6/5/2024 Mid-Day Fertilizer Market Update
International
- So if the world urea market started its hot take on the back of Egypt, we should probably keep a close eye for the other direction, right?
- Well, the first step might have been taken today
- Obviously the recent story has been natural gas supply restrictions in Egypt affecting nitrogen production
- First it was a 20% reduction, and then it got worse
- Well, this morning it sounds as though flows are set to return which is a positive for production rates
- No word on how much would be available but the fact it is returning is a plus for buyers
- Rest of the world is sure jumping on the bullish bandwagon
- Brazil urea values jumped to $350 on the futures side
- Middle East continues to be discussed in the $330's
- Just have to wonder how long buyers will be willing to engage this early...
- Paper trades today
- August CFR Brazil Urea Paper - $350 / $350
North America
- Remember how we recently discussed how cheap NOLA looked vs the rest of the world and it was something that needed to be watched
- Looks like other folks joined that party
- NOLA urea values jumped hard this morning on active trade across physical and paper
- Full details are below but had been wondering just how much longer the spread could grow
- We are part of the world market whether we like it or not
- On another note, I talk about this from an educational POV rather than a "I told you so" POV
- At its lowest, we had the opportunity to secure the urea/corn ratio at 55
- Summer month urea had dove to $275
- December '25 corn had been trading in the $4.90's
- Historically speaking, a 55'ish value was very good
- Well, that ratio has blown up
- Summer month urea is now $300 (August trading multiple times)
- December '24 corn has fallen to $4.74
- That puts the current ratio at 63
- At the end of the day, it is not the end of the world
- 63 is not terrible when we look at August/September
- It is more that a much better value was there
- Sometimes it isn't about the flat price...
- At its lowest, we had the opportunity to secure the urea/corn ratio at 55
Paper trades today
- July NOLA Urea Paper - $292 / $298 / $295 / $295 / $295 / $294 / $295
- August NOLA Urea Paper - $292 / $300 / $300 / $300
- September NOLA Urea Paper - $292
- Q3 '24 NOLA Urea Paper - $290 / $295
Physical trades today
- Loaded NOLA Urea Physical - $302 (traded $300 yesterday)
- July NOLA Urea Physical - $289 / $292 / $293 (traded $288 last yesterday)
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