01/02/2025 Mid-Day Fertilizer Market Update
International
- While we do not have official tallies, it looks like India is going to fall FAR from their 1.5M ton urea purchase goal
- The west coast sounds like it will be two offers playing a part
- One is Keytrade who set the L1 with a 53K ton offer
- The other I believe is Fertiglobe with a 90K ton offer
- The east coast, as expected, has seen every other offer above Medallion’s L1 value of $299 CFR turn down negotiations
- Also hearing that NFL might have have their worst-case scenario
- If they had allowed Medallion to fix their value, likely they could have secured a few hundred thousand tons
- Instead, sounds like the change is not allowed
- Now, the rumor is that Medallion will not supply the tons which means that India will not get any tons or the incredibly cheap vessel
- Again, none of this is confirmed. Still speculated…but sounding pretty firm
- The west coast sounds like it will be two offers playing a part
- To make matters worse, hearing reports that Indian urea demand in December was huge
- If true, this puts even more pressure on India to announce a follow-up tender
- Certainly will have offers/manufacturers/long positions smelling blood in the water
- Paper trades today
- No trades observed today
North America
- NOLA urea market needs to be watching global urea price trends very closely
- NOLA urea remains a discount to world replacement
- Global supplies continue to look tight from my perspective
- We have a lot of tons that need imported to meet our demand this spring
- Hard to see adequate imports coming if we are discounted in a tightly supplied marketplace
- If global values remained steady and we had to do the work, you could see NOLA jump $50
- We are currently around $25 discount to M.E. replacement
- Moving to a $25 premium (well within normal in recent years) makes that $50 not seem so large
- Again, that assumes that global values do not move higher on the back of India/other world demand
- Also, watch this cold system moving across the Midwest/U.S.
- Fortunately, it looks like some of the worst low temps for the south are being improved
- It looked like even as far as mid/south Florida was set to see low’s in the teens/20’s
- Still, it doesn’t mean the danger is gone
- If we see the cold set in for the south, their natural gas demand will skyrocket to stay warm
- That demand jump should see natural gas futures rise significantly (as it has in the past)
- We have seen this in the recent past where nitrogen manufacturers slow/stop production to sell their gas futures at a much higher profit
- That decision comes at the cost of less nitrogen supplies that were expected
- Again, the forecast is improving…but it points to a very real danger
- Spring isn’t that far away
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- Paper trades today
- No trades observed today
- Physical trades today
- January NOLA Urea at $330 (down $1 from Tuesday's trade)
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