International ammonia prices drifted lower through November. Yuzhnyy, FSU, ammonia traded in the $390 to $405 per metric ton fob (free on board -- the buyer pays for transportation of the goods) range early and fell to $340 to $350 late. (All prices in this column are wholesale.) Falling DAP prices have discouraged DAP producers and they look for further decreases in ammonia prices. Industrial demand (acrylonitrile and caprolactam production) in the Far East has been lackluster at best, which is also keeping downward pressure on ammonia prices. Demand for ammonia from DAP producers in India has been steady, but even their ammonia prices went from $450 to $500 cfr (cost and freight) early to $440 to $480 late. North African ammonia producers were having production problems through much of October, but by mid-November most of them had returned to full production. We expect slow demand to keep downward pressure on world ammonia prices in the short term.
Domestic ammonia prices ran flat through the month, trading ex-central Illinois terminals at $540 to $550 early and drifting down to $540 late. Ammonia producers are not offering spring prepay programs at present due to the current farmer/dealer malaise affecting demand for ammonia and all other fertilizers. Ammonia prices have not fallen to the extent of other N products, and we expect much lower domestic ammonia prices could be on the way.
World urea prices staggered lower through November. Prilled prices at Yuzhnyy traded at $257 to $260 mt early and fell to $235 to $238 late. Prices for Middle East granular fell from $248 to $250 mt early to $215 to $228 late. Late in the month India ran a tender that attracted offerings totaling 3.2 mmt. From the tender, India sourced 1.3 mm tons at $245 cfr with most of the product coming from China but also 200,000t from Middle East suppliers. The sale did clear out a good deal of Chinese tonnage at port and the tonnage from Middle East producers relieved pressure on traders who otherwise may have had to look at taking tons to the U.S. or Brazil. China saw netbacks erode at the given price, creating a negative return for some producers. It could be that the steady march of tons to ports might slow up with profits being eroded. In addition, India may not return to market for some time. Egyptian export urea prices firmed a little at month's end with small sales crossing at $258 to $265 mt fob. However, traders were more pessimistic about January and ready to short Egyptian tons at $255 fob. Pressure on Egyptian prices adds pressure to Yuzhnyy, as it provides an alternative supplier for Turkey. There has been limited interest in Turkey to test the market. Baltic urea price values are also under pressure. We look for world urea prices to run flat with an undertone of weakness in the short term.
Domestic urea prices at NOLA had a small rally late in the month as early in the last week, prices crawled off their lows in the high $210s, running up to the low $230s. Later in the week, however, NOLA granular barge prices slipped back into the mid-high $220s. We credit the rally to some larger wholesalers coming into the market to layer in some of their spring needs, even though farmer/dealer interest is presently quite slow. As some wholesalers pointed out, we are essentially 60 days away from the beginning of wheat topdress and large buyers cannot wait until the very last minute and expect to have product in place. We look for domestic urea prices to flounder in the present range for the short term.
Domestic UAN prices drifted slightly lower in November with NOLA UAN barges trading at $185/32% ston early and crossing at $180 late. Lack of demand and pressure from long urea supplies are keeping UAN prices under pressure. Some wholesalers at month's end received calls from producers/traders begging them to take product at a significant discount. We look for further deterioration in domestic UAN prices in the short term.
World phosphate prices moved lower through November, driven by long supplies and weak demand. Tampa export DAP prices moved from $430 to $435 mt early down to $400 to $408 late. Export prices from non U.S. exporters (Morocco, Tunisia, FSU, Saudi Arabia) fell an average of $20 to $30 mt through the month. However, the price decreases continue to do little to tempt many end users back into the market and are leaving most producers and some traders who have gone long in recent weeks still to find a home for their late November and December positions. Most buyers around the globe have no immediate requirement of product for seasonal reasons and see little upside to the market. We believe it seems likely world DAP/prices could keep falling in the short term.
NOLA DAP barge prices also fell through the month, declining from $415 to $420 ston early to $400 to $408 late. Domestic farmer/dealer interest in new DAP/MAP purchasing remains seasonally slow. Supplies remain long and domestic prices are still under downward pressure. We look for domestic DAP prices to keep moving lower in the short term.
Domestic potash prices moved lower through the month, with NOLA barges selling at $270 to $275 early and units crossing at $260 to $265 late. Prices at interior terminals continued soft as demand stayed very slow. Producers were offering product on consignment through the month; consignment never bodes well for higher prices. We look for potash prices to keep moving lower in the short term.
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