Fertilizer prices remain soft as production cuts mount Weekly Fertilizer Review for Nov. 21, 2008
Despite sharp production cutbacks supplies of most fertilizers are sharply higher, with DAP and urea inventories in North America well above five-year averages at the end of October, according to industry data. Not surprisingly, prices continue to soft, as farmers remain wary about buying fertilizer and trades can’t find financing for cargoes.
The only product remaining in tight supply is potash, where inventories remain relatively low, though they finally moved above year-ago levels at the end of October. Some production internationally is being curtailed as well, which could keep the pipeline tight, helping support prices.
The combination of lower natural gas prices and sharply lower ammonia prices has returned producer margins back to their normal range, after profits surged on this year’s run to record prices. Ammonia prices remain soft on world markets, with one deal done around $220 a short ton out of the Black Sea, and December bid at $200. Prices at the Gulf remained flat around $320, but could fall another $75 based on the international market. Concerns remain about high-priced inventory in the U.S., however, and whether the market will be able to handle spring demand due to slow applications this fall.
Urea at the Gulf was quoted $30 lower this week at $251 a ton. Prices out of the Black Sea appear to be stabilizing in the short term, but buyers and sellers there remain far apart for deferred deliveries, with January bids down to $200 a short ton.
DAP at the Gulf broke sharply in the latest week, with prices now put at $507.50, another steep drop. December and January DAP is bid at $400, also down from last week.
While cold temperatures cover much of the Midwest today, the natural gas market outlook remains bearish. Supplies in storage increased again the week by 16 billion cubic feet – the trade expected only a 1 bcf rise, even though stocks normally start decreasing now to meet heating demand. Industrial use continues to wane due to the economic slowdown, and forecasts for the winter call for above normal temperatures over most of the Midwest.
Fert company in Ohio taking a 13 million right down because of drop in Fert.
One Major Sask dealer didn't prebuy!
Despite sharp production cutbacks supplies of most fertilizers are sharply higher, with DAP and urea inventories in North America well above five-year averages at the end of October, according to industry data. Not surprisingly, prices continue to soft, as farmers remain wary about buying fertilizer and trades can’t find financing for cargoes.
The only product remaining in tight supply is potash, where inventories remain relatively low, though they finally moved above year-ago levels at the end of October. Some production internationally is being curtailed as well, which could keep the pipeline tight, helping support prices.
The combination of lower natural gas prices and sharply lower ammonia prices has returned producer margins back to their normal range, after profits surged on this year’s run to record prices. Ammonia prices remain soft on world markets, with one deal done around $220 a short ton out of the Black Sea, and December bid at $200. Prices at the Gulf remained flat around $320, but could fall another $75 based on the international market. Concerns remain about high-priced inventory in the U.S., however, and whether the market will be able to handle spring demand due to slow applications this fall.
Urea at the Gulf was quoted $30 lower this week at $251 a ton. Prices out of the Black Sea appear to be stabilizing in the short term, but buyers and sellers there remain far apart for deferred deliveries, with January bids down to $200 a short ton.
DAP at the Gulf broke sharply in the latest week, with prices now put at $507.50, another steep drop. December and January DAP is bid at $400, also down from last week.
While cold temperatures cover much of the Midwest today, the natural gas market outlook remains bearish. Supplies in storage increased again the week by 16 billion cubic feet – the trade expected only a 1 bcf rise, even though stocks normally start decreasing now to meet heating demand. Industrial use continues to wane due to the economic slowdown, and forecasts for the winter call for above normal temperatures over most of the Midwest.
Fert company in Ohio taking a 13 million right down because of drop in Fert.
One Major Sask dealer didn't prebuy!
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