Granular urea prices in the NOLA (New Orleans) region have moved higher following Hurricane Harvey. Wholesale urea prices at the Gulf averaged $224/ton for the week ending September 15; an increase of $26/ton over the past two weeks. Gulf urea prices are now $64 above the early July low of $160—which was the lowest level since 2003.
There is a seasonal tendency for Gulf urea prices to trend higher in the last quarter of the calendar year. Therefore, any price corrections from the current levels may be limited. Corn prices and expansion in corn acreage can be a supporting factor in higher nitrogen prices. With 2018 corn futures trading near $4 per bushel, some private analytical firms are forecasting an increase in U.S. corn acreage next year. In NOLA, granular urea prices are currently 22% or $41/ton higher than the comparable week last year.
DAP (diammonium phosphate) prices were also higher at NOLA last week. Florida is a key state for phosphate production. Hurricane Irma has disrupted mining activity and slowed production there. The average Gulf price last week was $325 for DAP; up $7/ton from the previous week. Global supplies of DAP are adequate and last week’s price increase may be temporary.