Inputs Market Update: Key Nutrients Bottoming

Posted on 03/09/2017 10:12 AM

Gains tallied $3.52 to Declines' $11.10 in the regional averages.

Urea"Fertilizer prices were generally lower, but the nitrogen segment was mixed with UAN28% and urea each ticking higher. It is clear from the opinions of market watchers and actual wholesale prices at import terminals that the floor has been set for urea prices. Increases in urea were very mild, but pervasive as 10 of the 12 states in our weekly survey were unchanged or higher on the week. Expect urea prices to climb between now and springtime.

UAN28% price action was similar as 9 states were higher or unchanged with Minnesota down $3.06 and North Dakota down 38 cents per short ton. While market sentiment is harder to pinpoint here, strength in urea will likely give UAN solutions a price lift. There is also a growing trend for farmers to mix UAN28% with preplant cocktails, adding a measure of near-term upside risk in UAN28%. The time to book urea and UAN is here as our appetite for risk has run dry ahead of UANspring planting. UAN32% has been overpriced compared to the rest of the segment so we expect a lag between 28% and 32%, although we will keep a close eye in the raw influence of urea on 32% prices.

Anhydrous ammonia keeps trailing lower and while we believe NH3 will turn higher ahead of spring, so far, we are awaiting a "V" bottom before we pull the trigger to ensure the downside is exhausted.

Farm diesel popped 2 vents higher this week, a trend we expect to continue through the end of spring fieldwork. We advised last week subscribers book 100% of spring/summer farm diesel needs at current prices. Click here for the rundown on that.

Phosphate and potash are each projected lower although production cutbacks announced by U.S. phosphate manufacturers earlier this month may support DAP and MAP prices by spring. Potash prices have yet to set the floor, but global oversupply will FarmDieselcontinue to pressure prices. Based on observations of the wholesale markets, retail potash may have another $10 per short ton to fall before exhausting the price falloff.

To summarize, book farm diesel before it gets away from us. Expect an official advice ALERT from us to book urea and UAN28% this week. I want a chance to really dig into the numbers and the outlook before I issue blanket advice to book all our crop nutrient needs for spring, including anhydrous. Stay tuned to your inputsmonitor.com, watch your email for an ALERT and be prepared to get your checkbook out as key nutrients appear to be bottoming at these prices.

Corn Futures -- December 2016 corn futures closed Friday, February 26 at $3.78 putting expected new-crop revenue (eNCR) at $593.39 per acre -- lower $8.41/acre on the week. With anhydrous priced at $562.53 this week, the eNCR/NH3 spread widened 10.73 points and now stands at -30.86. This means one acre of expected new-crop corn revenue is priced at a $30.86 premium to one ton of anhydrous ammonia.

-----------------------------------------------------------

Nutrient/Fuel
2/15/16
2/22/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$580.85
$565.25
-$2.72
$562.53
Anhydrous
DAP
$494.44
$489.33
-$4.01
$485.32
DAP
MAP
$506.01
$496.13
-62 cents
$495.51
MAP
Potash
$375.90
$369.63
-$3.08
$366.54
Potash
UAN28
$273.55
$268.36
$2.56
$270.92
UAN28
UAN32
$308.65
$303.26
-67 cents
$302.59
UAN32
Urea
$365.39
$360.16
94 cents
$361.10
Urea
Farm Diesel
$1.43
$1.43
2 cents
$1.45
Farm Diesel
LP
$1.01
$1.01
Unchanged
$1.01
LP
Composite
594.90
584.38
-1.04
583.34
Composite

 

Composite


 

 

 

 

"

Add new comment