DTN Fertilizer Outlook

Mixed Spring Outlook for Wholesale Fertilizer Prices

Urea barges traded at $241-$254 per ton FOB at New Orleans, Louisiana, (NOLA) the last week in March, compared to $229-$233 at the end of February. (Chart courtesy of Fertecon, Informa Agribusiness Intelligence)

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



Global ammonia prices moved lower once again in March.

Markets in the west saw the biggest declines with Yara and Mosaic eventually settling the March Tampa, Florida, contract down to $275 per metric ton (mt) cost and freight (CFR) and the April contract by the end of the month at $255, compared to $285 in February. The delayed ammonia application season in the U.S. obviously took its toll, coupled with weak phosphate prices and reduced phosphate production by Mosaic.

Reverberations are now rippling across the west, but it has yet to be seen if this can have any effect on the firm Far East market, where supply is said to be tight and spot product difficult to find. However, the reduction in the Tampa price might make it easier for Trinidad supply to compete in the Far East region.

The startup of EuroChem's new Kingisepp ammonia plant in Russia and the first export to Morocco is also creating a little sense of nervousness in the west. Turkey has succeeded in taking $10 off the price achievable in Yuzhnyy from last month, down to $255-$260 FOB (free on board -- the buyer pays for transportation of the goods) per mt for just 6,000 mt, but further falls seem inevitable, especially for larger volumes.

Overall, it seems there may be some continued slight weakness in the short-term basis weak phosphate prices and soft natural gas prices.


Aside from the reduction at Tampa, domestic ammonia prices held mostly stable in March, although there was little activity due to wet weather. There have been some pockets of application taking place in Kentucky, Missouri, Oklahoma and Texas. But, for the most part, it has been a slow start to spring ammonia applications in the Midwest. With the application window tightening, spring ammonia volumes are expected to be reduced, and prices will eventually be affected. But, so far, producers have kept prices unchanged, waiting for activity to start up.

Corn Belt FOB values are unchanged at $470-$495 per ton (t) FOB for prompt and $530-$545 for full spring. However, there have been few new sales recently as buyers wait to use up current commitments before returning to buy more. With significant downside expected, dealers are being careful not to over procure for spring.

Ex-plant offers (the price at the factory, not including any other charges, such as delivery or subsequent taxes) in Oklahoma are posted at $390-$460/t, down slightly from $400-$480 last month.

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



The downward spiral in global urea prices appears to have stopped in March, or at least subsided.

After cutting prices to sell the remainder of March product at the last minute, North African producers went on to sell April and May cargoes, putting themselves in a comfortable position with their sales books and increasing FOB values back up to $235-$260 per mt by the end of the month.

Expectations of an India tender, and then the actual announcement, were also mildly supportive late in the month. The tender is set to conclude on April 3, and there is uncertainty as to how much India is wanting to buy. Middle East FOB values edged slightly higher in March, ending at around $235-$240 per mt FOB, compared to $232-$234 at the end of February.

We have seen a much-needed pullback in Chinese exports with prilled FOB offers now priced out of the market. However, import demand in the east has been slow with Australia suffering from drought and Thailand and Vietnam suffering from too much rain as an effect of the "weak" El Nino. Overall, this has left pricing largely flat in March.

The price outlook is mostly soft, but there is the potential for a small rally depending on India's purchasing decision as well as how the U.S. spring season progresses.


The U.S. barge market finally woke up in March with New Orleans, Louisiana, (NOLA) barge prices registering a slight month-over-month increase, the first time since September. However, some of this is thought to be a result of logistical problems. Barges traded at $241-$254/t FOB the last week in March, compared to $229-$233 at the end of February.

Market participants are uncertain whether this firmer trend will continue, as weather continues to hold farm demand back and potential overseas spot cargoes loom over the market. However, the major positive continues to be the expected lack of opportunity to apply anhydrous ammonia this spring, which will mean nitrogen requirements will have to be met with increased applications of upgraded products.

Logistical issues appear here to stay through at least the next few weeks, as melting snow has contributed to high water levels. This is expected to continue delaying northbound fertilizer shipments, which will make it tough for distributors to get product in place to feed the second round of demand after initial stocks at the retail and wholesale levels are spent.

The outlook for domestic urea prices is stable to firm with prices likely to strengthen further once the season commences. Potential for spot urea imports may keep a cap on the extent to which prices can increase.


Domestic UAN prices continued to move lower in March, as limited application activity stressed producers' storage capability.

The big news came mid-month when the European Commission announced the decision to impose provisional antidumping measures on UAN imports from the United States, Trinidad and Russia. CF and other U.S. exporters to the European Union face a provisional duty of 22.6%. The fallout is expected to increase U.S. supply in the short-to-medium term as overseas suppliers export more to this market instead of Europe and CF keeps more supply domestically rather than shipping to Europe.

NOLA UAN 32% barge prices were reported at $165-$170/t FOB at the end of March, down $10 from late February.

CF dropped its river terminal prices at Cincinnati, St. Louis, and Mt. Vernon by $20 in March, bringing them to $190/t FOB. The continued lack of movement to the field is thought to have put the producer in a tough spot with its 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 short-term domestic price outlook for UAN is stable to soft. While a shorter window for ammonia application could garner positive impacts for UAN sales and prices, the antidumping duty could see more aggressive prices for imported product.



Global phosphate prices continued to fall in March. At the root of the market weakness has been the oversupply in the U.S. domestic market coinciding with a slower-than-anticipated spring season in China.

The market in the Americas fared the worst with barge prices leading the way down, although some stability was evident by the end of March. Even Mosaic's announcement of production curtailments had little effect. Meanwhile, in Brazil, buyers have remained content to buy only as needed while watching producers position product on the ground in anticipation of the start of the main season. Brazil MAP CFR values declined to $395-$405/mt by the end of the month, compared to $405-$410 in late February.

Asian prices have held up better; however, the unprecedented volume of first-quarter imports booked by India, coinciding with the Chinese spring season, should have pushed prices up. What actually happened was that the FOB China price for DAP fell from $388-$391/mt in late February to $382-$386 in March as the Chinese spring season failed to impress, prompting a need to find alternative outlets.

The outlook for phosphate prices is stable to soft as a lack of demand-side drivers continues to limit upside to prices.


NOLA barge prices increased early in the month after Mosaic announced a 300,000-ton production cut for the spring season. By the end of the month, however, DAP prices moved back to $332-$334/t FOB, essentially flat from $300-$338 at the end of February. MAP has been trading as low as DAP or even lower in some cases.

The late spring in many areas of the Midwest is currently the main drag on domestic phosphate prices as well as high inventory carryover from last fall and heavy imports earlier this year.

Midwest river terminal prices fell to $360-$380/t FOB for DAP, compared to $380-$400 in late February. Warmer weather has signaled the start of spring, and small pockets of activity are reported in the Midwest. However, there have been reports that application of P products has been slightly shadowed in favor of nitrogen.

With imports starting to slow from March, as well as end-user demand expected to pick up, prices are expected to stabilize at some point in the coming weeks.


Domestic potash prices could not escape the bearishness in fertilizer markets in March as the slow start to spring weighed on sales books. With some farmers starting to prioritize planting, some wholesalers are concerned that potash sales volumes will be limited this spring. NOLA barge prices fell to $270-$275/t FOB in March, the lowest level since October, down from $274-$283 in late February. River terminal prices were mostly unchanged at $305-$315/t FOB, but more offers were apparent on the low end of the range compared to late February.

The outlook for potash prices is slightly soft in the short term. Following a below-average fall season and heading into what also looks to be a below-average spring season, there is very little upside potential for potash prices.


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