Market and product
Ammonia Prices Could Edge Lower
Ammoniaprices edged a little higher on updated dealer price sheets, reflecting late season application demand spurred by unusually warm December temperatures. Most changes were relatively small, a couple of dollars, boosting the average retail price less than a buck to $687. Retail prices range from $640 to $770, with the lowest on the Plains, closer to plants and distribution facilities. Wholesale prices were steady; terminal prices remain around $640. International markets look weak with the supply chain for once staying clear of problems. Still, prices out of the Black Sea plus shipping remain higher than current prices at the Gulf, where the index used to settle swaps is at $567.
Urea prices again headed in different directions on the wholesale and retail levels. Dealers updating offers moved lower, with the average retail price down $3.50 to $473. New prices are generally less than that, with some down around $425 to $430. That reflects the current cost of the wholesale market. Unfortunately, those costs are rising as demand around the world picks up. Gains are not big so far, but prices are $10 to $15 above recent lows, with the Gulf just under $320 and terminals following suit as dealer restock. The swaps market suggests more price increases are likely in January, with forwardss through March some $18 higher. Rising crop prices are adding pressure to a market that looks like it has more upside unless China starts selling aggressively again. Growers should be beating the bushes to lock in costs for 2015.
UAN remains firm, with prices likely to jump higher in January on demand from farmers who didn’t get nitrogen applied this fall. The current cost of 32% at the Gulf was steady at $252.50, but swaps for January through March are quoted around $270.Current costs prices translate into fair value retail of around $330 for 28%, close to where the market is at. Our average slipped $2.50 to $322.50, though some new offers are below $300. That price looks like a bargain, with fundamentals suggesting a price range of $315 to $355.
Phosphates were steady at the Gulf, but recent price gains there continue to move up river, where terminals were another $5 to $10 higher for DAP. The $422.50 price at the Gulf is set to hit $440 in January according to the swaps trade, with fair retail value $100 higher. As was the case with nitrogen fertilizers, retail prices slipped as dealers updated price sheets, with the average at $555.50 a dollar lower this week. Updated prices are running around $530 with international demand steady to higher.
Potash traders continue to wait for China to come to terms on its latest round of imports, with lack a progress a sign that manufacturers are trying to hold firm. That may be easier to do if Russian production loses two mines that flooded recently and Canadian firms continue to show restraint. Average retail prices edged almost a dollar higher to $485.50, with prices ranging from $470 to $500. Terminal prices remained flat at $405.
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