01/24/2025 Mid-Day Fertilizer Market Update
International
- Still no update regarding the India tender
- RCF is just being RCF
- Hopefully, we get more news over the weekend/Monday
- Until then, the market has stalled
- A lot of the factors we have been discussing for global urea have been bullish, leading us to search for negative/bearish stories
- China has popped up on a report
- Inventory Situation
• Factory Inventory:
Domestic urea factory inventory stands at approximately 1.6295 million tons, the highest level for the same period in history. It has decreased by 63,200 tons compared to the previous week, but inventory has increased by 157,700 tons over the past month. High inventory levels are exerting downward pressure on urea prices, with significant challenges in reducing inventory.
• Warehouse Inventory:
The warehouse inventory of urea is approximately 9,075 lots, which is relatively high for the same period in history. Over the past week, inventory has increased by 1,918 lots. The increase in warehouse inventory indicates a relatively sufficient market supply, which is putting some pressure on the prices of futures contracts. - So, this begs the question of how the government will react
- Those stockpiles have been growing…yet nothing has changed
- Will they take pity on manufacturers/exports and start loosening restrictions?
- Will they keep their foot on the neck of the market as it keeps domestic values low?
- Unfortunately, we do not know yet.
- Still in a reactive state of mind.
- Also have heard a couple speculating the Iranian production could come back in February
- That remains anyone’s guess given the state of their country
- However, it seems like Iran production going offline helped to trigger the market
- Even if the global S&D is tight, would their return change the emotion of the market?
- Otherwise, we continue to sit
- Paper trades today
- No trades observed
North America
- NOLA market excessively quiet to end the week…which shouldn’t come as a surprise when looking at the calendar
- However, that calendar is also pointing to fireworks coming
- In only 36 days, it will be March
- In only 67 days, it will be April and planting will start
- It will not be long now…and it still feels like urea has a lot of work to do
- The longer it waits, the more of a reaction we should see in relation to global values
- Potash remains excessively well priced vs corn values
- I still think that should be the biggest conversation with farmers today
- Huge value opportunity for them to secure
- Huge value opportunity for them to build soil levels (if it will hold it)
- Huge opportunity to do some education during a good period and have them tuned for when other opportunities pop up
- It removes the price fight and introduces a value
- Paper trades today
- No trades observed
- Physical trades today
- No trades observed
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