Recent data offered by The Fertilizer Institute (TFI) suggests the outlook for phosphates has moved from uncertain to relatively good. Increased production has bolstered stocks-on-hand upstream, and with an increase in supply, trends suggest DAP and MAP should be easy to come by in the short-term.
U.S. DAP/MAP inventories increased during the month of November by 32%. This is the highest level reported since March of 2012 after inventories found a new low in October 2012. The figure remains 7% below the five-year average and with international contracts to India and China still unfilled, production is expected to continue at its current clip.
North American November potash inventories are up 22% from October's levels. This puts November stocks up 48% over November 2011 levels and 57% above the five-year. Due to production curtailments in the absence of autumn sendouts to China, production rates are expected to dip this December in Saskatchewan to keep pace with demand.
While current P&K supplies are strong, its is questionable whether or not China's domestic K supply will hold and while Uralkali and Belarus are able to ship nutrient directly to China via rail, their supply is not enough to keep China's soil in the green. Eventually, China will likely need to book some Canadian nutrient and the timing of that will have a direct effect on nutrient pricing across North America.
Your Inputs Monitor Index has noted a price slide for DAP/MAP and potash in the past few weeks on weakening post-application season demand. But a bottleneck in supply in the short-term could urge these prices higher if the international market becomes hungry for North American nutrient when American farmers need it most.