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7/9/2024 End of Day Fertilizer Market Update

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7/9/2024 End of Day Fertilizer Market Update

 
  • Josh Linville
  • Vice President - Fertilizer
  • StoneX Financial Inc. - FCM Division
  • [email protected]

International

  • The India urea purchase tender continues, still no firm conclusion...but

    • Sounds as though they will only secure 600K
    • That might sound bullish, but from this POV it is not
    • It sounds like they are limiting their purchase to 600K
    • They will accept the L1 East Coast and counter enough west coast to reach that target
    • That means in theory, there are around 2M tons that were offered that will be left in the cold
    • Looking at the calendar, it could be very cold for a while
  • Sounds like Egyptian urea production rates continue to improve with gas supplies still returning
    • Not 100%
    • But getting there
  • I am still nervous regarding the global phosphate markets
    • Current inventories continue to "feel" snug
    • Chinese exports continue to be believed low
    • At the same time, demand in India is growing
    • It is really hard to write this knowing full well how over priced phosphate values are
    • But if we see a situation where China is out and India is in, watch out
  • Trades today
    • September Egypt Urea Paper - $350

North America

  • Seems the urea market started to wake up to the realization that the outlook is rough if you want higher prices

    • The morning started with a July loading urea barge trading at $295
    • By the afternoon, $288 traded hands
    • Also saw paper price ideas falling in kind
    • Seems the combo of a poor India outlook and falling grain prices came together
  • That very well could be the story of Southwest Fertilizer Conference next week
    • Grain prices have tumbled to low's not seen in a while
    • Those low values will change how farmers and retailers approach the marketplace
    • Is the market prepared for that change back to what was considered "normal"
  • Also starting to hear that fall NH3 prepay programs started to be rolled out today
    • To say they were proud would be an understatement
    • I do not want to share values just yet (waiting for more to come)
    • However, it sounds as though they are a hefty premium to summer fill programs which were already a premium to last years programs with grains down big
    • NH3, to me, always seems like the easiest fertilizer to wait on purchases
      • All other products, the retailer stores a lot/most of it
      • However, most of the NH3 is resupply in season
      • Chances are, those tons will be there regardless if they are purchased or not
      • Inland storage/production sights do not have a lot of other options
      • The price might be higher, but likely to be there
  • Ultimately, a lot of tough calls out there
  • Paper trades today
    • ​​​​​​​September NOLA Urea Paper - $300 / $303
    • Q4 '24 NOLA Urea Paper - $310 / $303 / $303
    • Q1 '25 NOLA Urea Paper - $310
  • Physical trades today
    • ​​​​​​​Loaded NOLA Urea Physical - $297
    • July NOLA Urea Physical - $295 / $288

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Related tags: Fertilizers

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