Limited carryover inventories from the fall and higher spring demand are poised to support the US MOP market in early 2020.
Retailer inventories are estimated low throughout the US, despite another lackluster post-harvest application period, because of reduced imports from Canada.
Argus estimates total imports in 2019 will decline by up to 22pc on lower shipments from Canada, which was enough to offset an estimated 8pc increase in imports to Nola compared to the prior year.
Higher crop acreage is expected to boost potash demandby up to 6pc from 2019 to 2.4mn st in 2020, according to Argus estimates. The industry estimates corn acreage of up to 95mn acres in 2020 — about a 5mn acre increase from 2019.
The combination of tight downstream warehouse stocks and increased demand stemming from an expected bumper corn crop is supportive of price recovery ahead of spring applications, a stark pivot from the second half of 2019. Delays in the corn and soybean harvests drove concerns for a narrowed fall application window in 2019, contributing to a $61/st price drop in Nola barge values by mid-December compared to the same period a year ago.
Market participants expect winter fill programs will arrive at a slight discount to summer fill after barge values declinedduring the second half of 2019, the programs are expected to incentivize buyers to lock in product for the spring.
The effects on domestic values from an estimated 1mn t of demand-led global production cuts in the second half of 2019 remain to be seen. But the supply-side correction should help prevent further price slippage prior to a demand resurgence in 2020.
By Jasmine Davis
