WEEKLY FERTILIZER REVIEW: Fertilizer Prices Could Be Bottoming
Dealers are sitting on inventory bought at higher prices.
Bryce Knorr
Published: Dec 19, 2008
While nearby prices for fertilizers continue to show weakness due to plunging demand and oversupply, forward bids are starting to creep higher for January and February delivery on international markets, the first hint that the complex may be trying to bottom.
However, producers trying to secure supplies may find themselves grasping at a brass ring that's always out of reach. Midwest dealers in some locations continue to sit on inventory bought at the market's top last fall, unwilling to mark it down to today's market.
Inventory reports out for the end of November show just how fast stocks built when buyers stepped away from the market due to the global financial crisis. DAP supplies almost tripled their five-year average, while urea inventory were twice the normal amount. Ammonia margins plunged from record levels seen in the fall to losses of $100 a ton.
Manufacturers announced more cutbacks in production this week, as they move quickly to slash output. Now, the question is whether they will be able to supply all the product farmers need in a relatively short amount of time this spring.
To read Bryce Knorr's complete weekly fertilizer review, click HERE.
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