P&KToday: Make the Market Prove It

Posted on 03/09/2017 10:12 AM


DAP, MAP and potash were all lower on the week.

  • DAP $104.91 below year-ago pricing -- lower $5.00/st on the week to $465.91/st.
  • MAP $117.19 below year-ago -- lower $5.73/st this week to $472.93/st.
  • Potash $146.41 below year-ago -- lower $5.61/st this week to $328.76/st.
  • The average cash corn price figured in to P&K this week is $3.28 per bushel.

The national average corn basis softened 2 3/4 cents from last week to 2 1/2 cents below September futures. The national average cash corn price firmed 5 cents from last week to $3.27 3/4. Basis is softer than the three-year average, which is 34 cents above futures for this week.

Phosphate1This week, DAP, MAP and potash all fell roughly 5 bucks by the short ton. DAP softened the least at 5 bucks even. Declines here were led by Missouri, down $20, Minnesota, down $16.64 and Michigan which fell $13.30 on the week. All three "I"states posted a lower price as four others were unchanged. Kansas posted our only gains in DAP this week, firming a hefty $20.96. On an indexed basis, DAP is very close to our expected new-crop revenue figure and has all-but corrected its overpriced condition. Without significant near-term gains in DAP pricing, even a mild sustained corn futures rally will make DAP even more affordable although it is too soon call DAP a value buy.

potashMAP led the P&K segment's declines this week falling $5.73 by the short ton. Compared to expected new-crop revenue, MAP is wildly overpriced -- enough so that I decided to revisit my calculations for indexing MAP. Turns out, my math is sound and MAP is, indeed priced well above expected new-crop revenue in an indexed basis.

MAP was led lower by Missouri which fell $28.00 by the short ton and Kansas and Michigan which are down 5 & 6 bucks respectively. Part of the pressure on this week's MAP price was due to Wisconsin which has not posted a MAP bid for quite some time. Wisconsin forwarded it's bid at $419 per short ton -- quite a ways below our regional average price of $472.93. Minnesota led gains firming $12.11 as North Dakota and Nebraska each firmed 7-and-a-half bucks. Ohio and Indiana are unchanged on the week.

NCIPotash fell $5.61 regionally led by Michigan, down $24.70, Missouri, down $16.40 and Illinois, down $14.10. Gains were limited to just slight increases in Wisconsin, Minnesota and Nebraska with only Ohio unchanged.

Perspective -- As with nitrogen, we take last week's price pause with a grain of salt. Looking back, it has not been uncommon for fertilizers to post a pre-harvest pause before continuing lower. On average, our Nutrient Composite Index has ticked higher in September and October before sliding lower until mid-January. Since harvest is a bit ahead of schedule this year, last week's pause may be the seasonal headfake we see each year. We expect price to continue to fall, but will be wary as DAP and potash are already priced so low. Stand pat on P&K for fall --although potash should be considered a value even if it continues to fall. We want the phosphate market to prove the floor is in before we make a move.

By the Pound --

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended August 12, 2016.

DAP is priced at 48 cents/lbP2O5; MAP at 44 1/4 cents/lbP2O5; Potash is at 27 3/4 cents/lbK2O.

P&K pricing by the pound -- 8/18/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.44 1/4
$0.27 3/4
$0.59 1/2
$0.39 1/2




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