DTN Fertilizer Outlook

Prices Expected to Remain Stable Going Into Summer

The Tampa ammonia contract rolled over for May at $545 per metric ton (mt) cost and freight (CFR), ending an eight-month period of consecutive rises and an extremely bullish first quarter of 2021 for U.S. ammonia prices. Since the rollover, no U.S. markets are assessed to have risen by Fertecon's reporting, and prices are expected to remain stable to soft going into summer. (Chart courtesy of Fertecon, Agribusiness Intelligence, IHS Markit)

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



In April, the preplant ammonia run had mostly finished in the Southern United States in April, while more northerly portions of the country were seeing good progress. Easter weekend kicked off a heavy few days of corn planting after favorable weather greeted much of the country and wintry conditions seen in February and March became minimal. By month's end, the Great Lakes were said to be finishing their preplant requirements, while the Dakotas were more delayed due to some of the worst drought conditions seen in North Dakota for almost 30 years.

In the last week of the month, Corn Belt ammonia prices remained at a $600-$650 per short ton (t) free-on-board (FOB -- cost without freight) spread, steady from where offers came back after Winter Storm Uri in February but could see some decreases in the coming weeks as the last preplant applications finish. Oklahoma plants, meanwhile, were offering volumes at $575-$600/t FOB, $40 above low prices in March but in line with the prior month's high.

With the Waggaman ammonia plant reported operational once again in the U.S. Gulf, despite some persistent technical woes, domestic ammonia supplies appear to be more secure not only in the Southern states but in the United States as a whole. Truck logistics were said to be becoming more available by mid-April in another sign of softening demand and finishing applications.

Ammonia prices in the United States are expected to remain stable before falling lower with peak spring demand now winding down and balancing global supply conditions following an incredibly firm first quarter 2021.


Global ammonia prices softened in the Western Hemisphere in April but kept a firmer tone in the east.

At the end of April, a price of $545 per metric ton (mt) cost-and-freight (CFR) Tampa was agreed by Yara and Mosaic for May shipments -- a rollover of the price the parties agreed for April.

Black Sea contract prices fell $40 from March highs, to a range of $415-$455/mt CFR after a sale to OCP brought a drastic blow to previous price levels. Rumors about the cause included possible discounts that may have been applied, but none could be substantiated as to what brought the market down so much.

In the Baltic region, prices fell by a smaller amount of less than $5 in April to $466-$467/mt FOB on better supplies in the region leading to less pressure on spot deals. In China and Southeast Asia, prices were overall much firmer, but a lack of reasonable export logistics has kept the region and its strong market somewhat isolated.

With a rollover in the Tampa contract ending the eight-consecutive-month period of increases, a run that included one of the largest single month-over-month increases in the last decade, in the short term, our expectation is for stable to soft price fundamentals to continue to prevail in the west and stable to firm in the east.



April proved to be a volatile month for urea in the U.S. as India tender activity provided push-and-pull effects, which resulted in wide price swings throughout the month. Some weeks saw as much as $50/t spreads between high and low trades for barges loading in the next 30 days.

Urea barge prices at New Orleans, Louisiana, (NOLA) ended April at $360-$392/t FOB, lower from the $365-$405 level seen in the previous month. Loaded barges did reach those $400/t-plus price levels again throughout the month, but April and May barges vacillated between highs in the $390s to lows in the $330s and $320s in the middle of the month. In later weeks, it became known that CF has stepped into the market later in the month as a major buyer of barges as one of many factors contributing to April's volatility.

Meanwhile, urea volumes along major Mississippi River terminals fell to $420-$430/t FOB, a drop of $5-$15 from March highs when prices rose in anticipation of India tendering and before large amounts of Chinese participation put a damper on values by freeing up Russian and Middle Eastern/African producers' volumes for shipment to the U.S.

On the factory side, plant prices at Enid, Oklahoma, fell $40 from March to $420/t, while in Iowa prices at Port Neal also fell to a lesser degree to $440-$450/t, down only $10-$20 on decent sales books.

The outlook for U.S. urea prices is overall firm, considering the time of year being one of the busiest for urea. However, attention must be paid to the results of India's next tender to see how the global supply situation will evolve in the coming weeks, and thus how much urea will be coming to the U.S. in May.


On the global side, the eagerly awaited India tender announcement on April 26 was quick to cause ripples on the supply side of the urea market. Higher prices in Brazil -- which saw prices rise to $355-$375, $50 lower from higher March levels but $35 higher from mid-April -- supported increases in China and Egypt.

Speculation of some lesser participation from Chinese sources late in April contributed to the above-mentioned pockets of firmness, bringing Egyptian urea prices to $350/t FOB and above. These levels are again lower from the previous month's highs near $400/t but higher from weakness in mid-April before the tender announcement. Russian-produced urea remained mostly committed to India and thus saw few changes in prices.

While the India tender announcement had the expected effect of re-energizing the majority of urea benchmarks, positive sentiment had not quite yet translated into substantial traded product at higher values in April, leaving the benefits or consequences of the tender to weigh on the market into May.

From that standpoint forward, the short-term outlook for global urea remains stable, with pockets of supply-side bullishness countered by pressure from higher freight.


UAN in the U.S. did not see too exciting of an April this year, as a late and staggered planting season ensured that only a minority of states would have reached sidedress during the month. Higher price levels over $100 greater than in April of 2020 have also dampened excitement around the value of UAN, compared to 2020 when the product began spring at a big discount to urea.

With the prompt barge market having remained largely illiquid in April, the Fertecon NOLA UAN assessment remained at the $300/t FOB level throughout the month. This price level is to be expected, as it reflects a price of about $325-$330/t FOB, the current market for UAN 32% along major U.S. river terminals and flat from where prices were set after the fallout of Winter Storm Uri in late February to early March.

The other major benchmark price tracked, the U.S. East Coast import price, tipped up slightly at the end of April to $310-$315/mt CFR, reflecting some advanced demand for UAN and raising freight costs for Russian UAN despite slower trade.

In eastern Oklahoma, factory prices were reported slightly firmer at $350-$360/t, $10 higher from the low end earlier in the month of $340.

In the short term, U.S. UAN prices are expected to remain stable ahead of summer fill resets with any price increases limited by some relatively softer fundamentals for urea in comparison on a dollar-per-unit-nitrogen basis and a market seemingly unwilling to fill tanks at current prices.



NOLA DAP barges ended April at $535-$540/t FOB, a few dollars down from March levels as buying slowed on phosphate barges with the wrapping up of preplant applications in the Corn Belt and Southern U.S. MAP, meanwhile, ended at $555-$565, also slightly lower from March on similar fundamentals from DAP.

On the Mississippi River, volumes for DAP and MAP continued to firm on increased fill buying interest and tight supplies even ahead of May's summer fill announcements. Price rose to $595-$635/t FOB DAP and $600-$660 MAP. Cincinnati saw phosphate prices surge at the end of the month in a market that saw more wide-open weather conditions than much of the country in April. Most other terminal locations saw prices $10-$20 below highs seen in Ohio.

Price levels in April remained supported by the short-supply squeeze seen after the U.S. countervailing duties against Moroccan- and Russian-origin phosphates became official last month and world supply lines remain somewhat chaotic.

The short-term outlook for phosphate prices continues to be bullish, as fill demand is high with buyers hoping to take advantage of high crop prices to offset P&K buying now, ahead of fall when many in the market fear prices will be even higher than current levels. Just as well, supply remains low and extremely tight, and especially so on MAP with no firm relief in sight for the short availabilities in the market.


April activity in the phosphate market was centered in Southeastern Asia, with buyers in both India and Pakistan concluding new DAP deals with sellers in North Africa, China and Saudi Arabia. Despite the significant increases seen in phosphate prices since the beginning of the year in India, demand from importers appears to be healthy, and the government is reportedly expecting a 10% rise in fertilizer consumption this year.

DAP prices in India rose to $566/t CFR by the end of the month, much firmer from the price of $515 in March during a time of slower trade. Meanwhile, in Brazil, the last price for MAP of April was $595-$610/t CFR, which is down around $20 from levels in March as activity became subdued and demand slowed by the end of April.

On tight supplies and port operations in India reported unimpeded despite the increasing COVID-19 crisis in the country, we see the global phosphate market as generally stable to firm but with bearish signs in some markets outside of Asia and the U.S.


Before potash fill programs were announced in early May, potash traded largely sideways in the U.S. in April as the bulk of preplant applications were finished and the market awaited fill deals. Some applications remain in the Northern U.S. as corn planting approached 50% completion, according to USDA at the end of April. But much of the market's focus had shifted to summer fill by mid-April as buyers looked to lock in spring needs while crop futures remained strong and volatile.

NOLA granular potash barges ended April assessed at $308-$316/t FOB, slightly down and narrower from the end-of-March price of $310-$320/t FOB. Mississippi River terminal volumes ended the month mostly steady at $345-$365/t FOB, with some markets in the Midsouth having slid down $5 from March lows but other terminals having moved higher within the range as demand migrates from south to north with spring weather.

Mine prices for April remained around $350/t FOB at North American production sites in Saskatchewan and New Mexico before any price adjustments made in May when Mosaic and Nutrien issued fill announcements.

In the short term, potash prices appear firm with producers intending to raise prices on summer fill volumes after the first week of May and Canpotex, Canada's top potash exporter, having reportedly committed all its available sales through September 2021.


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