Australian grain growers prepared to look out beyond the immediate focus of winter crop harvest may be able to get a fertiliser bargain over coming months.
Josh Linville, StoneX director of fertiliser, based in Missouri in the US, said the nitrogen fertiliser market in particular was starting to drop to levels that could provide attractive opportunities for Australian grain growers.
"The urea market has gone very quiet and that is starting to weigh on global values," he said.
"India is the largest importer of urea globally and following their last tender there was about 2 million tonnes of offers that did not find a home."
"When you combine this with the fact global production is continuing to rise, you see inventories grow and by extension the cost of carry grows."
Mr Linville said buyers around the world had yet to push the trigger on purchases despite the falling market.
"Global buyers see the price declines which emboldens them to wait even longer and this puts more bearish pressure on prices."
After the supply chain inspired price hikes of 2022, urea values have come back substantially.
"In the last update NOLA (New Orleans) urea prices were $US313/t, that is in the lowest quartile of prices."
He said growers would have to make a decision on what they saw as a good price as the falls would not continue forever.
"I'm of the mindset that prices do not have to drop substantially lower before buyers start stepping forward, what I am saying is that there could be an opportunity in the next 30 - 60 days, when most Australian farmers aren't really thinking about their fertiliser budget, that could work for next years application cycle."
On the phosphate front Mr Linville said the major news surrounded the Chinese government imposing export duties on phosphate.
China is generally the largest manufacturer and exporter of phosphate-based fertilisers in the world.
"It is uncertain how long this restriction will last and it could be important if it continues on into Australia's traditional fertiliser importing season in the autumn."
"It will not be impossible to find alternative product but the alternatives are further away, meaning higher freight costs."
He said importers were also concerned about the impact the restrictions could have on the market, saying that while at face value it was supportive of global prices it could have a paradoxical effect.
"What happens if the restrictions are loosened or done away with, we could then see the market changing rapidly."
Mr Linville said StoneX had just launched a fertiliser newsletter pitched at Australian grain growers to help them make more informed decisions.
"Fertiliser is generally a farmer's biggest input yet many people still rely on their retailer as their sole form of information about the market."
"What we are trying to do with this newsletter is to provide the global information that can assist with growers making their local decisions."
"The market intelligence provided won't change what is happening but it will give background as to why things are happening, for instance, what is happening in China, how does that relate to you, how could the Israeli conflict influence the market, all these things provide context for how the market is operating."
Those interested can sign up for the StoneX newsletter at: https://subscribe.stonex.com/fertilizer
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