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December 29, 2008

 

ASA weekly: Wholesale US fertiliser prices drop
 

 

After climbing continuously for six years, US wholesale fertiliser prices are seeing a downturn due to drops in commodity prices and natural gas, the primary ingredient to make fertilisers.

 

That is according to a report by the American Farm Bureau Federation (AFBF).

 

Wholesale prices for fertiliser is plummeting with retail prices yet to fall because soy, corn and other commodities prices have fallen 50 percent or more from summer highs.

 

According to AFBF Senior Economist Terry Francl, the wholesale fertiliser price drop began about two months ago, after the time farmers applied fall fertiliser to their crops.

 

According to the report, wholesale prices for anhydrous ammonia in the Corn Belt have declined from the US$1,000 per-tonne-plus range to the US$500 range. Urea has dropped from the mid-US$800 range to the mid-US$300 range. Diammonium phosphate has declined from US$1,100 to US$600 per tonne. The decline in potash prices has been less significant, dropping from a little more than US$900 per tonne to slightly over US$800.

 

Francl said besides a fall in commodities prices, the drop in natural gas prices also accounted for the decline in wholesale fertiliser prices. Natural gas prices have declined from more than US$11 per million BTUs (1,000 cubic feet) to around $6 per million BTUs. Natural gas takes up 80 percent to 90 percent of the input cost of manufacturing anhydrous ammonia.

 

Francl said fertiliser dealers with large, high-priced inventories piling in the warehouse are in for a difficult time as farmers had indicated that they were planting less fertiliser-intensive crops, such as corn and cotton which do not use nitrogen at all to avoid adding nitrogen to the ground.
 

U.S. & South America Soybean/Products Balance

 

United States 

Argentina

Brazil

Actual

Estimate

Proj.

Actual

Estimate

Proj.

Actual

Estimate

Proj.

2006/07

2007/08

2008/09

2006/07

2007/08

2008/09

2006/07

2007/08

2008/09

Soybeans

thousand tonnes

 Carryin

12,229

15,617

5,580

334

1,876

945

2,252

3,110

3,830

 Production

86,770

72,824

79,486

48,800

46,200

50,500

59,000

61,000

59,000

 Imports

246

269

191

2,336

3,025

2,700

108

100

150

 Crush

49,198

49,024

46,675

35,962

35,180

36,700

31,511

31,955

31,500

 Exports

30,428

31,598

28,576

12,132

13,400

14,900

23,805

25,450

25,000

 Other

4,002

2,508

4,422

1,500

1,576

1,600

2,934

2,975

3,025

 Usage

83,628

83,130

79,673

49,594

50,156

53,200

58,250

60,380

59,525

   Carryout

15,617

5,580

5,584

1,876

945

945

3,110

3,830

3,455

Soymeal

thousand tonnes

 Carryin

285

314

267

2,003

1,144

1,200

863

1,563

1,878

 Production

39,058

38,322

36,959

27,856

27,607

28,700

24,420

24,760

24,410

 Domestic use

31,184

30,078

29,484

619

634

660

11,520

12,180

12,600

 Net Exports

7,845

8,291

7,470

28,096

26,917

28,013

12,200

12,265

12,075

 Usage

39,029

38,369

36,954

28,715

27,551

28,673

23,720

24,445

24,675

   Carryout

314

267

272

1,144

1,200

1,227

1,563

1,878

1,613

Soybean oil

thousand tonnes

 Carryin

1,365

1,399

1,126

487

310

301

300

341

406

 Production

9,294

9,329

8,868

6,917

6,709

7,017

6,050

6,130

6,040

 Domestic use

8,420

8,313

8,165

580

1,045

1,167

3,550

3,895

3,998

 Net exports

840

1,289

907

6,514

5,673

5,800

2,459

2,170

2,050

 Usage

9,260

9,602

9,072

7,094

6,718

6,967

6,009

6,065

6,048

   Carryout

1,399

1,126

922

310

301

351

341

406

398

 

USDA Export Sales (tmt) - Week of 18 December 2008

Country

Commodity

New Sales

Accum. Exports

 

Country

Commodity

New Sales

Accum. Exports

Canada

Soy

7.80

82.80

 

Japan

Soymeal

9.90

34.30

China

Soy

374.30

7623.80

 

Mexico

Soymeal

33.30

361.00

Colombia

Soy

12.90

50.40

 

Philippines

Soymeal

3.80

46.40

Egypt

Soy

60.00

142.10

 

Turkey

Soymeal

16.60

38.40

Indonesia

Soy

114.60

312.60

 

Venezuela

Soymeal

23.00

152.50

Korea, Rep.

Soy

58.30

123.80

 

Canada

Soyoil

2.20

8.20

Mexico

Soy

12.40

856.80

 

Nicaragua

Soyoil

0.60

7.20

Netherlands

Soy

129.80

558.90

 

 

 

 

 

Spain

Soy

11.30

213.80

 

 

 

 

 

Taiwan

Soy

59.60

640.50

 

Export Sales Totals (tmt)

Canada

Soymeal

16.20

234.20

 

Commodity

Outstanding Sales

Accum. Exports

New Sales

Colombia

Soymeal

7.70

38.80

 

Soybeans

7,260.90

125,580.50

584.80

Dom. Rep.

Soymeal

15.70

74.40

 

Soymeal

1,409.70

1,649.00

145.70

Guatemala

Soymeal

12.00

64.40

 

Soyoil

107.80

106.20

5.50


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