TFI: US phosphate values stay soft amid low demand but season outlook fairly positive

Source: ICIS News

2019/02/13

ORLANDO, Florida (ICIS)--The outlook for the domestic phosphate application season remains fairly positive, though values continue to soften amid low demand, with at least 30-45 additional days to pass before prime buying becomes more engaged, market sources said on Wednesday.

Speaking on the sidelines of The Fertilizer Institute's (TFI) annual meeting, participants said because of significantly decreased autumn applications due to weather conditions, which are still keeping activities at bay, expectations are firming for higher levels of buying as the market moves into the second quarter.

The impact of the current weather conditions, which erased any thoughts of an early spring start for conference participants, was a common refrain as the lack of farmer advancement towards spring activities and the absence of new demand have resulted in diminished business over the last several weeks.

“The US is in a similar spot as some of the international markets. We are starting at a low point, and ever since we have gone to this level below $400 you are also seeing very little, if any recently, trading,” said a market source.

But for now with full start of spring a bit away, and thought that the market could ease down a bit further, buyers appear content to rest on the sidelines for even longer.

“I would say I am relatively optimistic on phosphates but I won’t be buying yet,” said a market source, who feels the US will not have issues with either supply levels or the amount of demand this spring planting season.

Rather it could have issues with the timing of the buying, and whether logistical issues emerge with a sudden and intensive rush in buying as the general interest for phosphates could quickly surge just like for nitrogen offerings once it is clear spring is under way.

Boosting the potential outcome for phosphates is the forecast that the US will sow more corn acreage over soybeans, which would equate to an increased level of fertilizer applications.

“I do think it is going to rebound; it is not going to crash. They are saying corn is going to be up and I think that the inventory upstream is lighter. There was less fall fertilizing so there is that opportunity there. This season the volumes and how much there will be depends on when they can get it into the fields,” said a market source.

The TFI event runs 11-13 February.