World supply-demand outlook
Crop conditions around the world (at a glance)
Wheat
In the northern hemisphere, spring wheat harvesting is wrapping up with poor conditions in Canada, the US, and China. In the southern hemisphere, there are ongoing dry conditions in Argentina and Australia.
Maize
In the southern hemisphere, conditions are mostly favourable with exceptional outcomes expected in Brazil for the larger season crop. In the northern hemisphere, conditions remain mixed as harvesting ramps up.
Rice
In China, recent rains improved vegetation in the south and southwest. In India, the Kharif harvest begins with concern for below-average monsoon rains in the south. In Southeast Asia, conditions remain favourable except in Thailand.
Soybeans
In the northern hemisphere, harvesting begins under mixed conditions with dry and hot weather in the US, Romania, the Russian Federation, and China.
International prices
Wheat
The GOI wheat sub-Index touched a two-year low in early September and averaged 1% lower month-on-month. However, trends were two-sided as pressure from sustained Black Sea competition contrasted with tightening supply prospects, notably for high protein wheats. Tight Gulf logistics contributed to firmer US quotations, while Australian values drew support from dwindling local production forecasts. EU prices were buoyed by renewed buying by China. Bucking trends at other origins, the Russian Federation's quotations for private business declined, with more talk that the unofficial price floor was only applicable to public tenders.
Maize
Following seven consecutive monthly losses, average world maize export quotations strengthened in September; the GOI sub-Index rebounding by 7%.
US quotations worked higher, boosted by tightening nearby Gulf loading capacity and complications caused by low water levels along Midwest rivers.
Values in Brazil increased on solid overseas demand, slow country movement and difficult logistics in southern areas.
Values in Argentina were similarly firm on slow farmer selling interest, competition from domestic consumers and concerns about dry planting weather.
Rice
Supported by earlier restrictions on Indian exports, average global rice prices were stronger in September, with the GOI sub-index up by 2% month-on-month.
However, gains were pared by subdued international demand, with some buyers reluctant to conclude purchases at current prices.
Currency movements weighed on dollar-denominated offers in Thailand, while Vietnamese quotes were little changed amid slow activity ahead of tenth-month crop arrivals.
Seasonal pressure was also seen in Pakistan, albeit quotes were supported by an uptick in buying interest amid competitive prices. In India, parboiled quotes were firmer, in the wake of the imposition of a 20% export duty.
Soybeans
Average world soybean prices were 2% weaker monthon-month. US values eased on tepid overseas demand amid stiff late-season competition from Brazil.
Seasonal pressure also featured as local harvesting got underway, albeit as worries about yields offered support. Softer soya product values, most notably soya oil, added to the negative tone.
Quotations in Brazil eased, as seeding of the 2023/24 crop got underway amid early outlooks for another bumper crop.
In Argentina, a renewed preferential exchange rate scheme saw an uplift in farmer selling, albeit as tight supplies continued to underpin prices.
Fertilizer outlook
Major market developments
Fertilizer prices were mostly up in September along with prices for main fertilizer inputs. Price movements for several fertilizer categories were influenced by strength in the Indian market and uncertainty around exports from China. Market developments in the near term will be impacted by these two major actors as well as by demand for the fall application season in the Northern Hemisphere.
Fertilizer input prices increased in September.
In the case of natural gas, the previous concerns on liquified natural gas (LNG) exports out of Australia have dissipated but extensions of the maintenance schedule for plants in Norway supported European gas futures. Markets should be focused on monitoring stock levels in Europe, currently near capacity. Following an upward trend that started in August, ammonia prices surged in September, supported by major plant outages, while buyers showed unusually strong interest during this normally rather quiet time of the year.
Nitrogen fertilizer prices increased in September. Urea price increases were driven by uncertainty around the Chinese export levels, as authorities limited the distribution of export licenses to control domestic pricing. In this context, the unexpected purchase tender of Indian Potash Ltd. (IPL) on 15 September also provided support. Developments in China and India will continue shaping market sentiment in other nitrogen markets around the globe.
Phosphorus fertilizer prices increased in several major markets with particular strength in the Indian market and uncertainty around export restrictions from China linked to the customs inspection process. On the other hand, the earthquake in Morocco did not trigger major supply issues as initially anticipated. Current discussions on the nutrient-based subsidy rates in India are a major factor to watch, while demand is slow in Brazil and uncertain in the United States in view of the phosphate to grain price ratio that will determine application rates in the fall.
Potash prices in major importer Brazil were down slightly in September due to abundant availabilities. Global values show signs of stability.