StoneX logo

Farmer Fertilizer Focus - Potash

By: Josh Linville, Vice President- Fertilizer

Banner Fertilizer
October '22 POTASH
 
Josh Linville
Vice President - Fertilizer
NOLA potash price graph
Please remember that this is looking at the cost of one short ton of potash sitting in a barge at NOLA (New Orleans, Louisiana).  Your cost is not going to be the same.  This should be looked at more in regards to the price direction rather than the actual pricing.
image 51094
What everyone wants to know first, what do we think will happen going forward
Another month of very little change in the potash markets.  We believe Canada is much closer (if not there already) to having capacity ramped up to replace what was lost.  There are also a lot of questions on what demand will look like this fertilizer year with farmers looking to cut costs and potash being a natural fit.
The price trend continues to be our friend.  With questions on increasing supplies and serious questions about demand this fall/spring, seems potash values are destined to continue falling.
That said, keep an eye on Black Swan events.  If grains start shooting higher, that could support potash values.  If Russia locks down exports, that could support potash values.  Worse, if the Mississippi River water levels continue to drop and cause barge traffic to cease, we could see NOLA prices drop but inland prices jump big as the cheapest logistical chain is cut.
Lastly, demand is going to be big regardless.  We have revised our models to use 93M acres of corn (originally 90M and then 91M).  
Long story short, seems that prices are destined to trend lower unless something breaks it out of its cycle but if the past 2+ years have taught us anything, it is to expect the unexpected...
Should you lock in fall '22/spring '23 potash needs today?
When it comes to fall season, YOU HAVE LESS THAN A MONTH BEFORE APPLICATION STARTS.  If you are going to apply this fall but haven't locked up anything, I would STRONGLY suggest at least having a conversation with your supplier about your plans.
Retailers are just as scared of buying potash and then watching values fall.  We can no longer assume that we can show up in the office on November 1 and expect the product to be waiting on us.  There is simply too much risk in the marketplace.  This is especially true when we are living thru times that threaten rail strikes and major river closures.  
If you are going to apply this fall, I would suggest stepping forward in some capacity.  
For spring needs, seems that time is on our side and the trend is our friend.  That trend has been lower since April.  
However, remember that things change and can change quickly.  If you have an opportunity to lock up your potash, sell your grain and can secure a profit you are happy with, don't lose sleep on the trend.  With the volatility we see in today's world, if our worst decision is profitable, I'll take that.
What has happened in the last 30 days?
Lithuania STILL blocking Belarus shipments
Another monthly report, another copy and paste event!
For those new to this newsletter, the lack of Belarusian exports has been a major event for global potash markets.  Back in February, the Lithuanian government imposed a blockade of any Belarusian products.  The reason why this was so important and detrimental to Belarus potash is that Belarus is landlocked.  In the past, most of their material either went south (Ukraine) or north (Lithuania) and out to the sea.  
Belarus has helped Russia in its invasion of Ukraine.  That means I have a better chance of calling the markets correctly than Belarus does of Ukraine allowing them to ship product thru their country!!  It also seems there is little chance that Lithuania is going to reverse course and allow shipment in the short term.  Product does not naturally flow east/west.  To the west is Poland which is another country unhappy with Belarus's role in the invasion.  To the east is Russia.  There continue to be reports of infrastructure being developed to increase shipments...but that will take a lot of time.
For now, the potash world continues to lose one of its top 3 exporters.
image 51100
Russia exports flowing with little to no issues
This is the big event of 2022 that I missed.  When Russia invaded Ukraine, I really thought we would see the entire world stop doing business with Russia.  I mean, when McDonald's and Starbucks pull out, you know it is serious.
Like other fertilizers, potash has continued to flow with countries eager to get their hands on product.  As the graph below shows, exports of potash are very near normal.  Not only that, we are seeing substantial increases in shipments to countries like Brazil (chart also below) who are valuing cheap and guaranteed supplies to that of moral approaches.
Whether Russian material gets exported to "normal" locations or goes to "new" locations, it doesn't matter to the global S&D.  Those supplies are there when many (again, myself included) thought they would be near zero.  This means that approximately 20% of global exports are back on the table.
 image 51107
image 51108
Fall '21/spring '22 demand was down.  Will fall '22/spring '23 be down again?
This is my biggest question today:  how much will potash demand be down this growing cycle?
Let's face it, potash is one of the first fertilizer inputs to be cut when costs get high.  While many potash manufacturers tried to downplay the results, potash demand was down big last cycle.  The question now is can that occur for a 2nd year in a row?
Unless grains start to climb substantially, we tend toward yes demand will be lower again.  That said, you will be that final answer and that answer will not come until this winter at the earliest.
Where are current values in relation to the past
For potash, we use NOLA/New Orleans Louisiana as our base point as it is the easiest spot to track.
  • Vs 30 days ago - -10% or approximately $65 lower
  • Vs 90 days ago - -24% or approximately $180 lower
  • Vs 6 months ago - -31% or approximately $261 lower
  • Vs 1 year ago - -14% or approximately $90 lower
Bull/Bear Factors
Because no market is ever guaranteed to go higher/lower, we try to consider the factors that can sway values so that we are able to act when they occur rather than react.
Bullish Factors
  • Belarus remains cut off from the world – sorry, I know I keep repeating this point but it is still prevalent.  As long as Belarus remains cut from the world, we are losing approximately 20% of our typical potash exports in a given year.  With relations not improving between Belarus/Russia vs the rest of the world, this seems like a slam dunk going forward.
  • Improving grain values - this affects overall demand.  Right now, there are some questions as to what application rates will be.  That question may get answered if we start seeing grain prices skyrocket due to poor harvest results.  Small percentage changes of really big numbers are still big numbers.
  • Strong '23 demand – as mentioned before, our outlook to 2023 crop mixes continue to point to higher corn acres which will mean higher demand.  If this trend continues, even with application rate cuts, the gains could outweigh the losses.
Bearish Factors
  • Farmers reduce application rates/fall applies wait for spring – most of the time, demand tells the story and right now, demand doesn't seem to be in a hurry.  While grain values are solid, fertilizer prices are much higher in relation.  That means farmers are looking to cut costs wherever possible.  We could see the overall application rate down again this year.  We could see fall applicators wait until spring in hopes of lower prices still.  In each of these, demand is talking.
  • Lithuania changes its mind – do I expect this scenario to play out?  Not even a little but if the past 2 years have taught me anything, it is that anything is possible.  If we were to open the news tomorrow morning to reports that Lithuania has started allowing potash shipments, you can imagine what would happen to global prices.  20% of global exports returning overnight would be enormous...ly pressuring potash values down!!
  • Ramped up production continues to be expected  - Canada has tons that are coming online to offset losses.  Russia has projects that are highly anticipated.  Eventually Belarus will find its way.  When these tons all come to the market, supply will likely outweigh demand...and that usually forces price ideas lower.
Where are the current potash/grain ratio values today?
We believe that only looking at the flat price of either grains or fertilizer can be misleading:
  • Only selling grain can hurt you if fertilizer prices rise substantially
  • Only buying fertilizer can hurt you if grain prices fall
We look at the ratio "value" to get a better indication of where we are or how many bushels of X does it take to pay for 1 ton of fertilizer.
Would you rather:
  • Spend 120 bushels to pay for 1 ton of potash
  • Spend 60 bushels to pay for 1 ton of potash
When we compare the current ratio value against recent years, we start to see if we are high or low.
YOUR VALUES WILL LOOK DIFFERENT
This graph looks at the NOLA potash price vs the flat grain price. There are no logistics on either product. Your location will look different due to fertilizer logistical costs, grain basis, etc.
image 51112
image 51113
image 51114
image 51115
image 51116
image 51117
image 51118
image 51119
image 51120
Josh Linville’s focal points

I'm changing this going forward simply because I was struggling with what I should put here.  Typically, I fill it with general statements that a lot of times you all do not need.

When I look at markets, I try to find the one/couple points that are most important to me that tell the story.  That is what I will start doing on this section:

  • Lithuania/Belarus - our expectation is that Lithuania will continue to block Belarus shipments for the foreseeable future.  Even if Russia were to pull out from Ukraine, Belarus will still be viewed unfavorably without a regime change.  That means we lose one of the most important exporters.  However, things can change quickly.
  • Overall demand - not only overall demand but when does that demand come.  That will be a big question going forward.  Will overall application rates drop again?  Will they rise if grain prices rally?  Will farmers skip fall applications in lieu of spring in hopes that values continue to deteriorate?  Demand will have the last word.  It always does.
 
 
  • Fertilizers

This material should be construed as the solicitation of an account, order, and/or services and represents the opinions and viewpoints of the individual authors or presenters. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers.


The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.


The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.


References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.


StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.


StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.


This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.


StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).


SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.


StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism.


StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.


StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.


StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.


Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.


The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.


© 2026 StoneX Group Inc. All Rights Reserved.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.