The intention of the below graphs are not to use to say "my price should be X based on this graph". These prices are derived from an FOB price point average. The intent is to show major global price movement trends. Your values will likely have significant basis difference (similar to your local grain price being different than the traded market price).
This graph is labeled as MT in USD currency.
While the fertilizer futures market is far from as liquid as its grain counterparts, it is still active and gives us an insight into what the market is thinking.
Please note that the values below can and will change daily. This is merely a look at where they are as of writing:
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NOLA/New Orleans, Louisiana
Number 3 global importer in 2022
Price comparisons
Vs 30 days ago - +16% or approximately $55 higher
Vs 90 days ago - +38% or approximately $110 higher
Vs 6 months ago - +18% or approximately $60 higher
Vs 1 year ago - +27% or approximately $85 higher
U.S. Midwest Average
Vs 30 days ago - +12% or approximately $50 higher
Vs 90 days ago - +6% or approximately $27 higher
Vs 6 months ago - -1% or approximately $3 lower
Vs 1 year ago - +19% or approximately $73 higher
U.S. Southern Plains Average
Vs 30 days ago - +12% or approximately $50 higher
Vs 90 days ago - +26% or approximately $93 higher
Vs 6 months ago - +6% or approximately $25 higher
Vs 1 year ago - +14% or approximately $58 higher
U.S. Northern Plains Average
Vs 30 days ago - +9% or approximately $38 higher
Vs 90 days ago - +6% or approximately $25 higher
Vs 6 months ago - +11% or approximately $45 higher
Vs 1 year ago - +16% or approximately $64 higher
Middle East
Number 1 exporter (as a region, not as individual nations)
Vs 30 days ago - unchanged vs last month
Vs 90 days ago - +14% or approximately $48 higher
Vs 6 months ago - -1% or approximately $5 lower
Vs 1 year ago - +12% or approximately $40 higher
Egypt
Number 4 global exporter in 2022
Price comparisons
Vs 30 days ago - -5% or approximately $20 lower
Vs 90 days ago - +9% or approximately $32 higher
Vs 6 months ago - -4% or approximately $15 lower
Vs 1 year ago - -4% or approximately $15 lower
Black Sea
Number 1 global exporter in 2022
Price comparisons
Vs 30 days ago - +5% or approximately $15 higher
Vs 90 days ago - +11% or approximately $35 higher
Vs 6 months ago - +1% or approximately $5 higher
Vs 1 year ago - +9% or approximately $28 higher
China
Number 9 global exporter in 2022
Price comparisons
Vs 30 days ago - -3% or approximately $10 lower
Vs 90 days ago - -8% or approximately $30 lower
Vs 6 months ago - -9% or approximately $35 lower
Vs 1 year ago - -14% or approximately $57 lower
Brazil
Number 2 global importer in 2022
Price comparisons
Vs 30 days ago - +1% or approximately $5 higher
Vs 90 days ago - +22% or approximately $70 higher
Vs 6 months ago - +5% or approximately $20 higher
Vs 1 year ago - +11% or approximately $38 higher
- Middle East tensions - I've talked about this many times before so long story short, Red Sea attacks are irritating but ships can take longer/charge more to go south. If Iran enters the fray and shuts down the Persian Gulf, upside bets are off.
- Russia acting up again - while it seems very unlikely, the possibility of Russia acting up to the point that sanctions start to include fertilizer is not zero. If we suddenly see NATO friendly countries sanction Russian fertilizer, likely that product starts targeting Brazil/India/etc. The countries that place the sanctions will pay the price.
- North America tight inventories at spring start - things are tight right now. Imports thru December were not as high as we had hoped for and there are many signs showing that Feb/Mar may be lower than we like (we expect a healthy January). With spring starting early, that is putting the market on edge and causing prices to go higher.
- Europe outlook improving - global nitrogen values are rising. The cost of production in Europe is falling. If this continues, the remaining offline plants could restart which would push tons back to the world market. More supply + unchanged demand = bearish tint on the market.
- Grain prices falling, putting corn acres in danger - we are continuing to use 92.1M acres of corn this year. Last year, that number jumped to over 94M. However, last year corn prices didn't fall from $5.10 - $5.25 to a current $4.45 - $4.60. Lot of farmers/acres struggling with income outlooks for the year. If it continues to be painful, we could lose those acres to something else, taking nitrogen demand with it.
- Summer reset will be looming - it is a dangerous game the distributors are going to be playing. Hold onto your product long enough and likely make a bigger profit. Hold onto your product too long, risk missing demand and then having to carry that product into the summer. That typical low price reset summer...
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 135 bushels to pay for 1 ton of urea
- Spend 55 bushels to pay for 1 ton of urea
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 urea 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.
- Red Sea/Persian Gulf tensions - to be up front, this situation looks like it is settling down. Yes, the last vessel I saw attacked was a fertilizer vessel originating from Saudi Arabia, but recent strikes and defensive measures seem to be working. Still, if the Red Sea attacks resume/continue, it will force more vessels south adding time and cost to the shipping lane. If we suddenly see Iran enter the fray and start attacking the Persian Gulf, I literally do not know how high of a price to put on urea. That channel is that important.
- Chinese export programs - we are finally seeing first steps that the Chinese government will allow urea exports to resume!! It is going to take time. This is not an immediate impact situation and likely impacts the summer more than the spring. Still, their return is very good news for global buyers.
- Russia - so Russia is back in the news and the urea market quickly tried to say that they thought urea exports would be sanctioned. Personally, I highly doubt it but I cannot guarantee it. My thought is if we did not sanction them for invading a country resulting in hundreds of thousands of lives lost, why would we cross that threshold due to a political assassination? Not saying that life is not worthy. Not at all. Just putting it into context. If we DID see sanctions placed against Russia, I think they would find homes around the world but the countries that placed sanctions would suffer. Again, low likelihood.
- Nearby supplies vs summer resets - with spring either quickly approaching or already here, the nearby S&D means much more than global movements. Here in N.A., we are tight which is why we have seen values marching higher of late. We are trying to call on more last minute imports. However, the market is also going to keep a very close eye on the summer for fear of carrying product over and taking a huge price hickey. It is a balancing act.
- Grain values - I will continue to focus on corn, though it appears there are not many grains who have not felt recent bearishness. Even if urea values had not moved, the fact that corn has given up so much value makes urea look worse. The lower grain goes, the harder it is for farmers. If it goes low enough, we could see switching away from nitrogen intensive crops in favor of things like beans. That would hit the market like a ton of bricks.
StoneX Ratio Calculation
The ratio calculation is derived from Bloomberg historical grains values as well as fertilizer values from StoneX, NPKFAS, and Argus.
The calculation is simply dividing the fertilizer price by each grain price.
All data was sourced from StoneX unless otherwise noted.
