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Fertilizer Market Report – September 4, 2024
Summary of RaboResearch Food & Agribusiness Semi-Annual Report
Fertilizer Market Report – September 11, 2024
In this week’s fertilizer report: Summary of RaboResearch Food & Agribusiness Semi-Annual Report, China’s Probe of Canadian Canola Will Put Both Exports and Farmers in Jeopardy, Ag Complex Non-Commercial Hedge Fund Positioning, Last Week’s North American Urea and Phosphate Action, and Other Industry Tidbits.
News of the Week
Summary of RaboResearch Food & Agribusiness Semi-Annual Report
Fertilizer Trader Ebrahim Argha summarizes the fertilizer outlook from RaboResearch.
“A new RaboResearch Food & Agribusiness report reveals challenging circumstances for global fertilizer markets in 2024. Despite initial hopes for recovery, fertilizer demand has not sustained the growth observed in 2023. Demand for key fertilizers remains sluggish. The fertilizer affordability index, currently neutral, is expected to turn negative later in the year due to pressures on farmers’ operating margins.”
China’s Probe of Canadian Canola Will Put Both Exports and Farmers in Jeopardy
“Now, China is threatening to investigate Canada for potential dumping of canola into its market. In international trade, dumping is a type of price discrimination where a product is sold at different prices in domestic and export markets. Essentially, it involves selling a product in a foreign market at a price lower than its normal value in the home country.
This decision came after Canada imposed a 100 per cent tariff on electric vehicles and a 25 per cent tariff on steel and aluminium from China effective Oct. 1, 2024. It’s clear this move by China is a direct retaliation for the tariffs on electric vehicles.
Trade tensions between countries can severely disrupt international trade. My previous research demonstrated how trade tensions between Canada and the United States during Donald Trump’s presidency negatively impacted trade between the two countries, particularly in the agri-food sector.”
Ag Complex Non-Commercial Hedge Fund Positioning
Peak Trading Research provides excellent coverage of the non-commercial ag trading space. It is vital to monitor hedge fund positions to anticipate potential price movement in ag commodities.
“Non-Commercial hedge fund traders have covered shorts and added new longs during the past two Tuesday-Tuesday COT windows and are now -543k contracts (US-$14.4B) net short agriculture futures this weekend … versus -703k contracts (US-$17.1B) just two weeks ago.”
North America Urea Last Week
According to Green Markets, urea prices in Western Canada rose C$5/mt to a range of C$645-$650/mt from a range of C$640 -$645/mt the previous week. We understand that Yara Belle Plaine is on allocation, which will likely support prices in Western Canada in the near term.
Last week, NOLA urea prices were up to a range of US$308-$313/st from a range of US$303-$309/st the previous week due largely to Indian tender results.
According to Direct Hedge, this week started with urea Nola spreads of US$310/st bid and US$315/st offer for September. October was quoted at US$310/st bid and US$315/st offer. November was US$310/st bid and $315/st offer and Q4 was US$310/st bid and US$316/st offer. All were higher WoW.
We are seeing the Indian urea tender results maintaining a bid under global urea markets.
North America Phosphate Last Week
According to Green Markets, the latest delivered Western Canada MAP prices were up on the high of the range WoW to C$1,080 – $1,100/mt. MAP supply remains tight across North America.
MAP NOLA prices also remained flattish WoW at US$635/st.
China’s decision to restrict phosphate exports by extending the inspection process timeline from 14 days to 40 – 70 days has essentially halted exports, which will undoubtedly tighten the already strained global phosphate supply.
Industry Tidbits
