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
FertilizerGypsum Added To List Of Conservation Practices
July 28, 2016
Crop farmers in a growing number of states may be eligible for financial assistance from the USDA’s Natural Resources Conservation Read More
Management2016 CTIC Cover Crop Survey: 33% Report ROI From Cover …
July 28, 2016
Insight from 2,020 farmers from across the country reflected enthusiasm for cover crops and—for the fourth year in a row—found Read More
Palmer pigweed seedhead in cotton
HerbicidesStudy: Fall Weed Controls Can Make Significant Impact O…
July 28, 2016
An article published in the latest issue of the journal Weed Science shows that adopting harvest-time and post-harvest weed controls Read More
InsecticidesSyngenta: Beware Of Early Stinkbug Threat To Soybeans
July 28, 2016
With the record warm temperatures this past winter and confirmations from early entomologist reports, Syngenta encourages growers to monitor stinkbug Read More
Peanut field
Crop InputsVerdesian Introduces New Inoculant For Peanuts
July 28, 2016
As planning begins for the next growing season, Verdesian Life Sciences adds Primo Power CL, a new liquid inoculant, to Read More
Soil Young Corn
Crop InputsSmithsonian: 5 Things to Know About New GMO Labeling Bi…
July 27, 2016
On July 14, the House of Representatives passed a bill requiring large food companies to label products containing genetically modified Read More
Palmer pigweed in soybean stubble
HerbicidesSpecial Issue Of Weed Science Explores Human Aspects Of…
July 27, 2016
Weeds that evolve resistance to herbicides are a serious threat to global agricultural production. In this Special Issue of Weed Science, Read More
CHS Primeland
CropLife 100CHS Businesses In Washington, Idaho Combining For Great…
July 27, 2016
As full-service ag retailers, CHS Primeland and CHS Farmers Co-op collectively serve farmers and other customers in 15 counties in Read More
Storage Tanks at Nachurs
Crop InputsNACHURS Joins Field to Market
July 27, 2016
NACHURS announced today that it has joined Field to Market: The Alliance for Sustainable Agriculture, a leading multi-stakeholder initiative working Read More
Illinois Researchers
FertilizerMeasure Of Age In Soil Nitrogen Could Help Precision Ag…
July 26, 2016
What’s good for crops is not always good for the environment. Nitrogen, a key nutrient for plants, can cause problems Read More
Kochia
Crop InputsNufarm Launches New Herbicide for Resistant Kochia
July 25, 2016
Nufarm introduces Scorch herbicide for U.S. farmers and ranchers combating a broad range of troublesome broadleaf weeds. A unique premix Read More
ManagementNew Rabobank Report Calls for Farmer ROI Focus
July 25, 2016
As U.S. row crop farmers brace themselves for a third year of negative margins, Rabobank believes farmers must lower the Read More
Syngenta Sign
Crop InputsBloomberg: Syngenta-Chem China Deal on Track for Regula…
July 25, 2016
Syngenta AG, which has agreed to be taken over by China National Chemical Corp. for $43 billion, said talks with Read More
ManagementGROWMARK Meeting Visit, Company Takeover Updates, and R…
July 22, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent speaking engagement at GROWMARK’s eastern event, crop protection company merger rumors, Read More
Crop InputsMonsanto: EU Approves Roundup Ready 2 Xtend Imports
July 22, 2016
Monsanto Co. announced today that the European Commission has granted import approval for Roundup Ready 2 Xtend soybeans. This milestone Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSyngenta Announces Alfalfa Seed Split Off
July 22, 2016
On September 1, 2016, Syngenta will transfer sales and distribution of alfalfa seed to the NEXGROW branded business that is Read More
Dow DuPont
Crop InputsDuPont, Dow Shareholders Approve Merger
July 21, 2016
DuPont and The Dow Chemical Company announced that, at their respective special meetings of stockholders held today, stockholders of both Read More
ManagementLand O’Lakes Announces SUSTAIN Business Unit, Oth…
July 20, 2016
Land O’Lakes, Inc. today announced the formal organization of a new business unit, SUSTAIN, and its leadership. SUSTAIN will focus Read More