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

Latest News
AGCO Ratliff featured
EquipmentAGCO Mourns Passing of Company Founder, Industry Vision…
April 25, 2017
AGCO Corp., a worldwide manufacturer and distributor of agricultural equipment and solutions, mourns the passing of founder and former President, Read More
Engenia soybeans
Crop InputsINNVICTIS CROP CARE Introduces VANDAL MOC Soybean Herbi…
April 25, 2017
INNVICTIS CROP CARE, LLC has announced the U.S. EPA registration for VANDAL MOC, a combination of sulfentrazone plus metolachlor. VANDAL Read More
Kochia
HerbicidesINNVICTIS CROP CARE Launches STAVE Post-Emerge Broadlea…
April 25, 2017
INNVICTIS CROP CARE, LLC has introduced STAVE as the newest addition to­ its expanding portfolio. STAVE will be a great Read More
Sonny Perdue
LegislationSonny Perdue Confirmed by Senate as Next Agriculture Se…
April 25, 2017
After months without a secretary of agriculture, the Senate voted Monday evening to confirm former Georgia Gov. Sonny Perdue to Read More
BPIA logo
Seed/BiotechBPIA Files Comments with USDA
April 24, 2017
The Biological Products Industry Alliance (BPIA) has filed comments with the USDA’s Animal and Plant Health Inspection Service (APHIS) Plant Read More
Eric SfiligojHope for Application Equipment Sales
April 24, 2017
The old saying goes that a “rising tide lifts all boats.” If this is indeed the case, then things may Read More
Stewardship video screenshot
ManagementNew Video Raises Awareness of 2,4-D Stewardship
April 24, 2017
A new public service video developed and produced by the 2,4-D Research Task Force, in conjunction with the American Soybean Read More
ManagementAn Inside Look at Award Winning Ag Retailer Gar Tooteli…
April 20, 2017
CropLife Editor Eric Sfiligoj discusses An Inside Look at Award Winning Ag Retailer Gar Tootelian Read More
Students Soybean Field
Industry NewsMACA Announces 2017 Young Leader Scholarship Recipients
April 19, 2017
The Mid America CropLife Association (MACA) Board of Directors selected 11 college students to receive the MACA Young Leader Scholarship Read More
Growmark FS Outlet
SoftwareKnoa Software Solution Helps GROWMARK Boost System Perf…
April 19, 2017
Knoa Software, a leading provider of user experience management (UEM) software, has announced that GROWMARK, Inc., a regional agricultural cooperative Read More
Crop InputsFBN Publishes ‘Voice of the Farmer’ Agricul…
April 17, 2017
Farmer’s Business Network (FBN) released today its “The Voice of the Farmer”, which the company is describing as “a special Read More
ManagementTalking Responsible Ag
April 13, 2017
CropLife Editor Eric Sfiligoj discusses the Responsible Ag program with director Bill Qualls. Read More
Crop InputsFlying Under the Radar No More, FMC Goes Big
April 13, 2017
Describing FMC as “under the radar,” admittedly, is probably a stretch. But in a snap of the fingers, FMC upped Read More
Crop InputsWhat do Roundup and Mickey Mouse Have in Common? Califo…
April 13, 2017
(SOURCE: East Valley Times) Glyphosate, the active ingredient in Monsanto Co.’s Roundup and many other weed killers, is being added Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSource: ChemChina to Divest Assets to Adama Following S…
April 11, 2017
China National Chemical Corp. plans to redistribute agrochemical assets to its Adama unit after the $43 billion takeover of Syngenta Read More
Farming drone air
Eric SfiligojThe Interest in UAVs for Agriculture Grows
April 10, 2017
At times, it seems as if experts have been predicting “big things” for unmanned aerial vehicles (UAVs) for several years Read More
OpinionOpinion: Taking On The Farmers Business Network
April 8, 2017
Well, another round of venture capital funding has come to Farmers Business Network (FBN), followed up with the obligatory feature Read More
Drone
EquipmentFarming Drones: The Future Of Agriculture?
April 7, 2017
Chances are, you already know drones are amazing. After all, this is something DroneLife readers just understand. But if you’re Read More