Wednesday, January 6, 2010

Fertilizer Weekly 12/21/09

Corn Drives Fertilizer Stocks Lower

Dollar strength drives down corn prices and fertilizer shares
Fertilizer stocks tumbled this week as corn prices fell with the recent reversal in
dollar weakness, which in turn raises renewed concerns about lacklustre corn
export demand. Fertilizer shares are highly correlated to the price of corn.
Continued talk of sub $350/mt fob Vancouver 2010 potash prices also hurt the
group but these stories were of little concern 3 weeks ago when corn was rising.

BPC expects China potash settlement by year-end In press interviews, FSU exporter BPC stated that it expects a China settlement by year-end. While local Chinese prices have been rising above a $400/mt Vancouver equivalent falling Brazilian prices imply a settlement below $370/mt. Distribution inventories are low globally but buyers are waiting to see where prices bottom.

DAP prices continue to rise, nitrogen markets flat
DAP prices rose 5-7% last week as strong domestic demand and low inventories
continue to push prices higher. Global nitrogen prices were flat as domestic
demand has ended, and international markets await confirmation that the IPL
tender in India has closed and the Q1:10 Ukraine natural gas contract has been set.

TFI shipment data confirms fall pickup in US fertilizer demand
This week’s TFI data confirmed that domestic fertilizer demand was up sharply in the brief November post-harvest window. November domestic shipments of urea, DAP/MAP and potash increased 97%, 200%, and 45% yoy, respectively. We believe this bodes well for demand in the spring, and are projecting consumption increases of 5% for N, 14% for P, and 27% for K in 2009/10.

Fertilizer Weekly -

No comments:

Post a Comment