Fertilizer Market Report – February 28, 2024

Nutrien and Mosaic’s Projections, Hedge Fund Moves, Urea and MAP Price Trends

Fertilizer Market Report 2024/02/28 | In this week’s fertilizer report: Excerpts from Nutrien’s and Mosaic’s outlook, hedge fund activity in ag complex, North American urea and MAP prices, and industry tidbits.

News of the Week: Fertilizer Market Report

Excerpts from the Outlook in Nutrien’s Fourth Quarter Earnings Report

We expect nitrogen supply constraints to persist in 2024, including limited Russian ammonia exports, reduced European operating rates and Chinese urea export restrictions. North American natural gas prices remain highly competitive compared to Europe and Asia, and we expect Henry Hub natural gas prices to average approximately $2.50 per MMBtu for the year.

The US nitrogen supply and demand balance is projected to be tight ahead of the spring application season, as nitrogen fertilizer net imports in the first half of the 2023/2024 fertilizer year were down an estimated 55% compared to the three-year average. Global industrial nitrogen demand remains a risk in 2024 as industrial production, most notably in Europe and Asia, has yet to rebound to historical levels.

Phosphate fertilizer markets have remained relatively strong in the first quarter of 2024, particularly in North America where channel inventories were low entering the year. We expect Chinese phosphate exports to be similar to 2023 levels and tight stocks in India to support demand ahead of their key planting season.

Again, these types of supply shocks support prices which bolsters the argument for investing in Genesis Fertilizers and owning your tonnes.

Excerpts from the Outlook in Mosaic’s Fourth Quarter Earnings Report

Global grain and oilseed markets are expected to remain tight in 2024. Crop production, threatened by geopolitical unrest, weather extremes and reduced fertilization, is struggling to keep up with strong demand driven by secular demographic changes and growing consumption from renewable fuels. As a result, global stocks-to-use ratios for grains and oilseeds are expected to remain under pressure for the foreseeable future. Today’s healthy agriculture backdrop and favorable economics will continue to incentivize growers to maximize yields and apply fertilizers.

These demand factors are especially promising for the phosphate market as they are expected to be matched by tight global supply well into 2024. China’s exports are expected to remain capped as domestic agriculture and industrial demand is prioritized over fertilizer exports. Firm phosphate prices and low raw material prices suggest that stripping margins will stay elevated for the foreseeable future. In North America, after a long Fall application season and solid winter fill activities, demand strength continues into the Spring planting season. Brazil shipments are expected to remain solid in 2024 as barter ratio are favorable and growers need to replenish soil nutrients. In India, grower demand is strong and growers are waiting for higher government subsidy rates.

Potash demand for North America is expected to remain robust in 2024, and demand in Southeast Asia and Brazil is expected to improve as the year progresses. Supply appears adequate to meet that demand in the near term.

Great Chart from Peak Trading Research Explaining Recent Hedge Fund Activity in the Ag Complex

Going, going, GONE. According to Peak Trading Research, Hedge funds have liquidated long bets in agriculture futures and added to short positions in 13 of the past 15 weeks. These speculators are now the “shortest” they’ve been in 4.5 years (-647k contracts, US-$14.3B) this weekend.

Great Chart from Peak Trading Research Explaining Recent Hedge Fund Activity in the Ag Complex

In our view, if there are any shocks that make these traders uneasy with positions, short covering will send ag commodity prices higher.

North America Urea Last Week

According to Green Markets, urea prices in Western Canada were flat WoW in a range of C$720-$765/mt DEL. Urea Western Canada prices have increased by 12% since December 2023.

NOLA urea prices jumped around last week according to Green Markets. The week started with prices falling to US$330-$345/st FOB for March tons but rebounded at midweek to US$350-$355 FOB for March and US$355-$360/st FOB for February. Prices increased again later to a high of US$365-$366/st FOB for first-half March business.

On Feb 1, we highlighted that the price difference between Urea in Western Canada and NOLA “should approximately match the urea price at NOLA plus freight to Western Canada”. We are nearing that point, especially after the recent reduction in the spread from about C$307/mt on November 24 to C$166/mt on Jan 26. The five-year average spread stands at C$168/mt. This suggests that if NOLA urea prices continue to climb, Western Canada is likely to experience higher prices heading into spring.


The following week that spread dropped to C$153/mt on the back of another increase in NOLA prices. Since then, over the past two weeks, Urea Western Canada DEL prices rallied over 10%. We believe that there could be more upside going into the spring season.

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. MAP prices have risen 38% since early July 2023 in Western Canada.

MAP NOLA prices were up to a range of US$605-$625/st. from the previous week’s US$600-$615/st.

Industry Tidbits