DTN Fertilizer Outlook

Strong Early Season Demand Supporting Most Domestic Wholesale Fertilizer Prices

(Chart courtesy of Karl Stenerson)

Here is a breakdown of international and domestic wholesale prices and trends by the various fertilizers:



International ammonia prices remained firm during February as supply out of the Black Sea was still severely restricted for most of the month. The pumping of ammonia from Russian chemical company TogliattiAzot to Yuzhny, Ukraine, restarted early in February. Shortly afterward, however, technical issues with the pipeline halved the throughput, resulting in slower-than-expected ammonia flow to the port. Remedial work on the pipeline is ongoing, and it is hoped that the flow will improve in March. Export tonnes (free on board -- the buyer pays for transportation of the goods) Yuzhny are assessed at $300 to $310 per metric ton (mton), up from $280 to $300 mton at the end of January.

Prices in the Middle East moved up to $300 to $345 mton fob, from $220 to $305 at end of last month, with producers taking advantage of supply shortages.

Elsewhere on the supply side, in Trinidad, there are reports that increased gas curtailments will be in place in March in the range of 35% from the current level of around 20%.

On the demand side, in the United States, following the January settlement of the Tampa price for February deliveries at $320 mton cfr (cost and freight) (a $70 increase from the January price), late in February another $10 uplift was secured for March to $330 cfr.

Elsewhere, demand is stable. Demand from Turkey continues to be good following the lifting of a CAN transportation ban last month. In North Africa, OCP Morocco continues to ramp up its phosphate operations with projected consumption. Tunisia GCT continues to run well, requiring regular incoming ammonia cargoes, and elsewhere demand is assessed as broadly stable. However, in India, multiple ammonia consumers are planning or are already undergoing, seasonal maintenance turnarounds, reducing import requirement.

The short-term outlook continues to be firm with possible price softening expected in the later part of H1, subject to currently restricted export supply returning to the market.


Domestic ammonia prices moved up across all regions. A strong early start to the direct application season has been driving price increases as have supply shortages.

Farmers in Kansas and Missouri ran hard through most of February and distributors in the area report spring anhydrous application to be 70% to 75% complete. However, wholesalers are reporting that most producers in the region have them on allocation, and wait times for loading are still long, together effectively putting a low ceiling on the tonnage they can supply their customers in the nearby. Southern Plains ex plant ammonia prices jumped to $460 to $470 per short ton (ston) for new sales at the end of the month, up from $345 to $350/ston last month.

Snow and rain moved through the upper Midwest late in February, slowing some early start application work in southwest Iowa and parts of Nebraska. Farmers are hoping to get back in the field and continue running some ammonia soon. Omaha and Sioux City prices were in the $430 to $435/ston range at month's end, up $40 from last month.

Central Illinois resellers have pulled nearby offers due to limited availability. Sales during the month were strong as more farmers started hitting the fields late in the month and getting some good application done in central and southern Illinois. Rain has since slowed demand, but the early start to the spring application season has taken many suppliers by surprise, and the region has found itself short of tons. Last sales were done at $470/ston, but prices look to further increase once the supplier restocks.

River terminals are also subject to tight supply and spot outages. CF has increased its list price at Henderson, Kentucky, and Mt. Vernon, Indiana, to $500/ston. No sales have been reported at this price yet, but once application gets rolling in more areas of the Corn Belt and the wholesaler/dealer supply chain needs to reload, it is expected they will have to pay at or near this level. Likewise, pipeline prices have increased with Hermann, Missouri/Wood River, Illinois, both at about $490/ston.

In Texas, wholesalers report having a good run, with now about 90% of ammonia application for corn and row crops completed.

Tight availability is expected to support prices in the Midwest through spring. At this point, it seems farmers will have ample opportunity to spread anhydrous, which is bullish for prices through spring.

In related news, OCI's Wever, Iowa, plant has still not been brought online, but the company has hopes it will be producing soon. And during Mosaic's recent earnings call, it has been said that ammonia is expected to start being delivered under the supply contract with CF Industries in the second half of the year.



Urea prices held their level through the first half of February but started to weaken by the end of the month.

European buying slowed with high stock levels reported. The unexpected export volumes from Pakistan are coming to the market, and Brazil's huge January import figure has also led to stock build that has helped buyers push down prices in February.

Granular urea sales in Egypt were made as high as $285 mton fob at the end of January, but are now trading in the $260s mton. Middle East fob also traded lower at $213 to $250 mton, down from $265 to $280 mton last month.

The U.S. NOLA (New Orleans, Louisiana) price started to decline in the second half of February, with traders looking to liquidate prices rather than paying for storage. The import line up has increased, and already there are reported concerns that a strong ammonia application could dent the urea season.

A bullish factor remains the possibility that China could be short of urea for the spring season and exports could be cut. This remains more speculation at present, but lower Chinese exports have already been factored in. Chinese exports were trading at $248 to $252 mton fob at the end of February, down from $265 to $275 last month.

The short-term outlook for urea prices is steady to bearish due to relatively high levels of inventory and weak demand.


Prices in NOLA were looking softer by the end February, with barges for February/March shipment sold at $219 to $229/ston, down from $240 to $250/ston at the end of January. This largely seems to be traders looking to liquidate positions, rather than pay storage costs.

As far as application goes, there continues to be a little wheat top-dress going down in the Southern Plains as well as the Central and Eastern Corn Belt. Sales volumes in the Midwest are light as urea demand for wheat has been weak. Also, many spring buyers still remain on the sidelines. They are nervous that urea demand will be exceptionally weak this year due to poor corn economics and that an early successful ammonia run could further diminish urea demand.

In Texas, row-crop application seems to be about 80% to 90% complete. Sales have been steady along the Gulf Coast where prices are flat to slightly lower at $275 to $285/ston. Short-term tightness that pushed prices up earlier in the season has now abated, and prices have been able to pull back slightly. Also, a new player entered the market this month: American Plant Food unloaded its first shipment of urea at its new Houston facility in mid-February.

Interior prices were lower as warehouse values succumb to the pressure of the deflated NOLA market. Wholesalers are still waiting for significant demand to appear. Wheat top-dress demand has been very weak in all areas and has not pulled enough tons to make wholesaler/retailers need to reload. Catoosa/Inola fob prices were down about $15 to $20 from last month to $260 to $265/ston. Latest sales reported in the Corn Belt were around $265 to $275/ston.

In general, neither sellers nor buyers are in a state of urgency. Peak demand is yet to start, and stocks still need to be moved through. Also, wholesalers are still optimistic and do not feel much need to sell tons at this price level.

Lake Pepin was open as of March 1. This may help support barge prices in the short-term; however, real demand is needed to drive prices, and as of now, it looks to be two to three weeks before that appears. If the NOLA market remains in the $220s or lower, we may see more warehouses bring prices down. We look for prices to run flat to slightly softer in the short term.


At NOLA, further softening in prices was seen with UAN barges at $185 to $192/ston at the end of February, down from the $190 to $195/ston done January. And on the East Coast offers have moved down to $200 mton cfr with bids in the low to mid $190s cfr. This comes after a sale was reported at $205 mton cfr earlier in the month.

Interior UAN prices were mostly unchanged from last month with $205 to $235/ston covering fill and prepay for most Midwest warehouse fob values. Activity is light and new sales have been slow. Some dealers in the central Corn Belt are placing a few small orders to further their preplant coverage but are generally still waiting to buy for sidedress.

OCI's Wever, Iowa, has not begun its new ammonia plant. The company has been informing people that production is imminent. Even if that proves true, market participants do not expect any UAN production this spring.

The short-term outlook for domestic UAN prices is flat. Limited availability from domestic producers and deferred side-dress demand should continue to support these UAN prices over the next month.



Good demand and constrained supply allowed the January rally in prices to continue well into February, with no sign of an imminent end.

Demand appears firm in Brazil. Price levels of MAP and DAP are in the range of $395 to $398 mton cfr while Russian MAP has been sold as high as $405 mton cfr, which is up substantially from sales done a month ago at $350 mton cfr.

With North American demand also healthy, prices for barges have increased to $330 to $340/ston fob NOLA for DAP and $360 to $365/ston for MAP. This is equivalent to up to $358 to $369 mton cfr for DAP and up to $391 to $396 cfr for MAP, the latter on a par with Brazilian values. Mosaic has also seen good export demand from Latin America. Near the end of the month, Mosaic sold 12,000 t DAP/MAP to Latin America at $375 fob, up $40 from highest fob values achieved in January.

On the supply side, the Chinese are refusing to budge off the asking price of $370 mton for export tonnes. Chinese export data reflects the general curtailment in availability with lower volumes of DAP loading in January than last year. Price indications are at $368 to $370 mton fob China, up from $350 to $360 mton at end of January.

In Morocco, Jorf Lasfar faced loading issues for much of the month, which helped keep the international market tight. Export prices increased from $333 to $350 mton at the end of January to $385 to $388 mton recently.

Continued interest in Europe and Africa and emerging signs in Latin America result in an overall positive outlook for demand, while producers manage to keep the market tight thanks to loading issues in Morocco, a cut in operating rates by Mosaic, and low export availability from China. We look for international prices to run steady to firmer through March.


February saw DAP/MAP barges firm on good early application demand and tight supply. Price for prompt DAP barges are at $337 to $338/ston NOLA, up from $312 to $315/ston during January. While MAP barges have seen even further price increases, trading at $355 to $365/ston fob NOLA at the end of February, up $30 from sales in January. Barges have been extremely tight because of the delays suffered in shipping from Morocco, but several vessels are scheduled to arrive shortly, which is putting pressure on forward pricing.

Adding to the bullishness surrounding tight DAP/MAP supply, Mosaic announced in their latest financial disclosure a strong reduction in operating rates at its phosphoric acid units, with targets around 70% of nameplate capacity instead of the more typical mid-80% experienced recently.

Midwest buyers who have time yet before spring application pulled back from buying after warehouse prices increased about $15 to $20 for DAP during the month. Wholesalers in the Northern Plains and Midsouth markets reported little to no buying interest for DAP or MAP.

Meanwhile, new sales continue in other markets where application has already begun and buyers are forced to pay up. Wholesalers have reported good demand due to increased planted soybean acres. Truck sales fob Tulsa are being done at $365 to $370/ston for DAP. Meanwhile, MAP is extremely tight on the Arkansas River, and the Plains regions in general, and many suppliers are completely sold out in the nearby. One producer has reportedly pulled their warehouse MAP offers in Nebraska and South Dakota. Sioux City, Omaha and Saint Joseph MAP prices increased about $20 from last week, now in the $415 to $425/ston range. MAP has traded at a $40 premium in Tulsa and sellers with prompt tons available have reportedly been asking as high as $420/ston.

Tight supply and in-season demand should support DAP/MAP prices through March.


Potash barges firmed up to $220 to $228/ston late in February with imported tons reflected by the lower end and domestic by the higher. In January, the highest barge trade was priced at $215 fob NOLA. Interior prices continue to see increases, most up by about $10 from last month in the $245 to $265/ston range depending on the warehouse. Prices in the central Plains are the most firm, around $260 to $270/ston, where farmers continue to have strong early-application run. Wholesalers reported moderate movement out of Catoosa/Inola. Application is going in moderate amounts in the central and Southern Plains. Farmers in the Eastern Corn Belt are also starting to apply some potash for mostly pasture work.

We expect domestic potash will run steady to firmer as distributors gradually sell through export tons at lower prices.

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