Sifting through P and K demand, supply, and logistics for the months ahead

Current dynamics of the fertilizer market are quite different from where they were just one year ago. That said, there are still big demand questions, geopolitical pressures, and logistics issues yet to be hammered out — they’re just in different places this year.

To unravel the complex trade flows of phosphorus, potassium, and nitrogen fertilizer, we go to Josh Linville, fertilizer market analyst with StoneX.

While significant logistics tie-ups aren’t currently an issue, we’re barrelling towards a pinch point in a few weeks that may be an issue or not depending on how things unfold between now and November, Linville says.

“Effectively, at the end of this last spring season, we wiped out phosphate inventories. We wiped out potash inventories. We wiped out urea inventories. And in fact, some of those products we are casting that we’ve probably never ended that low. And if we didn’t set a record low, we were very, very close to it. Well, that means that we have a tremendous amount of refill that we had to do not only in the U.S., but also in Canada,” he says. (more below the video — hit play for the full story!)

All of that product that needs to get back in position requires a well-orchestrated dance of boats, barges, trucks, rail and more trucks… and not all of those systems are functioning at high capacity.

Linville says that there does seem to be a sentiment out there that prices are going lower, however, if farmers don’t at least inform their suppliers of intentions, that logistics crunch could materialize or spring-application farmers might find themselves scrambling for product.

There are also global supply and demand dynamics to consider. China can’t be ignored — both for supply or buying power.

“China is kind of a swing exporter. When they’re in the market, things feel heavy, when things went and on the market. All sudden prices seem to float higher,” Linville says. But China has since announced its plans to maintain stockpiles in China and plans to restrict exports. “So nearby also now the world looks like prices are moving higher, because without China, you don’t have a competition.”

Moving on to nitrogen, an already tight market has been made much tighter with some production slow downs. Spring is a long time away, sure, but if today’s values really work for you, there’s no harm in securing the fertilizer and locking in that value, Linville says.

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