(KANSAS CITY, MO) — Between heavy rains and hurricanes, there are some potential logistics challenges out there that could hamper fertilizer shipments down the road. For now though, according to StoneX VP of Fertilizer Josh Linville, things are ok and just need to be monitored.
In terms of any impacts from Hurricane Beryl on U.S. gulf shipments of fertilizer products, Linville says “it looks like that hurricane is gonna stay south enough it shouldn’t have any tremendous effects on any sort of fertilizer shipments or anything like that but it does act as a reminder. You know it wasn’t that long ago that we had hurricanes shoving right up into the mouth of the Mississippi River. It just takes one storm to completely disrupt that. Today, everything is doing ok. Tomorrow? Who knows.”
As far as all the heavy rain in the Upper Midwest goes, that is something that Linville says we need to keep a close eye on. “The biggest pressing issue today, it’s been the rainfall,” according to Linville. “Tons and tons of rains up north. I know here just outside the window we can see the Missouri River and she’s full. A lot of reports up and down the rivers that bottom ground is getting flooded out, probably not gonna get planted this year, not gonna have a crop on it.”
Linville continues by saying, “We started thinking about that about a week or two ago in terms of what does that mean (the rainfall) for barge shipments. Now we are finally starting to see reports on the Mississippi that some of these locks are getting closed. Now it’s a short term situation, we think it gets flushed out relatively quickly. A couple disruptions we can handle, especially this time of the year. We’re far enough removed from the fall season we can make up that time, but not if it continues to get worse.”
“If we stay on this trend and the river systems stay high and it continues to impact barges in a longer term situation, it’s a new story,” according to Linville.
Meantime, when looking at various current global factors in the fertilizer markets, Linville says nitrogen is something he is watching closely at the moment.
“Nitrogen market is getting challenged right now. India has stepped in and it looks like they are going to make a major purchase,” says Linville. “The market is expecting them to lock up one to 1.5 million tons. We’ll get the details of that early next week. The global urea markets have moved up pretty significantly but there’s a lot of signs that they could back off.”
He also adds that China could cause some issues in the global fertilizer markets. “The other biggest thing in our face right now is China. The government has stepped in, they have been reducing the number of tons of phosphate that’s getting the global markets a little bit more excited. They have also continued to put restrictions on global urea which is keeping that market very, very tightly supplied.”
“You know as big of a world it is, it really comes down to a few points that we’re watching closely,” according to Linville.
You can watch the full conversation we had with Josh Linville from StoneX on the Market Talk YouTube channel below:
