MMTC back tendering immediately
This past week saw India back tendering for urea straight after closing the previous round, following disappointing participation at less than 10% of their target. A tender was expected to be announced on short notice, but the one day turnaround between confirmation of acceptances and opening the next tender, once again caught the market off guard. Paper and physical urea markets continued their rally on the back of India’s clear intent to secure tonnes.
China/India trade concerns escalate
News on Friday emerged that Chinese participation into the upcoming tender could be restricted following ongoing trade tensions between the two countries. With domestic demand so strong in India, their reliance on China to meet requirements is undeniable. As a result of the uncertainty, we saw a further jump in both paper and physical markets Friday and into this week. On paper, Nola urea traded $230+ across the curve, AG urea was bid into the high $250s, $262 traded for Sep Egypt and Sep Brazil got as high as $270. Concerns were somewhat allayed on Tuesday, with MMTC withdrawing a clause that essentially restricted traders from shipping product from China. At time of writing, urea markets once again have stalled, as participants await further detail around what prices the tender will achieve, and the extent to which Chinese urea will feature.
NOLA DAP futures continues to see liquidity
Nola DAP futures continue to trade for the August/September/October timeframe with values firming up into the low $320s from last week. As we head into harvest for corn, it looks like we’re going to see some great yields, which should lend favour to fall application of DAP. We’re starting to see river terminal prices firm up and as a result support NOLA barges prices. The international market has also been supportive on the physical side, which has lent further support to Nola DAP futures. Sellers of futures over the nearby three months at this point are either hedging existing physical positions or taking profits from earlier established long positions.