DTN Fertilizer Outlook

US Wholesale Fertilizer Price Outlook Mixed Ahead of Spring Application Season

DAP barge prices fell $30 on average from last month to $330 to $338 per ton FOB. (Chart courtesy of Fertecon, Informa Agribusiness Intelligence)

Here is a breakdown of wholesale prices and trends of various fertilizers.



The global ammonia market treaded a fine balance in February but eventually tipped slightly into oversupply with prices ending February down slightly from January.

Baltic ammonia availability is tight as ammonium nitrate production in Russia operates at high rates to fulfil domestic requirements, but the March price has been settled in the low $270s per metric ton (mt) FOB (free on board -- the buyer pays for transportation of the goods) as opposed to the high $270s agreed for February.

In the U.S., the Dyno Nobel ammonia plant in Waggaman, Louisiana, restarted after an unplanned outage that lasted close to 40 days. Yara and Mosaic have yet to settle the Tampa contract price for March. Reports suggest Yara is pushing for another rollover, while Mosaic is hopeful of a reduction of $5 to $15. While global markets seem to be more in balance, late domestic application and weak phosphate prices are probably Mosaic's grounds for a reduction.

On the positive side, India is taking good volumes so far with few downstream turnarounds announced. Turkey is also taking good volumes and Europe is also pulling on metric tons.

Overall, it seems there may be some continued slight weakness in the short term, basis weaker nitrogen and phosphate prices.


More winter weather in the north and rainy weather in the south have again pushed back expectations for the start of ammonia applications in the Corn Belt. At this point, a drastic turnaround in weather conditions would be needed to get farmers into the field on time. This seems very unlikely, with short-term forecasts expected to keep fields sloppy. A shortened application window is expected to reduce ammonia volumes this spring, and this is putting a halt on new ammonia sales.

Despite bearish demand, prices were largely unchanged in February as sellers see no reason to start fighting over sales that have not yet surfaced. There also remains the possibility that a widespread breakout in applications could keep supply tight and prices supported. But this would only be a very short-term impact, as lower prices are expected by the end of the season.

Corn Belt FOB values are unchanged at $470 to $495 per ton (t) FOB for prompt and $530 to $545 for spring prepay.

Ex-plant offers (the price at the factory, not including any other charges, such as delivery or subsequent taxes) in Oklahoma are posted at $400 to $460/t for prompt and $440 to $480 for prepay. Delivered quotes are more aggressive with tons out of Beaumont, Texas, reported as low as $270 FOB, despite losing a handful of days' production due to an unplanned outage. There was a run of activity in Texas and a bit of activity in Kansas during February, but both areas saw moisture that slowed things back down. Corn planting is now ramping up in Texas.

The price outlook for domestic ammonia prices is weak unless there is a strong widespread run, but this seems unlikely with current weather trends.



Urea markets continued on their downward trajectory at the start of February on the back of low liquidity. Mid-month, North African FOBs bottomed out. However, benchmarks elsewhere continued to move lower with a rebound looking more challenging, owing to slow demand.

Egyptian producers bit the bullet and sold all remaining February and most of March availability at prices down to the low $230s mt FOB, compared to $257 to $285 at the end of January, at which levels it made sense for traders to step in and cover shorts for Europe and Turkey. This then led to a flurry of sales with FOBs in Egypt ending the month at $254 FOB on the high.

There was a report of a sale to the West Coast of North America in the last week of the month, possibly reflecting below $230 FOB Arab Gulf. However, there were also some pockets of better news, with Brazilian CFR (cost and freight) and Baltic FOB prices stabilizing, as well as China mostly remaining a nonparticipant on the export market.

Even though the Chinese appear to be priced out of the market, looking ahead, it remains difficult to see any demand drivers leading to stability. For now, it is likely we will continue to see further discounting in the coming weeks.


Domestic urea prices were softer in February as demand remained limited due to the weather. Barges traded hands at $229 to $233/t FOB at the end of February, compared to $243 to $250 in late January.

High moisture levels caused by winter weather and heavy rain have dampened application opportunities in the Corn Belt, Midsouth and Wheat Belt. However, application in central and western Texas has begun.

On the positive side, there are expectations of good urea demand this spring when it does arrive. Expectations for strong spring urea demand are bolstered by increased corn planted acres and a poor fall application season, combined with a likely tight preplant window. That means more nitrogen requirements will have to be met post plant by urea and/or UAN.

There is also optimism for winter wheat demand moving forward as application in recent months has been deferred.

The price outlook is mostly steady as end-user demand ramps up to mostly match supply.


UAN prices moved lower in February on the back of a $10 CF price drop at Cincinnati, Mt. Vernon and St. Louis to $210/t FOB for 32%. The continued lack of movement to the field is thought to have put the producer in a tough spot with late first-quarter sales books. Furthermore, the producer could be taking a more defensive approach as the EU antidumping investigation looms and producers abroad are more apt to place cargoes anywhere but there.

The UAN barge market has also softened with latest prices at $175 to $180/t FOB NOLA (New Orleans, Louisiana), compared to $190 to $200 at the end of January.

Like urea, market participants are optimistic about UAN spring demand, but widespread end-user activity remains too far in the distance to get excited about much now.

The price outlook for UAN is slightly soft in the short term, due to weaker urea prices and the expectation for more pressure from imports due to the impending result of the EU antidumping investigation.



Global phosphate price levels registered further weakness in almost all regions in February. The Americas continued to see the sharpest falls.

In Brazil, a spot sale was reported sub-$400 per mt CFR, compared to $425 in late January. However, even at $395 CFR, the Brazilian market looks attractive compared with the U.S. barge market, which equates to the mid-$360s/mt at NOLA.

Looking east, India was awash with import tenders, but prices edged slightly lower through the month.

In Australia, severe flooding caused the closure of the rail line between Townsville and Phosphate Hill. Therefore, Incitec Pivot Limited had to look to the import market to cover the shortfall from its plant at Phosphate Hill for the domestic market. Four cargoes have now been booked from China for March shipment, and more could follow if the issue takes longer to be resolved.

The price outlook is weak with slow demand globally expected to continue weighing on prices.


The phosphate barge market has taken another turn for the worse with DAP barge prices falling $30 on average from last month to $330 to $338/t FOB. MAP is following DAP down, with latest indications at $335 to $343/t FOB.

A combination of fall carryover, late spring, logistical issues and excess imports have brought relentless pressure to the market, driving the price down for 20 consecutive weeks. Importers are looking at re-export options, but opportunities here also appear limited with recent weakness in Brazilian CFRs making the economics less attractive. The March import line-up does look light, but unless activity in the countryside improves, any volume at all would appear to be too much for this market.

On the positive side, upriver and inland pricing remains at large premium to what replacement costs out of NOLA would imply. With application demand hopefully on the verge and warehouses full of more expensive product, wholesalers are not in a hurry to drop pricing. River terminal prices for DAP vary but are around $380 to $400/t FOB with MAP at an even spread or $5 higher.

The outlook for domestic phosphate prices is soft in the very short term, considering buying interest is expected to continue to be low while imports appear to be strong. However, with imports starting to slow from March and end-user demand expected to pick up, prices are expected to stabilize at some point in the coming weeks.


February brought little change to the domestic potash market. Prices were mostly steady, and weather continues to hold back application work across the Midwest, except for a couple of pockets where some frozen ground is being applied. At this point, concern is starting to build that the late spring will lead to a shortened preplant window and, therefore, reduced potash applications.

Barge prices were marginally softer with indications now at $274 to $282/t FOB, compared to $275 to $285 in late January. River terminal prices are unchanged at $305 to $315/t FOB, as are Canadian producer offers of $330 to $340/t FOB inland Midwest warehouse.

The outlook for potash prices is steady in the short term, but prices are expected to firm up to producer-posted values during the spring season. After that, it seems likely that producers will be looking to discount prices for the summer fill period.


Editor's Note: This information was supplied courtesy of Fertecon, Informa Agribusiness Intelligence.