Market and product
Retail Fertilizer Prices Reset Lower
Ammonia prices were mostly steady at the retail level this week, but changes could be coming soon. Warmer weather could restart applications in some areas, and when dealers restock they may be paying higher prices than they did this summer. Wholesale prices are actually dropping, but overall costs remain expensive. Terminal prices last week dropped another $10, after a smaller cut the previous week, reflecting the $27 decline for December on the index used to settle contracts at the Gulf. Still, with terminal prices around $640, growers likely may be lucky in many areas to find our average retail price of $686.
Urea prices dropped $8 on average to $476.75, but new offer sheets on the Plains listed product at $425 to $450, with dealer cuts in the $25 to $35 range from previous levels. Those new lower prices are close to the fair value we project of $430, based on wholesale costs in the U.S., which are actually edging a little higher. The cost at the Gulf was up $3 to $312.50, though the international market was flat after India completed another big deal with China at prices that were lower than its last round of purchases in October. Swaps show only slightly higher prices into March, reflecting adequate supplies and lack of explosive demand.
UAN continues to edge higher, with the slow fall application season increasing interest in the product. The average price for 28% rose $1 to $325, close to our projected fair value of $331. Costs at the Gulf for 32% were $5 higher at $252.50, the highest price since June. Swaps pointto even higher prices this winter, with March contracts another $15 higher.
Phosphates also saw different price trends at the retail and wholesale level. The average price for DAP eased $6 to $558 and dealers updating offer sheets were around $535, close to the projected fair value of $528 base on wholesale costs. Those benchmarks firmed, with the Gulf up $7.50 to $422.50. A Mississippi phosphate company has gone out of business, taking some production capacity off the market, and shipments from North Africa were disrupted by bad weather. Swaps for DAP also look around $15 higher into March.
Potash prices edged $1 higher to $487 at the retail level, with most offer sheets steady, reflecting no change at Midwest terminals. The current wholesale price of $405 suggests retail prices around $467, so there’s potential for prices to come down some in theory. However, sellers are watching production problems in Russia, where one and possibly two large mines were flooded. That could keep prices steady or even higher this spring unless China is successful in avoiding price hikes when it makes a big purchase expected in January.
Source:
