CHS Hedging Fertilizer Commentary:
Pressure on the front end of the Urea curve continued yesterday in all regions with a NOLA FOB Urea physical barge trading at $342pst and $345pst for December delivery and $345 for January delivery putting those prints $7.5 to $15pst lower than previously assessed respectively. Firm offers at $350pst for November Urea FOB NOLA this morning still dominates the front end with buyers waiting for sellers to come to them as they sit around $340pst for November and most likely will pullback if physical trading continues to trend lower in both the December and January.
Urea Phys: We anticipate continued firm offers at $350 for December and January delivery with bids entertaining $335pst. The 12-week average sits around $352pst. Any opportunity to lock in physical and hedge with futures from these levels all the way down to $320, should be considered a hard look.
Urea Futures: Futures followed physical suit yesterday settling down anywhere from $2.5 to $7.5 between November futures and March futures. Offers should continue to trickle in as Brazil values keep declining.
DAP: Futures activity showed up yesterday printing $515 to $520pst for March. That keeps it in-line with previous settlement and seeing markets for Q1 DAP framed up between $510 to $525pst to start.
UAN: Q4 and Q1 starting the day framed up between $250 to $265pst. Slightly lower from yesterday’s start.
International Mkts: China is now taking around 60 working days for export cargoes of Urea to clear customs vs the previous time frame of 30-45 days. This will add strain to any extra exports of Urea from China to flow to other regions in the globe. They have also set their 2024 fertilizer import quota at 13.65 million metric tons, unchanged from 2023, according to the nation's Ministry of Commerce.