Phosphoric Acid, Phosphates & Fertilizers Experts

Nitrogen prices edge higher

Ammonia joins urea in move on wholesale markets.

The changing of the seasons has brought with it a fall move higher in fertilizer prices. Though not dramatic, increased demand from growers around the world has firmed a market battered by oversupply this summer.

Ammonia became the second leg of the nitrogen complex to turn around, following the July/August move in urea. Anhydrous contracts for September at the Gulf settled $22.50 higher at $195, and the increase is already being felt in parts of the retail supply chain. Dealers on the Plains, where prices tend to adjust more rapidly, boosted prices $10, up to the $310 to $325 level. Our average dealer price slipped nearly $8 to $384.50, with the drop reflecting dealers posting new fall offer sheets. In Illinois and Iowa, for example, USDA’s survey last week put prices sharply lower on the reset, which took average prices there to $395 to $400, with the bottom of the large at $343 to $370. Ammonia imports fell 11% in July as prices bottomed.

Urea jumped another leg higher after Labor Day, with swaps up $5 to $15 Tuesday. Prices at the Gulf stabilized in August following a move off multi-year summer lows, then found more support in September as sellers demanded more internationally in front of another tender by India. More increases could be in the works as sellers out of the Middle East reportedly want another $15 above Tuesday’s settlement. Swaps at the Gulf for September are nearly $11 higher than the August close at $207.25, which translates into an average retail price of $337. That’s more than $50 above our average retail cost from last week of $284, though that reflects some dealers who have yet to begin raising prices. Those who ripped up offers sheets last week boosted prices by $25 or more. New offers on the southwest Plains are still running $290 to $310. Illinois and Iowa last week on average were at $309 and $303 respectively according to USDA. U.S. urea exports in July rose to their highest level in at least a decade after prices here were the cheapest I the world.

UAN costs also appear headed higher into fall. Swaps for 32% at the Gulf are at $126.75 with contracts for winter another $11 higher. Not surprisingly, average retail prices for 28% moved higher to $221 last week, fully reflecting the forward curve, and maybe a little more. Dealers on the southwest Plains with new offer sheets had mixed ideas, with some higher and some lower, but new costs generally were around $210 to $225. By contrast USDA put 28% in Illinois at $227 with Iowa still stuck at $260.

Phosphates were firm last week with potential for higher costs for growers pushed to buy supplies. Our current average retail price remained little changed for DAP at $424, a cost that didn’t budge much all summer. A few dealers tinkered with off sheets but changes were small, generally not more than $5 adjustments. Fair value looks higher based on the Gulf index of $323, but swaps show lower values into winter.

Potash drifted lower last week as dealers updated prices, but cuts may be harder to find. While the terminal price in the Midwest was unchanged at $254, the Gulf rose $5 on demand from growers getting ready for wheat seeding on the Plains. Prices seem to be moving a little higher on international markets as well. The current terminal price suggests fair retail value of $300, but that may be hard to find now.