Fertilizer Market Report – January 24, 2024

Grain Movement Soars, Producers Urged to Secure Urea Supplies Early, and the Revival of Prairie Co-ops

Fertilizer Market Report 2024/01/24 | In this week’s fertilizer report: Producers urged to buy urea sooner than later, Grain movement humming along, Wheat Pool 2.0: The time might be right for a revival of Prairie co-ops, Last week’s North American Urea and MAP prices, and Industry Tidbits.

News of the Week

Trader says recent price spike is likely short-term, but farmers should make their purchases no later than mid-March

The urea product manager from ADM said that Canadian producers should be buying urea in the next six weeks or so in a speech at Manitoba Ag Days on January 17. His view is that farmers should have their nitrogen bought by mid-March. “Q2 (quarter two) typically … has higher prices than Q1. So, we will get some seasonal uplift to urea prices, probably beginning in March and into April,” reported The Western Producer.

Grain movement ‘humming along’ this winter

According to Mark Hemmes, President of Quorum Corp., total grain exports are where they should be at this time of year due to railways working smoothly, ships getting loaded on the West Coast and the Port of Thunder Bay getting an extra week of shipping due to mild temperatures.

Wheat Pool 2.0: The time might be ripe for a revival of Prairie co-ops

This is a great article explaining how the consolidation happening within Western Canadian grain handling companies is hearkening back to the days of the Saskatchewan Wheat Pool. According to the authors, Marc-Andre Pigeon and Natalie Kallio, the timing of the announcement (of the acquisition of Viterra by Bunge) is ironic for two reasons. First, it coincides with what would have been the Wheat Pool’s 100th anniversary. Second, it’s occurring during a period when Saskatchewan and Prairie farmers are facing power imbalances in the market not dissimilar to those that gave rise to co-operative wheat pools in Saskatchewan and Alberta in 1923, and Manitoba in 1924.

North America Urea Last Week

According to Green Markets, urea prices were slightly higher to a range of C$650-$655/mt FOB from the prior week’s range of C$635-$650/mt FOB and C$660-$685/mt DEL from the previous week’s C$660-$670/mt delivered in Western Canada.

Last week we wrote that these prices in Western Canada are just about the best you will find in our view.

On August 2, 2023, we wrote: Finally time to change our tune on fertilizers in Western Canada. If you have storage, we recommend you start inching into the urea and phosphate market. The theme being tight supplies globally are supporting prices as explained throughout this newsletter.

In early August 2023, Urea Western Canada prices were C$720/mt, rose to C$755/mt in September, dropped to C$673/mt in December, C$655/mt in early January for a few weeks and now back up to C$673/mt.

Monday we were are seeing FOB offers of C$705/mt for February and March and C$715/mt for March near Regina. Tuesday we saw a urea offer of C$722/mt for January delivery out of a location southwest of Regina.

NOLA urea showed higher prices again week-over-week rising to a range of US$325-$335/st, up from the previous week’s US$304-$320/st. In the past three weeks, NOLA urea prices have firmed 9.7% to due to stronger global markets. For example, urea Middle East jumped US$44/mt or 14% last week to US$355/mt.

North America Phosphate Last Week

According to Green Markets, the latest delivered MAP prices were higher week-over-week on the low end to a range of C$1,080-$1,085/mt, up from the previous week’s C$1,065-$1,085/mt.

We are still worried about import supply issues into Western Canada. Again, we recommend you fill your bins rather than wait for spot prices in the spring delivery season.

On Tuesday, we saw a MAP offer of C$1104 for January delivery out of a location southwest of Regina.

MAP NOLA prices were flat week-over-week in a range of US$625-$630/mt.

Industry Tidbits