*RCF receives near record volume of offers*
India’s latest purchasing tender through RCF closed on Friday, receiving offers totalling 3.63mn tonnes from 16 companies. Price details were released by RCF Wednesday morning with L1 offers confirmed at $279.25 cfr east coast and $279.94 cfr west coast India, reflecting netbacks to the low-mid $260s fob China and high $260s for fob AG. The significant volume offered into the tender sent a bearish signal through the market, with concerns over how much product traders and producers are searching to find an outlet for. Although the tender supports recent price levels, whether the volume of product offered is physically available in the market, and how much India decides to purchase is expected determine sentiment beyond the tender.
*Nola traders roll positions*
We’re seeing Nola urea calendar spreads attract attention here at FIS this week, with 21kt being traded on the Nov/Dec spread at -5 on Tuesday. The trade is players with length in Nov, rolling positions into Dec at a carry of $5. We’ve also seen the Dec/Jan spread trade at the same level. With the market trading at full carry out to Jan/Feb, we see support into Q121 for Nola, inverse to where we currently see forward curves in intl markets, with AG, Egypt and Brazil futures all exhibiting backwardation, as the demand outlook into late Q4 / Q1 is less positive.
*Phosphate prices stabilise*
Nola DAP values for barges are still hanging around the $355-$360 after much of the market expected values to fall after river close. However, given how tight supply is, values have maintained and we’re starting to see more optimism in Q121 for Nola DAP futures. Specifically, we’ve seen values for the Q1 timeframe trade $344-$346 with a few dollars carry from January to March. However, there seems to be some resistance to get any higher than the mid $340s because hedgers are more than happy to lay off length around these values. That being said, it seems to be market rhetoric that if we have a good fall season for phosphates, supply will be tight going into 2021 which could support the market, causing prices to firm further ahead of the 2021 planting season. Brazil MAP values meanwhile appear to be cooling off slightly, after a significant run up in prices over the last few months. In fact, this week saw the cfr Brazil MAP index print $2.50 lower from ICIS/Profercy, which marks the first decrease in the week-on-week index price since the start of May.