Nutrien Sees Good Fertilizer Application Rates in U.S., Brazil, Australia — Commodity Comment
By Matt Walker
Nutrien Ltd. says agriculture markets in the U.S., Brazil and Australia have been supportive for fertilizer.
On agriculture markets:
Nutrien expects U.S. corn plantings of approximately 90 million acres in 2024 and soybean plantings of approximately 87 million acres. U.S. planting progress is in line with historical average levels and fertilizer application rates have been strong. Wet weather has recently delayed planting progress and fertilizer application in the Corn Belt.
Brazilian growers are finalizing their soybean harvest, and favorable weather conditions resulted in safrinha corn planted area exceeding initial expectations, Nutrien said. Soybean margins are expected to improve from the compressed levels in 2023 and support growth in planted acreage and crop input demand in the second half of 2024.
Australian soil moisture conditions vary regionally but remain supportive for this upcoming growing season and the Indian monsoon is projected to produce average to above-average precipitation, supporting yield potential and grower demand for crop inputs, according to the company.
On crop nutrient markets:
Global potash supply and demand has been relatively balanced as increased shipments have been required to meet historically strong demand in the first quarter. "We have maintained our 2024 full-year potash shipment forecast of 68 to 71 million (metric) tons," Nutrien said.
"We are seeing strong potash demand in North America for the spring application season as channel inventories were tight to start 2024. Potash demand in Southeast Asia has been supported by lower inventory levels compared to the prior year and favorable economics for key crops such as oil palm and rice. China's potash imports remained strong in the first quarter of 2024 supported by a step-change in domestic consumption but are expected to decline on a full-year basis compared to the record levels in 2023."
Global nitrogen markets have fluctuated in 2024, driven by seasonal buying patterns, production outages and uncertainty over Chinese urea export restrictions and India's urea import requirements, Nutrien said. The U.S. nitrogen supply and demand balance remains relatively tight, in particular for ammonia and UAN, with net nitrogen imports down 21% on a fertilizer year basis compared to the historical average.
"Phosphate fertilizer prices remained firm through the first quarter of 2024 due to strong demand in the Northern Hemisphere, supportive Indian DAP purchases, Chinese export restrictions and production outages. Prices have softened in the second quarter driven primarily by lower seasonal demand."
On operational guidance:
Retail adjusted EBITDA guidance of $1.65 billion to $1.85 billion reflects expectations for increased crop nutrient sales volumes and margins for Nutrien's North American business in the first half of 2024 and improved crop input margins in Brazil during the second half of the year. Guidance assumes a full year of earnings from our retail assets in Argentina, Chile and Uruguay.
Potash sales volumes guidance of 13.0 million to 13.8 million tons assumes a more even split between first- and second-half volumes compared to the prior year. Nitrogen sales volumes guidance of 10.6 million to 11.2 million tons assumes higher operating rates at our North American and Trinidad plants and growth in sales of upgraded products such as urea and nitrogen solutions.
Write to Matt Walker at matthew.walker@wsj.com