Wholesale Nitrogen Breaks Lower

Posted on 06/18/2020 12:07 PM


Fertilizer prices were lower across the board with urea and anhydrous leading declines.

Our Nutrient Composite Index (NCI) softened 3.55 points to 535.96.

The big news this week is the break in wholesale ammonia and urea. Gulf terminal prices on both products sagged. Some have suggested that fewer than expected corn acres were planted and I believe that is part of it. Watchers have questioned the 97 million corn acreage figure since its release earlier this spring. But if we look at distillate stocks and retail diesel prices, we note the decline in demand due to COVID shutdowns and halted air travel. We may be seeing a similar scenario in world nitrogen supplies, but since the pandemic hit during preplant application season, and farmers continued to spread spring nutrient, that demand may have stalled what otherwise could have been a similar surge in nitrogen.

In other words, ongoing applications through the shutdowns likely blunted the price impact on retail and wholesale nitrogen prices as demand was at its seasonal peak. Industrial output took a hefty hit during the pandemic and it is likely that ammonia for industrial purposes quickly backed up, creating a supply overhang. It has also been rumored that China has ramped up urea production and is exporting product at a higher rate. Reports surfaced in March that China was producing urea at around 70% of capacity amid sagging domestic demand, and turned to the export market to unload the excess supply.

That article from profercy.com (click here to view the story) reads, in part, "...there has been little demand worldwide at the importer or trader level for new shipments of granular urea. Producers in North Africa have been forced to slash prices by $15-20pt in order to find liquidity for first half April movement. Nearby European and Turkish markets have slowed with many focused on executing earlier business. Elsewhere in the West, offers into Brazil slid leaving the Brazilian market at a considerable discount to the US Gulf, where prompt barges have traded as high as $275pt cfr equivalent. May barges have traded at more than a $20pt discount on prompt."

There is also an interesting dynamic forming between India and China. Urea traders look to India's annual spring urea tender for price guidance and this year, ports were shut down during the time the imports would typically have been tendered and moved. This as tensions flare and shots ring out in a contested region along the Indochina border. This morning reports, said India was canceling certain commercial contracts with China. Whether or not that includes urea is presently unclear.

UAN prices have been a bit more stubborn, likely in response to sidedress season, which should be winding down soon. The offseason is shaping up to feature retail price cuts or nitrogen products and we will be monitoring retail and wholesale price movements as well as international developments for clues as to when we ought to lock in prices for fall. If prices fall far enough, we will likely advise farmers book at least a portion of expected spring needs at the same time.

Current Week
-66 cents
-84 cents

Corn Futures

  • December 2020 corn futures closed Friday June 12 at $3.43 putting expected new-crop revenue (eNCR) at $559.68 per acre, off $3.52 on the week.
  • With our Nutrient Composite Index (NCI) at 535.96 this week, the eNCR/NCI spread widened 1.85 points and stands at -63.97.nitrogen indices chart


  • Nitrogen prices were led lower by urea which declined $6.21 on the week. Nebraska led to the downside falling $21.20 as Iowa dropped $13.30 and Indiana shucked $12.80 per short ton. Two states were unchanged and no state posted a higher urea price this week. According to MosaicCo., wholesale urea values firmed in the week ended June 12, indicating just how fresh the news of a steep decline in wholesale values is. Next week's update from MosaicCo. will be telling.
  • Anhydrous ammonia fell on pressure in Nebraska to the tune of $23.85 as Iowa softened $13.68 and Kansas fell $11.18. No state posted a price hike this week and most were unchanged.
  • UAN32% was led lower by Michigan, which softened $5.88 as Wisconsin fell $4.53. All other states were $1-$2 lower with most states unchanged.
  • A similar setup in UAN28% where Wisconsin led the way down, off $13.29 as declines in other states ranged from 8 cents to a little more than a dollar. Here again, many states are unchanged on the week.

Phosphatep and k indices chart

  • Phosphates were lower on the week with DAP off 66 cents per short ton and MAP down $1.26 regionally.
  • North Dakota led MAP lower falling $5.60 as Wisconsin softened $4.27. Iowa firmed $1.68 and Ohio gained 16 cents.
  • Most states were unchanged on DAP with four states posting declines ranging from $2.82 in Wisconsin to 25 cents per short ton in South Dakota.
  • According to MosaicCo., wholesale phosphate values firmed slightly at U.S. terminals during the report week.
  • I would also point out that the oversupply of nitrogen originated in North Africa and China, both are key phosphate production spots. If those parts of the world are having trouble moving sufficient volumes of nitrogen, the same may be true of finished phosphates. We will be watching the wholesale markets very closely over the coming weeks.


  • Potash was lower this week as well with Wisconsin falling $9.44 and Kansas off $2.27. Minnesota gained $1.47 and South Dakota firmed $1.13. Most others were unchanged on the week.
  • MosaicCo. reports lower wholesale potash values during the report week.
  • With anhydrous now priced below $500 regionally, our indexed potash figure still holds a moderate premium to anhydrous ammonia, but is a few ticks below our overall Nutrient Composite Index. That likely suggests next week's price action across the complex will look a lot like this week's.

nutriet composite index chart



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