DTN Fertilizer Outlook

Preplant Rush Coming to an End

Ammonia prices were flat to firm in April. Urea prices were flat to slightly higher on the world market, but should start dropping domestically. DAP prices were lower. (Chart by Ken Johnson)


World ammonia prices ran flat early in April and increased slightly toward month's end. Yuzhnyy export tons traded at $260 early and rose to around $270 late. Supplies were thin and demand from European and North African buyers was steady. Middle East prices also are running flat with delivered into India trading in the range of $350 to $361 per metric ton through April. Late in the month, the contract price of Trinidadian ammonia imported into Tampa settled at $320, a $10 increase. Prices at month's end were stable to slightly firmer; the market appears to be largely balanced for the time being. For the short term, we expect world ammonia prices to run flat to slightly higher. Domestic ammonia prices also ran flat with product trading at $550 per short ton at central Illinois terminals through April. Large distributors indicated supplies are at normal levels. At mid-month, corn preplant demand for ammonia was strong in the Western Corn Belt (Iowa, Nebraska) and in Illinois, but weather has delayed demand in the northern Corn Belt (North Dakota, Minnesota, Wisconsin, Michigan) and in the Eastern Corn Belt (Indiana, Ohio). Late in the month corn preplant demand was continuing but winding down in the Western Corn Belt and was finally getting started in the Eastern Corn Belt. Supplies seem adequate to meet demand and we look for domestic prices to run firm but flat in the short term.


Long supplies were moving world urea prices down in the first half of April, but a move by India into the market towards month's end steadied prices. After India's tender announcement, Chinese suppliers immediately increased their price ideas. Chinese producers have been encouraging each other not to sell prills below $220 mt fob. There were reports of backing at $210, but this could not be confirmed. Indications at $220 fob Middle East would offer the Indians similar prices but lower numbers are expected from Iran, where producers look to build exports once again. The last Iranian business done was around $200. Should only Iran go in low, other suppliers may not be willing to match. Prices for North African product into Europe have also moved lower as several production facilities in Egypt and Algeria finally got back up and running. Late in the month netbacks from Europe to Egypt were around $216 at best, having traded at $231 early in the month. Prices for Middle East granular drifted lower through April, trading at $229 to $258 mt fob early and dropping to $218 to $233 late. South American buyers have been slow to come to market with prices showing weakness. It is possible that Middle East suppliers will face lower numbers to chase after business into South America as opportunities in the U.S. and Europe evaporate. We look for world urea market prices to run flat to slightly lower in the short term. Domestic urea prices at NOLA (New Orleans, Louisiana) continued to soften slightly through April. NOLA granular barge prices were crossing at $243 to $245 early and sold at $235 to $240 late. At month's end, prices at interior terminals also started moving down despite strong spring demand in several markets. Prices at Catoosa, Oklahoma, traded at $290 to $295 early and urea was selling at $275 late. Wet conditions have lengthened the delivery window for product and, with forward prices pointing lower, wholesalers/dealers are not holding out for higher numbers. We look for domestic urea prices to keep coming down in the short term.


UAN prices at NOLA dropped slightly in April, trading at $205 to $210 early and falling $5 to $200 to $205 late. Several wholesalers mentioned supplies were tight, which also helped keep interior terminal prices firm. Prices for competing forms of N were flat (ammonia) to lower (urea). Continuing low natural gas prices are keeping producer margins very wide, allowing room to cut if necessary. We look for domestic UAN prices to run firm but flat in the short term.


World phosphate prices drifted lower through April. Tampa export tons softened only a little on several small sales to Central America; prices fell from $360 mt fob to $358 to $360. At mid-month, India announced subsidy levels, which gave importers very wide margins. Both Indian and Pakistani buyers entered the market and were making purchases at around the high $340s mt cfr. Prices for Chinese DAP were down $5 through April, settling in the mid $330s fob, which reflected business completed in India and Pakistan. Demand on the east coast of South America remains piecemeal for now, following the large quantities purchased in late March for April shipment. Prices for MAP in Brazil have eased to $355 to $360 cfr. Import demand from India could prompt South American buyers to step in to assure supply, which could work to firm world prices. However, U.S. and Chinese buying seasons are nearly complete and slowing demand could add to supply available for export elsewhere. North African suppliers also saw prices erode for sales into Europe and Turkey. Early in the month, Tunisian DAP sold for $370 to $375 fob and fell to $357 to $359 late; Jordanian DAP prices fell from $353 to $355 fob to $335 to $340. We look for world DAP/MAP prices to run flat to lower in the short term. Domestic DAP prices at NOLA also fell though April. NOLA barge prices sold in the $322 to $348 per short ton range early and were off slightly to $320 to $342 late. Interior terminal prices fluctuated from $385 early to $370 at mid-month and back up to $385 late. Pressure from imported product moved NOLA prices slightly lower, but strong spring corn preplant demand firmed interior prices in late April. As in the case with urea, poor weather has eased the logistical situation by widening the delivery window and allowing product to get into place in a timely fashion. Large wholesalers continue to indicate reluctance to build inventory. We look for domestic DAP/MAP prices to keep moving lower in the short term.


NOLA potash barge prices softened slightly through April, trading in the $180 to $190 range early and the top end falling to $185 late. Potash prices in the Mississippi Delta fell from the $225 to $230 area to $215 to $220. Domestic potash prices kept moving lower as long supplies in place, much of it on consignment, were sufficient to absorb even strong demand in several markets. We expect domestic potash prices to run flat to

Questions for Ken Johnson may be sent to talk@dtn.com