02/10/2025 Mid-Day Fertilizer Market Update
International
- ICIS reporting that a fresh urea vessel has been sold out of the Middle East
- March shipment
- “High $430’s” fob price
- Yet another indication of a continued bullish marketplace that is struggling with supplies
- Lot of paper activity as you will see below between AG and Egypt
- Egypt sees February hit a fresh recent high of $460
- Hard to believe that $500 is no longer out of the question
- If rumored gas supply issues were to play out, seems plausible
- Middle East values reach a fresh recent high of $421
- Still a discount when compared against the physical reported sale
- But still driving higher
- Egypt sees February hit a fresh recent high of $460
- As always, lot of bullishness out there…but still feels like the knees can be taken out with China
- Fundamentally, even if China were reported to be returning, I’m not sure how much it would make a difference
- It isn’t as though they can export millions of tons on day 1
- However, their mere presence can change the market
- Their stockpiles continue to be discussed at record levels leaving the market wondering what is next?
- Will they just keep building stockpiles?
- Will they lower production rates?
- Will they allow exports?
- Fundamentally, even if China were reported to be returning, I’m not sure how much it would make a difference
- Also, for those of you trading physical internationally, be weary if China does start exporting
- Think about some of the product quality issues in the past for normal product
- Now, think about Chinese product that has been sitting in storage for a long time
- I’m not saying there will absolutely be issues
- However, there is a reason that Chinese products are typically discounted…and urea doesn’t store well normally
- Paper trades today
- March Brazil Urea at $417 (up $3 from yesterday’s settlement)
- March AG Urea at $425 (up $9 from yesterday’s settlement)
- July Brazil Urea at $385 (up $10 from yesterday’s settlement)
North America
- Urea price ideas are jumping once again this morning with March trading at $417
- That is a huge number, but is still a discount
- Upper $430’s (let’s use $437.50) equates to roughly $430 loaded NOLA urea barge
- So, NOLA is STILL trading $10 - $15 less than replacement
- Put yourself in the shoes of an international trader/manufacturer
- Why would you send extra product to N.A. today?
- Global supplies are tight
- You control more of negotiations as a result
- Several large buyers stacked up needing product
- If N.A. values are less than other global options, why send it? You can make more elsewhere.
- Time is getting thin on imports…
- Phosphate finally saw the price bump we had been watching for late last week
- Corn acres rising means more demand
- Import/export flows have not helped N.A. supplies
- Continue to believe that N.A. operating rates are still poor vs “normal”
- We are practically on an island at this point with it getting too late to call on additional imports to meet demand
- Basically, what we have is what we have
- Potash prices have been firming since the tariff fears from a week + ago
- I think this is more manufactures taking advantage of a stressful situation
- I have heard folks say it is “because of the tariffs”
- That would hold water…if contracts didn’t basically state that the buyer would pay for any tariffs incurred on the export
- You cannot push the flat price higher AND force the buyer to pay the tariff with the explanation that “it is tariff’s”
- This is a situation where the supply side is taking advantage of the confusion and turmoil
- However, no one can say they didn’t get the opportunity
- The price of potash had been historically cheap and extremely cheap vs grains
- The market was begging for demand
- Paper trades today
- March NOLA Urea at $415 (up $2.5 from Friday’s settlement)
- Physical trades today
- February NOLA Urea at $410 (up $6 from Friday’s trade)
- March NOLA Urea at $417 (up $17 from Thursday’s trade)
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