Rabobank: Weather Could Delay Fertilizer Demand

Cool, wet conditions in much of the Midwest and concerns regarding future weather will delay the normal cycle of fertilizer restocking, bringing significant uncertainty to the 2013 Q2 fertilizer markets, according to a new report released by researchers at the Rabobank International Food & Agribusiness Research and Advisory (FAR) group. The report finds that, overall, the pace of fertilizer demand is now increasing seasonally and fuelling a pick-up in global trading activity.

The report goes on to show the fast-approaching Northern Hemisphere planting season will be pivotal in driving short-term agri-commodity prices. Across South America, all eyes are on the weather as planting of winter crops continues.

“Across most regions, a financial incentive to maximize production is driving a large planting, which will lead to a predominately neutral price outlook,” notes Sterling Liddell, Senior Vice President with the Rabobank Food & Agribusiness Research and Advisory group. “However, there are some uncertainties regarding policy, which will ultimately impact market sentiment. As a result, buyers will be cautious but eventually, global purchasers will need to lock in fertilizer supply contracts.”

After a bullish start, global urea prices have started to wane. Delayed demand and field work in the U.S. and Europe respectively, have combined with oversupply (the extent of which was demonstrated in the much-anticipated import tenders in India during April) to drive a shift to a buyers’ market. Rabobank’s outlook for urea in Q2 2013 is neutral to negative.

Phosphate prices are expected to increase marginally, as various factors combine to limit demand. U.S. farmers applied significant volumes of DAP/MAP in Fall 2012, which will result in lower demand this spring. In addition, the 2012/13 crop year was the second year in a row to see elevated agri-commodity prices. While this would traditionally lead farmers to spend their additional purchasing power on phosphates to restore levels in the soil, this was  done the previous year, so the catch-up effect will not be seen as robustly as in past years. Finally, China’s low export tax window will open two weeks earlier than in recent years, and the extra Chinese supply will lower the upside global price potential.

The reduction in international potash prices is directly related to the renegotiation of new supply contracts with importers in China and India. The willingness of growers in India to reduce potash application detracts from the industry’s intention to increase prices on the open market during this quarter. However, potash demand is expected to increase in South America and parts of Asia as farmers take advantage of good crop economics, which should enable the industry to avoid new strong price reductions in the short term.

Leave a Reply

Featured Stories

CropLife 100South Dakota Wheat Growers To Add Grain-Agronomy Facility
September 26, 2014
Planned to be constructed in Kennebec, the facility will be located along the soon-to-be rehabilitated line of heavy-rail service from Chamberlain to Presho. Read More
FertilizerCF Industries Confirms Merger Of Equals Discussions With Yara International
September 23, 2014
CF Industries Holdings, Inc. has confirmed that it is in preliminary discussions with Yara International regarding a potential merger of equals transaction. Read More
Seed/BiotechUSDA Approves Enlist Following Rigorous Review
September 18, 2014
Dow AgroSciences now awaits EPA registration of Enlist Duo herbicide, the companion herbicide to the Enlist traits, which is expected in the near future. Read More
CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More

Trending Articles

Equipment2014 Product Of The Year Voting
September 19, 2014
Many new products were introduced to the ag retail marketplace this year. From this group, CropLife IRON and its consulting partners have selected five finalists for the Product of the Year award. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More

Latest News

FertilizerFertilizer Outlook And Technology Conference Set For No…
September 30, 2014
Conference participants can expect to gain perspective on the outlook for agriculture and major fertilizer materials and inputs from industry experts. Read More
MicronutrientsVerdesian Acquires Micronutrient Supplier
September 30, 2014
Verdesian Life Sciences has acquired QC Corp., a producer and supplier of granular and dry micronutrients and ferrous sulfate products. Read More
Eric SfiligojHearing From Young Ag Voices
September 30, 2014
Potential future leaders in ag retail had the chance to shine at the recent Mid America CropLife Association meeting. Read More
WebinarsUpcoming Webinars
September 30, 2014
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
Crop InputsSyngenta Appoints New Chief Operating Officer
September 29, 2014
Jon Parr will succeed retiring COO John Atkin at the end of the year. Read More
CropLife 100South Dakota Wheat Growers To Add Grain-Agronomy Facili…
September 26, 2014
Planned to be constructed in Kennebec, the facility will be located along the soon-to-be rehabilitated line of heavy-rail service from Chamberlain to Presho. Read More
CropLife 100GROWMARK Announces Vice President Appointments
September 25, 2014
Two individuals have been appointed Vice President positions on the GROWMARK executive team. Read More
FertilizerFertilizer Industry Organizations Join Global Alliance …
September 25, 2014
The Fertilizer Institute, the International Plant Nutrition Institute and the International Fertilizer Industry Association are encouraging the industry to promote the proper use of fertilizer products to minimize their environmental impact. Read More
Precision AgARA Organized Precision Forum Hits Capitol Hill
September 24, 2014
The Coalition for the Advancement of Precision Agriculture (CAPA) hosted its inaugural Precision Ag Forum, Sept. 18, in Washington, D.C. Read More
FertilizerFactors To Consider When Placing Fertilizer With Seed
September 24, 2014
The type of crop, fertilizer source, row spacing and soil environment all affect how much fertilizer can be safely applied with seed. Read More
FertilizerSidedressing Manure Into Corn Has Promising Results
September 24, 2014
Applying manure to growing crops can boost yields, reduce nutrient losses and give livestock producers another window of time to apply manure to farm fields. Read More
FertilizerWhen To Sample Manure For Analysis
September 24, 2014
Because the goal is to collect a sample that represents the manure actually being applied, the best time to sample is during loading or field application. Here's why. Read More
Syngenta
Seed/BiotechSyngenta Faces Second Lawsuit Over Agrisure Viptera Cor…
September 23, 2014
A second company has sued Syngenta AG over sales of genetically modified corn seed not approved by China. Read More
StewardshipCover Crops Field Guide For Farmers Expanded
September 23, 2014
Farmers interested in planting cover crops to improve soil health now have an updated and expanded resource in the second edition of the Midwest Cover Crops Field Guide. Read More
HerbicidesArysta LifeScience Launches Contest For Wheat Growers
September 23, 2014
The Flush after Flush Photo Finish contest encourages farmers across the U.S. to participate through Instagram or Twitter using the hashtag #FlushAfterFlush. Read More
FertilizerCF Industries Confirms Merger Of Equals Discussions Wit…
September 23, 2014
CF Industries Holdings, Inc. has confirmed that it is in preliminary discussions with Yara International regarding a potential merger of equals transaction. Read More
StewardshipProgram To Examine Ag-Related Practices, Policies To Pr…
September 22, 2014
A panel discussion on October 14 will include a significant discussion on key issues and solutions related to all aspects of harmful algal blooms. Read More
Eric SfiligojIt’s Product Of The Year Voting Season
September 22, 2014
Readers of CropLife IRON will choose 2014’s best new product over the next month. Read More