Inputs Market Update: NPK Downtrend Alive and Kickin'

Posted on 03/09/2017 10:12 AM

NH3"

Gains tallied $1.54 to Declines' $43.42 in the regional averages.

Anhydrous ammonia was our downside leader in this week's price action, falling $12.55 per short ton. Wisconsin posted strong corrective declines as Kansas fell $27.92 and Illinois softened $10.51. UAN32% was not far behind NH3, falling $12.15 on the week. Ohio 32% fell $80 per short ton; Wisconsin is down $12.24 as Illinois fell $16.60. Urea rounds out the top three decliners with a $7.34 downward turn. No state posted a firmer urea price this week and many fell 10 bucks or more. UAN28% was our only higher price this week. Support for 28% was found in Missouri where the statewide price firmed $42.11 per short ton.

phosphatePhosphates were lower with DAP driven $3.18 lower overall by a $20.70 decline in Ohio. MAP fell $26.40 in South Dakota, pressuring MAP $3.75 lower regionally. Gains were limited to Nebraska MAP which firmed $3.14, and a slight pop in Indiana DAP. Potash prices were all unchanged to lower on the week with Wisconsin leading the way down, falling $16.19 as Illinois shucked $9.48 per short ton.

Fuels were unchanged. Farm diesel is expected to come under mild pressure near term as WTI crude oil futures could not decided in Monday afternoon trade which side of $40 per barrel it wanted to reside on. Heating oil futures also started the week with a softer tone and our heating oil spread analysis suggests lower farm diesel ahead.

Propane is unchanged as well and we will likely issue official advice to pull the trigger on winter propane later this week.

dieselAs far as fall fertilizer goes, If you find a sub-$500 bid for anhydrous book at least some of your needs for fall. We expect prices to decline for another few weeks, but the depth of those declines remain to be seen. As corn futures dip, fertilizer prices are staying one step ahead, but if harvest hedge pressure is a major weight on futures prices, the premium new-crop revenue holds to fertilizer prices will quickly dissolve. We do also see the potential for demand-based support around harvest and we will look for early indications of a market bottom before pulling the trigger.

Phosphate price action this week is encouraging and while it will take some time to narrow phosphate's premium to nitrogen, we expect phosphate and potash to fall during the summer months as well.

Corn Futures -- December 2017 corn futures closed Friday, July 29 at $3.72 putting expected new-crop revenue (eNCR) at $583.31 per acre -- lower $1.68/acre on the week. With our Nutrient Composite Index (NCI) at $563.43 this week, the eNCR/NCI spread softened 6.90 points and now stands at -19.88. This means one acre of expected new-crop revenue is priced at a 19.88 premium to our Nutrient Composite Index.

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Nutrient/Fuel
7/18/16
7/25/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$567.35
$563.14
-$12.55
$550.59
Anhydrous
DAP
$474.34
$469.21
-$3.18
$466.03
DAP
MAP
$486.47
$482.41
-$3.75
$478.66
MAP
Potash
$340.20
$338.82
-$4.45
$334.37
Potash
UAN28
$275.44
$273.21
$1.54
$274.75
UAN28
UAN32
$299.51
$297.89
-$12.15
$285.74
UAN32
Urea
$352.41
$351.66
-$7.34
$344.32
Urea
Farm Diesel
$1.87
$1.83
Unchanged
$1.83
Farm Diesel
LP
$0.98
$0.98
Unchanged
$0.98
LP
Composite
575.89
572.01
-8.58
563.43
Composite

 

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