Fertilizer Inventories Build As Prices Fall
Financial squeeze is increasing supplies.
Bryce Knorr
Published: Apr 17, 2009
Sluggish demand around the world due to acreage cutbacks and the global financial squeeze is increasing supplies of some fertilizers, as prices mostly continue to ease both at wholesale and retail price points.
March month-end supplies of potash and DAP increased. Potash prices from North American suppliers recently broke — they were the last holdouts after the big collapse suffered by other crop nutrients from last year's all-time highs. However, potash prices remain expensive to the farmer, ranging from $750 to $850 a ton in Illinois, according to USDA, where prices average $808. That's more than $100 above fair value, according to Farm Futures pricing model.
Urea stocks decreased at the end of March, though they remain above five-year averages. Urea prices rallied into the end of last month, but have since eased, falling $12.50 a ton this week at the Gulf to $271.25. Farmgate values were down $4, according to USDA, averaging $435 a ton, in a range of $393 to $500. The bottom of that range is just $10 off fair value, according to Farm Futures pricing model. Urea prices could see a little strengthening into June, with forwards suggesting prices could be around $25 higher.
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Tagged: farm, usda, farm futures, farmfutures, farmfutures.com
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