Inputs Market Update: Nitrogen Pulls Fertilizer Composite Lower

Posted on 03/09/2017 10:12 AM

UAN"Gains tallied 63 cents to Declines' $12.05 in the regional averages.

Declines held the clear advantage over price gains in this week's survey and with planting nearing completion, demand for preplant fertilizers must surely have dried up. Urea posted our sharpest decline in the regional averages falling $2.93 by the short ton followed closely by anhydrous ammonia, down $2.89 on the week.

Phosphate was our only source of strength on the fertilizer side, but both DAP and MAP were up less than a half-dollar. If demand for preplant nitrogen has run out, forcing the N segment lower, phosphate demand is likely at its end as well. Kansas and Nebraska post our largest increases in DAP with Kansas up $11.83 and Nebraska up $8.18. MAP was supported by increases in Kansas, up $3.62, and South Dakota, up $2.73 per short ton. From state to state, gains and declines basically offset each other although more states were lower on phosphate this week than higher.

PhosphateDemand for phosphate was a big question for retailers coming into the planting season, and that may have resulted in inventories on hand at slightly lower levels than demand rich periods which may account for the late season price strength. It is also important to remember North American phosphate producers have managed supply/demand balances alongside their cost structure very well which also contributes to a higher phosphate price.

Potash fell $1.53 on strong global supplies and downside action in North Dakota -- down $10.50 on the week. Potash may have bottomed here but we are still anxiously awaiting word that Chinese importers have set a contract price. For the time being, it appears the Chinese, who typically set the floor price for global potash prices, are content to stay hand-to-mouth for the time being. Executives from Canada's PotashCorp have said publicly they expect a contract to be signed in the next few weeks, but those agreements are usually done by the time preplant applications begin in America. If the price China agrees to is surprisingly high, we will likely advise users to book a portion of fall potash.

DieselDiesel continues to firm, up 4 cents per gallon this week. Minnesota is up 12 cents, and Michigan and Nebraska each firmed 7 cents as other states were 1-3 cents higher or unchanged. No state except for Illinois -- down 6 cents -- posts a lower farm diesel price this week. Expect farm diesel to continue mildly higher near-term.

On the propane side, we are unchanged as Illinois and Michigan traded gains and declines and all other states were unchanged.

Corn Futures -- December 2016 corn futures closed Friday, May 27 at $4.13 putting expected new-crop revenue (eNCR) at $652.22 per acre -- higher $23.53/acre on the week. With anhydrous priced at $602.71 this week, the eNCR/NH3 spread softened 26.42 points and now stands at -49.51. This means one acre of expected new-crop revenue is priced at a $49.51 premium to one ton of anhydrous ammonia.

*For the first time, the chart below this week's pricing table features our Nutrient Composite Index compared to expected new-crop revenue from January 2013 to the present day.


Week-over Change
Current Week
-44 cents
82 cents
-21 cents
11 cents
86 cents
-70 cents
Farm Diesel
5 cents
Farm Diesel
-2 cents








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