12/23/2024 Mid-Day Fertilizer Market Update
International
- Dear NFL/India, you made us wait several days for this?
- Couple surprises as India urea purchase tender offer information was released
- Keytrade set a decently lower L1 for the west coast, nearly $12 lower than the next lowest value
- Many were left scratching their heads on the “miss”
- The next layer saw just over 500,000 tons offered in a relatively tight price range
- I suppose it is possible that offers will decide to drop their price idea, but it doesn’t look likely today
- Medallion set a substantially lower L1 for the east coast, coming in at a huge $86 lower than the next lowest price
- This appears to have been a typo on the offer submission
- However, it sounds like India is going to hold their feet to the fire and force them to participate
- Practically impossible to imagine them receiving anything more than 50K for the east coast
- So, it looks like a follow up purchase tender announcement will be imminent following the conclusion of this one
- That will certainly help the market get more excited…
- Not that this makes a difference, but does it make sense for India to for Medallion to sell at $299?
- The next lowest offer was $385 or $86 higher
- $86 x 50,000 tons = $4,300,000 differential
- Huge hit for Medallion and huge savings for India…if the market doesn’t firm
- But a follow up tender will put India further into Q1 and further into competition with other global buyers
- There were around 430,000 tons offered w/in $4 of the next lowest offer
- That means if India only secures 50,000 tons and the market firms by more than $10 on their next, they will be “under water” on the decision
- Egypt continued to take advantage of the India situation, selling to a new high of $403
- That is nearing the recent high’s that were set not long ago
- With 2025 looming and supplies looking tighter than normal, seems like this has a better chance of sticking
- Suppose the global urea market will have something to look forward to in order to start 2025
- Paper trades today
- January Middle East Urea @ $362/$362/$362 (down $.5 from Friday’s settlement)
North America
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North America
- Surprising amount of trade this morning as the fertilizer market prepares for 3 days of “standing down”
- I would have figured that most would be taking vacation
- However, I didn’t anticipate India playing out like it has so far
- Sure looks like we will start the New Year on a hot streak
- If we ignore Keytrade’s L1 and instead focus on Fertiglobe’s as the “market price” for west coast (given it is much closer to all other offers):
- $381.50 CFR west coast India equates to roughly $365 Middle East
- $365 Middle East equates to roughly $365 loaded NOLA urea barge
- This morning, December physical NOLA traded $330 while February traded $340
- That is a $35 and $25 discount to replacement
- We are still seeing 2025 crop mixes relatively steady to last forecast…if not slightly bullish corn acres
- The world is entering 2025 relatively tight on supplies given Chinese export flows (or lack of) and continued EU production issues
- We are not in a “worry” period yet…but we will need to start the inflow of imports to meet spring demand
- Tight global supplies + significant NOLA discount to replacement DOES NOT entice imports
- Keep an eye on everything nitrogen…
- Paper trades today
- May NOLA Urea @ $337/$338/$338 (up $1.5 from Friday’s settlement)
- Physical trades today
- December NOLA Urea @ $330
- February NOLA Urea @ $340
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