02 May 2007 22:07 [Source: ICIS news]
HOUSTON (ICIS news)--Demand for ammonia and urea fertilizer has lagged behind previous industry expectations as foul weather across the middle US has continued to hinder spring planting for key crops such as corn, market sources said on Wednesday.
The US Department of Agriculture said this week that farmers had planted 23% of their corn crop in 18 key states, compared with 48% a year earlier, and the 2002-2006 average of 42%.
Granular urea prices declined by about $15/short ton in April to $350/short ton ($318/tonne) FOB (free on board) New Orleans, according to global chemical market intelligence service ICIS pricing.
Ammonia prices at a midwest terminal in Illinois have been steady for weeks around $480/short ton, sources said.
Midwest conditions were expected to improve this week, and ammonia demand was expected to pick up, a source said.
However, improved conditions will not translate into rising barge prices for granular urea, a midwest trader said. The trader noted that any prompt demand will push urea prices higher at the warehouse.
But there was not enough time to purchase barges in the US Gulf for prompt midwest application, and prices could slide, the trader said.
A trader said that in Missouri, Arkansas and Mississippi, a late freeze damaged corn, wheat and rice that was already planted.
The trader said farmers were replanting these crops, and will soon need to purchase more urea to apply on their fields.
“We’re going to see a heck of a tail on this season,” the trader said.
The delayed planting season comes amid expectations that record amounts of corn would be planted this year, fuelled by the ethanol sector.
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