Upper Midwest Region Market Update Urea Ammonium

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Upper Midwest Region Market Update Urea Ammonium Regional Upper Midwest Region Market Update The first barges arrived in St. Paul last weekend and a steady stream is expected in the weeks ahead. The Winona terminal is also getting regular barges and supplies have been fairly constant. Demand for P and K has been strong so far. It has been a busy week for ammonia application in Illinois and Iowa, with some application getting underway in southern Minnesota, as well. Supplies are tight, with cash tons being hard to find. Many northern locations are already on allocation. Resupply of most products won’t be happening fast enough this spring, due to continued logistical challenges with both rail and barge. Regional pricing remains stable on most products. Supplies of 10-34-0 are also limited for new orders. Urea Price outlook: Strength for readily available tons Domestic market: Last week brought good barge movement up the river, with those tons garnering a premium. The Nola barge market has begun to slip, though. Import vessels continue to arrive in the Gulf, but with field work delayed in many parts of the country this spring, demand will match up with late-arriving supply better than originally expected. Upriver and inland prices are holding, though, with strong demand. Global factors: Prices of Egyptian urea temporarily moved higher last week as traders caught short on sales into Europe. But generally, international pricing has softened, and Russian and Ukrainian producers are taking down production lines for maintenance in the coming weeks. Chinese urea exports for Q1 of this year reached 1.96 million mt, the second-highest level for that time period behind 2008. Main markets were India (409,000 mt), United States (400,000 mt), Bangladesh (253,000 mt), Pakistan (197,000 mt), Mexico (98,000 mt) and South Korea (98,000 mt). Ammonium Sulfate Price outlook: Firm to higher Domestic market: Shipments from manufacturers continue to be slow and supplies are currently very tight. Due to rail logistics, it will be a push to get all of the purchased product delivered in time this spring. UAN Price outlook: Firm in the short term Domestic market: Current demand remains limited, but last week’s temporary shutdown of the CF Woodward plant due to mechanical problems could tighten supplies in the coming weeks. The company estimates the plant could be off-line up to eight weeks, which would take away a projected 130,000 st of UAN-32% just before the biggest demand hits. Forward demand is greatest for early May tons, but those will quickly disappear as the rail car capacity gets maxed out. Global factors: Several UAN producers are temporarily taking down production lines for annual maintenance in the coming weeks, including those in Lithuania and Romania. Ammonia Price outlook: Firm to higher Domestic market: Supplies are tight as growers in more parts of the northern cornbelt take to the fields and more application gets underway this week. Because of the condensed season, resupply is a major issue. In Illinois and Iowa, terminal lines are already getting long and cash tons are hard to find. Ammonia is now on allocation at several locations in the eastern cornbelt, and is expected to soon go on allocation in Indiana and Iowa. Global factors: Demand from India and the Far East remains weak. Black Sea supplies are uncertain, due to what are being called maintenance turnarounds by producers there, which could turn into longer production shutdowns, depending on political developments. Phosphates Price outlook: Stable to slightly lower Domestic market: The Nola DAP barge price had been sliding lower last week, but barges farther up on the river are fetching a $5-$10/st premium. Nola MAP barges are priced $5-$10/st higher than DAP. That two-tier pricing is expected to become more pronounced in the weeks ahead. Global factors: The international market remains soft. The next major buying is expected to come from India, where year-to-date phosphate purchases are significantly behind last year’s pace. That country’s 2013-2014 fertilizer year imports thus far total 3.261 million tons, 43 percent lower than the 2012-2013 fertilizer year. Potash Price outlook: Firm Domestic market: Supplies remain tight in some areas but are improving in others. Producers are still behind in shipments due to rail delays and potash barges are very limited. Supplies should begin to loosen up next month. Global factors: Canada’s Canpotex has signed a $40-million contract to supply Bangladesh with potash in the coming year. Big week for ammonia in the eastern Corn Belt The soil has finally warmed and dried enough to allow farmers in many parts of Indiana, Michigan and Ohio to apply anhydrous ammonia, and last week was a big week for product movement. One Indiana terminal had their biggest day ever earlier last week, loading a record number of trucks. Supplies have generally been holding up so far, but if the weather stays dry and application can continue into this week, we’re likely to see allocations go into effect at many locations. The possibility of getting all prepay tons applied improves with every dry day. My colleagues in the Midwest are already struggling to find adequate supplies, and report having enough to cover all the prepay tons but are finding it difficult to locate many cash tons. In northern Illinois, for example, any product remaining at terminals is needed to meet prepay obligations. Earlier this week some ammonia was actually trucked down from Pine Bend, Minn. But with ammonia application starting in southern Minnesota this week and demand expected to increase toward the north over the next week or two, excess tons are not likely to be found anywhere in the short term. .
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