10/14/2024 Mid-Day Fertilizer Market Update
I learned an important lesson Friday.
When you have T-Mobile for your cell service and also have T-Mobile for your home internet...you have no backups when they have an outage.
My apologies for Friday call issues. That is on me.
International
- RCF appears to have closed the urea purchase tender, securing approximately 567K tons
- As expected, only 50K ton was secured for the west coast
- The rest of the awards were for east coast destinations
- So what is next?
- Highly likely that we will see another purchase tender announcement in the coming weeks
- There should be a big focus on west coast offers/ports/etc.
- Also likely that this next tender will encompass most of the remainder of 2024
- If this tender is successful, we could see a situation where the ending 2024/beginning 2025 story is "sellers are sold out"
- We have seen this be a very comfortable and supportive story in the past for manufacturers
- However, do not lose sight of what a Chinese urea export return would do
- Usually when we think we have the market figured out, something humbles us quickly
- But a lot of the factors are supporting price ideas today
Paper trades today
- None observed
North America
- Grain prices have been under attack this morning
- Dec '24 corn values are down almost 6-cents
- Dec '25 corn values are down 7.5-cents
- This is obviously money directly out of the farmers pocket and should have us slightly concerned (again) about coming fall demand
- Hopefully this is a short term situation and we recover
- Harvest appears to be moving quickly which is a win for fall application
- With crops looking like they will be out of the way, it leaves a wide open window for fertilizer to run
- Now, this can shift quickly if weather turns too cold/wet too early
- However, that currently isn't the case so we remain optimistic
- Sounds like Mosaic production is either back or very close to returning after Hurricane Milton
- They still need to allow their people to get back on their feet at home
- Once that is done, restarts should resume
- Sure, production/supply has been lost and we cannot get that back
- But the worst case scenario did not play out and for that we should be grateful
- I watched a video that showed what would have happened if the storm was only 35 miles north
- Let's just say if it played out, we are discussing a wholly different story this morning
- Last thing to point out. Recently we have talked about NOLA phosphate being "cheap" vs other global buyers
- We have watched DAP values rise on the back of Milton
- NOLA DAP is now in line with Brazil and India in terms of FOB pricing
- NOLA MAP is still a significant premium vs the world as it has been
- We can see NOLA DAP move to a world premium as it has happened before, but this takes a bit of the edge off in terms of upside potential
- Paper trades today
- None observed
- Physical trades today
- Prompt NOLA Urea Physical - $311
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