DTN Fertilizer Outlook

US Wholesale Fertilizer Prices Seen Rising in Short Term as Demand Increases

March increases in nitrogen prices across most fertilizers, caused in part by production interruptions during a winter storm in February in the U.S. Gulf, led to increases of over $100 per ton for direct-application ammonia and UAN, bringing the latter to a more costly level on a per-unit-of-nitrogen basis. (Chart courtesy of Fertecon, Agribusiness Intelligence, IHS Markit)

The following is a breakdown of wholesale prices and trends of the various fertilizers in March and first two weeks of April 2021.



Fertilizer application in the Southern U.S. was delayed overall as winter weather and frequent rains kept fields wet ahead of a warming trend later in March. Pasture-use land saw urea applied in the first half of the month; however, ammonia direct application was only just beginning as frequent rains kept fieldwork subdued in much of the country.

In the first week of March, U.S. producers began to reoffer ammonia around $125 per short ton (t) higher in the Corn Belt following production interruptions in February, related to the large winter storm that crippled chemical production in the U.S. Gulf, as well as much of the country's nitrogen fertilizer production.

From Ohio to the Mississippi River, Eastern Corn Belt initial pricing following the production interruptions was reported at $600-$650/t free-on-board (FOB), while to the west, price offers ranged from $570-$590/t FOB in Iowa and Illinois. In Nebraska, prices were reported at $570-$600/t FOB, while in North Dakota, offers were reported as high as $675/t.

In Oklahoma, ammonia plant prices rose to $530-$600/t compared to first offers after the nitrogen production interruptions in February at $470-$520/t. Meanwhile, Port Neal prices were said to be at $570-$590/t in Iowa at the end of March, an increase of $100-$120/t from February.

From a quiet front half of March forward, domestic ammonia prices are expected to continue firming when prompt demand inevitably puts a strain on transport logistics and drives prices higher for available tonnage with the potential to soften as U.S. supplies return to pre-February levels.


March was a month of further firming in the ammonia market that concluded with another $100 monthly increase at Tampa, as Yara and Mosaic had agreed to a price for April shipment of $545 per metric ton (mt) cost and freight (CFR). That increase followed February's $115 increase from $330/mt CFR.

Global ammonia firmed for much of March on tight availabilities from top producers. By the end March, there had been no further spot business in the Black Sea, however, with availability from Russia's largest producers set to be tight through April and into May. Prices were flat through much of March at $430/mt FOB, up $60 from the previous month's highs.

Similarly, Yara was unable to agree on fixed prices with its Russian contract suppliers for March, and fallback formulas were employed to find a range of $420-470/mt FOB.

Supply was also tight through March in the Middle East, resulting in traders selling volumes for shipment from the Red Sea to the United States, Jordan and India. Given firm pricing across the globe, our outlook remains firm in the short term on ammonia values.



Granular urea barges were assessed at $365-$405/t FOB at New Orleans, Louisiana, (NOLA) to end March, higher from February trades from $346-$359. Trading heated up in anticipation of India's most recent tender before the event would take a bearish toll on the market on fewer volumes accepted than offered.

Further complicating barge transactions in March were stevedoring delays due to daylight-only unloading restrictions and high water on the lower Mississippi River, which were estimated to be causing around one week of delays for unloading import cargoes at peak. River terminal prices along the upper and lower sections retreated slightly from March's highs to $410-$430/t FOB but still surpassed February's offers at $380-$390/t FOB.

At the plant level, offers were reported at $450-$460/t FOB in eastern Oklahoma, up from $400-$420 in late February. Port Neal urea in Iowa rose from similar levels to $460/t FOB during one of the last weeks of river closings as barges are now able to transit to the Upper Mississippi River once again, which will help balance supplies in markets north of Cincinnati and St. Louis.

We expect urea prices to firm in the short term as preplant applications finish and sidedress needs emerge, especially if urea stays at its current discount to UAN on a per-unit-nitrogen basis.


With many positions hedged on the timing of India's tender announcement, the global urea market was perceived in a standoff throughout the better part of March. Questions on how much volume China and the AG can provide for India fueled trepidation for both traders and for buyers who had opted to defer purchases.

On the last day of the month, India accepted a total of 802,500 mt through its latest urea purchase tender, which closed March 22 for shipment from load ports by April 28 at the latest, only about half of the over 1.93 million total mt offered originally, due in part to shipping constraints for suppliers.

The largely stable market in March was dotted by pockets of firmness, such as Egypt, where prices increased from $385-$390/t FOB to $400 by the end March, and high freights from the Arab Gulf to NOLA were of concern for producers and traders alike. Brazil had exhibited largely upward trends throughout the month as well, at $395-$408/t CFR to end the month, up from $385-$390 in the month prior.

Following the India tender, the urea market ended March somewhat soft as the Easter holiday brought activity to a slowdown to the month as traders awaited the Indian outcome before taking further positions.


Offers have remained more or less unchanged since UAN producers reoffered volumes following production interruptions in February and have not seen too much upward pressure with the U.S. planting season and application activities pushed out later into the season by bands of rain in the central and eastern U.S.

Initial offerings in March were around $100/t higher from February offers before Winter Storm Uri arrived in the U.S. Gulf. The storm brought NOLA UAN 32% barges to the $300/t FOB level where they stayed for much of March on low liquidity on account of slow prompt demand.

With most nitrogen production now having been restored, river terminal volumes for UAN were also reoffered at levels in line with NOLA barges at $325-$330/t FOB at main terminals in Cincinnati and St. Louis. Meanwhile, on the U.S. East Coast, the price for Russian import volumes rose to $310/mt CFR on account of rising freight costs in absence of much volume trading in March.

With many in the market having filled their tanks in late 2020 already, prompt UAN sales aren't expected to pick up significantly until sidedress demands begin to drain tanks in the coming weeks. This should help support stable pricing in the UAN market, as it remains at a premium to urea in terms of nitrogen content following March's higher offers. We expect UAN prices to be stable in the short term with some firming possible as demand picks up.



Some P&K application activity had begun on the U.S. East Coast by mid-March, but rainfall in the Corn Belt and Southern Plains pushed the start to spring applications later into the last days of March leading up to Easter. As a result, phosphate barge transactions slowed in March ahead of applications, but tight supplies continued to provide support to prices, especially in the U.S. interior.

DAP barges traded at $538-$542/t FOB for prompt shipment from NOLA in late March, up from $518-$530 at the start of the month. MAP changed hands at a lower $564-$575 for late March/first-half April loading, down from $570-$581/t FOB in first-half March. Both would go on to see a large amount of backwardation -- to the tune of $50-$60/t -- between early and late April ship barges, however.

River terminal DAP prices were mostly flat week-over-week to end the month but fell $5 on the high end to $570-$590/t FOB, compared to higher offers of $595 in February.

March also saw the U.S. International Trade Commission make formal its determinations regarding countervailing duties against Moroccan- and Russian-origin phosphates after the petition received a majority affirmative vote earlier in the month. Rates were unchanged after previous adjustments from the Department of Commerce at nearly 20% on Moroccan phosphates and anywhere from 9% to 47% on Russian product depending on the supplier.

U.S. phosphate prices are expected to firm in the short term once P&K applications become more widespread and existing volumes from fall buying are worked through the system. But strong applications in the latter half of 2020 could help relieve some pressure on spring supplies.


The pace of activity in the phosphates market slowed through the second half of March. Against a backdrop of slower demand in India, Chinese DAP prices took a weaker tone, alongside slower phosphate demand in Europe contributing to some softness in March.

A major Indian buyer was negotiating for Saudi Arabian DAP by month's end, but it was unclear whether this meant the start of a wave of significant import demand amid low stocks or more to try and set the much-anticipated next round of government subsidies on phosphates. DAP prices overall ended March at $515/mt CFR, up from $445-$446 in the month prior.

Meanwhile, in Brazil, MAP prices fell to $620-$630/mt CFR on relatively lackluster demand, down $15 from the month's highs but still $30 above price levels in February.

The outlook on global phosphates is stable to firm in the short term, however, with the potential still latent for a good season in India to come as well as European DAP seeing higher prices for those in need of prompt tons.


NOLA granular potash barges are assessed at $310-$320/t FOB on some further softening evident as barge trading waned in March. P&K applications were further delayed by inclement weather in the month despite seeing some headway on the East Coast with on-again-off-again rains sweeping across much of the country. Barge values reflect a $15 decrease month over month ahead of an expected push when the weather is forecast to turn for the better.

Mississippi River terminal volumes are also mostly flat at $350-$365/t FOB on very little movement to speak of, as well as mine prices in Saskatchewan and New Mexico remaining flat at $350/t FOB. Intrepid Potash did, however, announce an increase to its specialty potash product by $20/t.

Potash prices are still expected to rise when applications and fieldwork begin, but values remain stable for the short term. International potash contracts in the meantime are still being settled with major producers having to put extra effort into negotiations after Belarus Potash Company's earlier settlements came in far below market expectations, according to press releases from several other major producers earlier this year.


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