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U.S. Nitrogen Trade Favors Urea & UAN
May. 1, 2013
As growers flip the pages on their calendars, the growing season continues to shrink. Typically, we expect more growers will opt to put more ground to soybeans rather than corn, but estimates are around 95 million acres planted to corn. Even if this estimate is low, and the weather allows plantings closer to 98 million, given strong imports of nitrogen in 2012, there is no shortage of N expected.
USDA reports nitrogen imports between July and December 2012 -- expected to be used in the 2013 crop -- at 5.47 million tons, up 7% from the same time the prior year. Meanwhile, U.S. nitrogen exports declined by 13% during that period to less than one million short tons. The result was a net increase year-over in U.S. nitrogen imports by 3%.
Historically, anhydrous ammonia has led nitrogen imports, but urea made strong gains during the second half of 2012 and overtook anhydrous. Urea imports by nitrogen content in the second half of 2012 were 54% above year-ago while anhydrous imports fell 11%. But the real story is an 846% gain in nitrogen solutions year-over... yes, 846%.
The suggestion is what we have suspected. Urea is becoming more popular here in the U.S. as world markets struggle under the weight of a global oversupply. This has moved prices lower for urea and, to a lesser degree, UAN solutions. Last year's narrow anhydrous window forced a number of growers to rethink nitrogen applications, favoring spring urea, and late season sidedress of UAN.
The sidedress season will play this out, but trends suggest an increased preference for urea. Many corn growers remain hopeful the weather will turn and allow 98 million planted acres. A 3% increase over last year's nitrogen imports give growers a little headroom, and 98 million planted acres would call for roughly a 3% increase in N consumption year-over. Nitrogen demand may fall if growers opt out of corn in response to the late start to plantings this year, but if it does not, U.S. nitrogen supplies, supplemented by strong gains in imports, will be able to fill the bill.
Source: AgWeb
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