Despite sharp production cutbacks supplies of most fertilizers are sharply higher, with DAP and urea inventories in North America well above five-year averages at the end of October, according to industry data. Not surprisingly, prices continue to soft, as farmers remain wary about buying fertilizer and trades can't find financing for cargoes.
The only product remaining in tight supply is potash, where inventories remain relatively low, though they finally moved above year-ago levels at the end of October. Some production internationally is being curtailed as well, which could keep the pipeline tight, helping support prices.
The combination of lower natural gas prices and sharply lower ammonia prices has returned producer margins back to their normal range, after profits surged on this year's run to record prices. Ammonia prices remain soft on world markets, with one deal done around $220 a short ton out of the
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