Weekly Fertilizer Review: Fertilizer Prices Remain Soft As Production Cuts Mount
Farmers remain wary of buying fertilizer.
Bryce Knorr
Published: Nov 21, 2008
Despite sharp production cutbacks supplies of most fertilizers are sharply higher, with DAP and urea inventories in North America well above five-year averages at the end of October, according to industry data. Not surprisingly, prices continue to soft, as farmers remain wary about buying fertilizer and trades can't find financing for cargoes.
The only product remaining in tight supply is potash, where inventories remain relatively low, though they finally moved above year-ago levels at the end of October. Some production internationally is being curtailed as well, which could keep the pipeline tight, helping support prices.
The combination of lower natural gas prices and sharply lower ammonia prices has returned producer margins back to their normal range, after profits surged on this year's run to record prices. Ammonia prices remain soft on world markets, with one deal done around $220 a short ton out of the Black Sea, and December bid at $200. Prices at the Gulf remained flat around $320, but could fall another $75 based on the international market. Concerns remain about high-priced inventory in the U.S., however, and whether the market will be able to handle spring demand due to slow applications this fall.
To read Bryce Knorr's complete weekly fertilizer review, click HERE.
Permalink: Click here
Tagged: fertilizer, farmfutures, farmfutures.com, www.farmfutures, www.farmfutures.com
|