Much For U.S) Growing Conditions Favourable in Canada: For the coming 2024 crop,
Agriculture and Agri-Food Canada (AAFC) forecasts production for all
principal field crops to rise to 94.4Mt (assuming trend yields), up ~5% Y/Y
and ~4% vs. the five and 10-year average. Growing conditions are mostly
favourable across the country with extensive rains restoring topsoil moisture.
Aggregate yield for all principal field crops is forecast to rise by 5%, with
grain and oilseed yields up 5% while pulse and special crop yields are
predicted up by 14% from last year.
Drought Expected In Eastern U.S. Corn Belt: The 90-day forecast from
the National Weather Service calls for elevated chances for above-normal
temperatures over virtually the entire U.S. through September. The Seasonal
Drought Outlook calls for drought conditions to develop from southeastern
Iowa and northeastern Missouri across the northern two-thirds of Illinois and
most of Indiana and Ohio through September.
China's Strong Potash Demand Balanced Significant Imports: China’s
MOP imports in May reached 1Mt, bringing total YTD January-May imports
to 5.68Mt, a 36% Y/Y increase. Port inventory reached 4.1Mt by the end of
February (highest since February 2020). However, the inventory has been
declining steadily and as of May-end stood at 3.1Mt, down ~1Mt from the
February peak. Note, port inventory includes stocks in bonded warehouses
(~600kt in late May). The surge in import volume coupled with decreasing
port inventory and tight supply suggests strong potash demand in China.
Egypt Urea Production Resumes At Reduced Rates: All but one of
Egypt’s urea producers now have natural-gas supply restored albeit at
reduced rates. Mopco said it was operating at around 80% capacity at two
plants. HFC and Alexfert were also at 80%. NCIC was last reported at 60%
capacity. The export price from Egypt is assessed unchanged at $355/t FOB.
China January-May DAP/MAP Exports Down 30% Y/Y: China exported
1.64Mt DAP/MAP in January-May 2024, a 30% decline from the same period
in 2023, according to updated Global Trade Tracker data. DAP/MAP exports
during the month of May alone reached 792kt, a 9% increase from the same
month of 2023. Despite the significant YTD decline in Chinese DAP/MAP
exports, volumes may pick up considerably for June-September in line with
the country’s export quota allocation.
Chinese Methanol Prices Fell Further this Week On Improved
Production: Chinese methanol spot prices fell further this week (down 3%
W/W to $297/t) on improved production from both Iran and coal-based
methanol in China. Formaldehyde and MTO prices have decreased, implying
lower affordability. Coastal stock levels are gradually improving after several
months at low levels. The U.S. spot price was stable/up in thin trade (up 1%
W/W to $351/t). EU spot prices eased (down 2% W/W to $348/t).