urea prices increased to a range of US$363-$398/st from US$330-$366/st last week. On average that’s up over 9% WoW.
It appears that the market did not anticipate such an early start to spring seeding in the US and therefore the urea supply tightened, pushing prices up.
North America Phosphate Last Week
According to Green Markets, the latest delivered MAP prices were flat WoW in Western Canada in a range of C$1,120-$1,130/mt for the fourth week in a row. MAP prices have risen 38% since early July 2023 in Western Canada.
MAP NOLA prices settled at $625/st. up on the low end from the previous week’s range of US$605-$625/st.
Again, supply is tight in North America in a US spring seeding that started early this year.
Industry Tidbits
- Whitepaper: Unleashing the Power of AI in Grain Commodity Trading | amazonaws.com
- Crop insurance costs explode | The Western Producer
- Opinion: Congress: Allow America’s Flagship International Food Aid Program to Feed More People | Agri-Pulse Communications, Inc.
- Need for rain, snow pervades much of Canada | The Western Producer
- What impact does a mild winter have on local agriculture? | Guelph News
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