Market Update May 2024
Over the span of three months we’ve seen conditions go from extremely wet, to somewhere between dry and extremely dry, depending on where you live. It’s a great reminder that the country we live in and its weather are both unpredictable, and this presents one of the great challenges to being involved in agriculture.
In some regions this dry spell has seen subsoil moisture disappear whereas others in the East of our network have retained some of this moisture to have some confidence heading into the season. Sowing has well and truly started for most of you and there is plenty of dust in and around the regions at the moment to confirm this point!
Chemical Pricing
On the chemical front it’s been quite uneventful with good supply of most products for sowing. The dry sowing has meant that there have been a few agronomic changes primarily with glyphosate being switched out for paraquat. If it remains dry, please make sure you stay ahead of your paraquat requirements as local demand is high.
Pricing wise overseas things continue to be flat. China continues to be well stocked with key actives so whilst products like glyphosate and paraquat have lifted off their bottoms they have both stopped increasing. Moving forward this pricing will fluctuate with world demand. Whilst China is keen to move stock and they are selling close to their cost so there’s not much more downward pressure visible yet. There’s no need to make any rapid decisions on the big two actives and we will keep you updated if things change.
Post-em products are starting to move as growers are getting organised and the good news is prices are lower across the board compared to last season. These price drops continue with fungicide pricing which will help keep chemical input costs lower this season.
Fertiliser Pricing
In the previous month, we anticipated a downward trend in global urea values, but the timing and severity of the decline even surpassed our expectations.
Despite not yet reaching the usual Northern Hemisphere summer lull in demand, prices have already begun to decrease significantly. However this doesn’t necessarily mean that prices won’t go lower. The big question remains what Urea strategies Urea manufacturers might employ to counteract this trend down.
We maintain the belief that international urea values will face pressure in the short term due to ongoing production, the ‘possible’ return of Chinese exports and a general lack of demand. The watch out lies in what action manufacturers take to combat falling prices such as temporarily halting production for maintenance etc. If enough manufacturers announce shutdowns it could impact supplies and help stabilise prices, albeit temporarily.
In recent months we have written a lot about China (Phosphates included) and the Chinese government potentially reversing its stance on exports. Global SOH was nearing normal levels, the Chinese domestic prices had dropped substantially and domestic manufacturers were keen to re-enter the export market. With these factors at play it looked like they were going to start exporting again however that position seems to have changed once again. Given China’s huge role in the global export landscape, it’s crucial to monitor the situation closely. If exports are halted it would result in price moving back up and conversely if exports resume at historical levels expect more downward pressure on price.
After last year supply is always in the back of our minds… However 2024 has been different, we have seen a lot of Nitrogen going out much earlier in programs this year than we have ever seen. Combined with dry conditions locally, a somewhat ‘stable’ Middle East (if there is such a thing) and the Australian dollar moving up above $0.66 at the time of writing, there doesn’t appear to be any rush to lock in tonnes at the moment. This can and more than likely will change quickly – a decent rainfall event, China etc will be all it takes.
If we can help you with getting product dropped out to your farm this sowing season please get in touch with one of the team. At the same time if you need assistance with the next season of post emergent product, our team are starting to get customers organised early so they are prepared. We appreciate your support this season and hopefully the skies open before you read our next market update!
