Anhydrous .45 delivered!

[SASKFARMER3]

A trucker of ours yesterday was telling me that NH3 out of Bellplain plant 150 km to our bottle works out to .45 a lb. But most dealers have their tanks and bottles filled with expensive product so no discounts. I need some others to check if they have heard anything in their area.

[dalek]

Our local co-op just sold out their fertilizer and pesticide division to a privately-owned competitor, rumour has it they bought a massive amount of product for next year at the high and have decided they can't find any other way out. Must have some sort of legal advice that the new owner won't have to live up to the prices they've already booked at? Or else the new guy's taking a big gamble.

[SASKFARMER3]

Urea continues to lead the way down for fertilizer prices in the U.S., with trade reports suggesting a deal at $300 a ton at the Gulf this week. That’s a full $80 less than last week, and represents a decline of almost 60% from recent highs. However, there are signs the market may be starting to stabilize.
The collapse in global financial and grain markets has turned the frenzied fertilizer business into a buyers market, after a surge to record prices. Importers have found it harder to arrange credit and farmers have backed away from the market, uncertain about profit margins.
However, farmers trying to pencil out budgets for 2009 still face a guessing game. While international markets trade sharply lower, many dealers locked in supplies at much higher levels and may be unwilling to write down the price unless there’s competition in a trade area.
Lack of immediate demand also makes price discovery difficult. For example, there were reports a barge of anhydrous traded $200 a ton cheaper than the last trade at the Gulf – but that last trade was weeks ago. This would put the price around $650, which still could be high. Forward prices for December out of the Black Sea are around $450 a metric ton, which translates to around $425 a short ton at the Gulf – or $650 to $700 at the farm gate if anyone is ready, willing and able to do the deal.
Bids for DAP are also easing below $800 in New Orleans, with deferred bids for the winter down to $700 a ton. U.S. DAP inventory levels were well above five-year averages, one reason at least one company has indicated it will cut back production.
Potash traders continue to watch that big sinkhole in Russia, which could halt shipments from one of the world’s biggest mines. Disruption of the rail line there last winter helped kick off the big move here in prices. The CEO of Potash Corp. today said demand for fertilizers was slow this fall, and could stay that way until rebounding spring.
Meanwhile, prices for natural gas, the primary feedstock for nitrogen based fertilizers, continues to move lower, breaking sharply today despite an inventory report that was lower than expected and a shift toward colder temperatures this week. The government reported supplies in storage rose 70 billion cubic feet this week, compared to pre-report guesses for a 76 bcf build.

[cottonpicken]

How do you pre-price anhydrous?

[TOM4CWB]

C.P.;

You lay your money down... and they deliver the NH3 in the agreed time period.

[Kodiak]

What is everyone hearig or paying for fall delivered prices for NH3, urea, or 28-0-0? In July I was quoted $487/MT for 28-0-0 delivered this fall. I know it rose higher than that, but wondering if it is now lower? 10-34-0 was around $1200/MT at the same time.

While I'm asking, what are the quotes for spring for Nitrogen products and for DAP?

[dave4441]

I was just quoted $1400/MT of 11-51. What are others hearing on phos. I paid 500 for 28-0-0 in summer and know that it went to $650, but have not heard if it has come down, any commments on 28-0-0

[SASKFARMER3]

All dealers are still singing from the same song sheet. Fertilizer is in demand and prices have to stay up. I say BS. BS BS. They go home with tail between their legs looking very very sad. If its plumeting all over the world, it should be here to.
Ammonia prices, which reached an all-time high in September, have crashed spectacularly within a matter of weeks. Ammonia prices were among the last to show any real decline, but in the last week of October world ammonia market prices moved sharply lower. Late in the month, buyers in India paid $350 per metric ton cfr against their previous purchase of ammonia at $900 two weeks earlier. Florida DAP producers realized a drop of $356 per metric ton from September to October ($931 to $575). Ammonia demand from DAP producers looks weak as more production cuts have been announced (see DAP below). Market sentiment became very bearish as the implications of the global financial crisis clarified. Ammonia buyers have withdrawn from the market as demand for their products has fallen away, and even when highly competitive offers have been made, buyers have been often unable to take tons due to rising inventories and reduced demand. We expect further decreases in world ammonia prices. Domestic ammonia prices were steady at inland terminals, but only due to lack of activity. With falling grain prices, lower gas costs for producers and sharply lower quotes for other forms of N, we expect domestic inland ammonia prices to drop sharply when trade resumes.
Urea

World urea prices fell dramatically from late September through the month of October. In late September world prices were at $700 per metric ton and as of this writing are at $300 or below coming out of Eastern Europe. Many FSU suppliers at the end of the month are desperate to secure business to prevent closure because of containment problems, meaning suppliers don't have enough proper onsite storage in which to place the output of the plant until transport is available to take it away. In fact, at month's end there were one or two closures of Eastern European plants due to containment problems. Western European urea production is also under threat from low urea prices when their high gas costs are considered; Romania could not restart production at current gas and urea price levels and clear profits.

Supply worldwide is proving burdensome and there is no relief forthcoming on the buy side. Prices at cost of production for many could mean prices may not have much further to fall but demand for November could still be very much limited to India and some small South American and European buying.

Credit remains a problem and some buyers needing tons may not readily find the credit that was previously accessible from traders. The collapse in ammonia prices this week also has to be taken into account, and it is hard to see urea finding much strength when Yuzhnyy ammonia slumps to $250 fob and prices into India trade down to $350 cfr. We expect world urea market prices to run lower in the short term. Domestic urea prices tumbled through the month, but several large wholesalers entered the market in the middle of the last week and prices moved from a low of $295 to $310 to $320 per short ton. We look for domestic urea prices to keep moving lower in the short term.
UAN

Gulf coast UAN prices, along with ammonia and urea prices, dropped steadily and substantially through the month. Natural gas prices are steady on the Gulf Coast at just under $7.00. Interior gas prices are much lower, giving increased margins to inland UAN producers, which could allow those producers to sell profitably at much lower numbers later on. With prices for competing forms of N coming off sharply, we expect UAN prices at inland terminals to move substantially lower in the short and medium term.
DAP

The world DAP market remains quiet overall with no sign of a price bottom in sight. In recent months suppliers have been anticipating the resumption of demand in markets such as South America, Europe and Pakistan, bringing with it hope of stability in prices and possible increases. But as we continue well into the fourth quarter, it is difficult to see when this fresh demand will emerge. The international financial and credit crisis is also playing a part in the lack of new buying. In order to help balance the international supply and demand balance, OCP, Morocco, is planning to shut down its primary phosphate complex for 30 to 40 days starting in November. This followed mid-month news that Mosaic plans to cut its U.S. phosphates production over the next few months by 0.5 to 1 million tons. Moroccan cutbacks should provide additional support for world phosphate prices. The outlook for the balance of the year looks bleak as buyers continue to watch and are under no real pressure to return to market.

Further out, China is likely to return to the market offering significant additional export supply and probably at competitive prices. On the positive side for DAP producers, prices for inputs of ammonia prices and sulfur are falling dramatically, with suppliers cutting price ideas sharply in order to move tonnage. Sulfur prices into India fell 90 percent from $800 per metric ton to $80 and landed ammonia prices falling from $800 to $350. We expect further deterioration in world DAP market prices. Domestic DAP prices continue to crumble with NOLA prices plunging nearly $100 this week from low $800s to $700-725. Domestic demand remains as slow as many wholesalers have ever seen for this time of year. Tight credit, carryover of high-priced inventory and plummeting crop prices are all contributing to the extreme malaise in the DAP market. We look for domestic DAP prices to keep moving lower in the short and medium term.
Potash

Potash supplies still seem thin to some wholesalers and prices for the most part have been steady over the past week. We still believe lower potash prices are on the way given demand destruction and lower prices for all other fertilizers.