Morning Highlights
Morning Highlights

Fertilizer Consulting Commentary

Peter Haralambaks

Nov 5, 2023

CHS Hedging Fertilizer Commentary:                                            Fertilizer: 877-545-0006  

A slow drip lower continues to be the theme within the Fertilizer sector as gas supplies to Egyptian producers have been restored with anticipation of production to restart over the next day or two coupled with the Indian tender in our rear view mirror and neither Brazilian or American buyers showing any desire to book large volumes on a spot basis quite yet. We continue to digest earnings reports by the majors with CF Industries' granular urea production volumes for Q3 down by around 106,000 product tons in Q3 2023 vs 2022, standing at 1.081m. tons and Nutrien missing quarterly profits estimates as potash prices plummet with shipments from Belarus and Russia resuming this year as a major piece of the export puzzle fell back into place. Potash prices averaged $250pt this past reported quarter vs $633pt a year earlier.

Urea Phys: After news of gas supply being restored and international activity slowed, barge business concluded again at $355pst and then again trading at $350pst for November and December. Physical NOLA Urea is framed up at $345 to $360 to start the day. A 3-month rolling average sits at $352.62pst.

Urea Futures: Pressure on the front end of the curve continues to provide a slight carry in the Urea markets as futures gave up another $3.50pst in the December and almost $6.00pst for Q1. November Urea futures are trading 18% below their 5yr seasonal average currently. A 3-month average for Urea futures sits at $362.11pst.

DAP: Continued to have quiet support with no substantial volumes shifting prices firmly on either side of $530pst FOB NOLA.  There was some movement in regard to U.S. countervailing duties after an ongoing review, the U.S. Department of Commerce has cut the current prevailing duty against OCP to 2.12% from 19.97% and raised the current prevailing duty against Phosagro from 9.2% to 28.5%. The drop for OCP (Morocco) should pave the way for a return to U.S. DAP/MAP imports from Morocco in 2024.

UAN: Stable markets with bids and offers on the physical side being exchanged between $255 and $260pst. Ohio river terminals remain around the $300pst, including Cinncinnati.

International Mkts: Continue to watch any developments with gas supply and with any additional China cargoes bound for India.