Potash was higher on the week as phosphate softened.
- DAP $83.67 below year-ago pricing -- lower $5.88/st on the week to $481.07/st.
- MAP $112.54 below year-ago -- lower $1.93/st this week to $498.34/st.
- Potash $134.02 below year-ago -- higher 4 cents/st this week to $352.27/st.
- The average cash corn price figured in to P&K this week is $3.42 3/4 per bushel.
The national average corn basis firmed 3/4 cent from last week to 6 cents below July futures. The national average cash corn price firmed 22 1/4 cents from last week to $4.25 1/4. Basis is softer than the three-year average, which is 19 cents above futures for this week.
Phosphate prices softened to a level below expected new-crop corn revenue late last month and have continued to creep lower into June. While North American production stalls amid weak fundamentals, other producing nations around the globe are producing DAP and MAP at an aggressive pace which should limit price strength through summer.
Potash is a very similar story with North American producers fighting low prices with production cutbacks, and offshore producers churning out product at a rate designed to capture marketshare. Since potash prices have fallen to such a low level over the past several months, the downside appears to be somewhat limited. Chinese importers still have not inked a deal with producers but that decision may be based as much on supplies on hand as price projections.
China has been receiving potash via rail from Russian exporters at a fairly high rate and appear to be content enough with spot prices and downside market potential that they see no need for an annual contract. North American producers including PotashCorp have held out hope that a contract will soon be signed and have been very public in saying they believe China will make a deal soon.
North American producers badly need that contract to post a floor in the global market and stop the international price slide for the nutrient. We have suggested before that North American producers adopted an outdated strategy on P&K production and rather than working to protect marketshare have opted to try and stop the price bleed by rebalancing supplies. Since China is getting the potash it needs from Russian suppliers, a contract is not likely, and some analysts even believe potash price may fall farther from here. The suggestion by North American producers that an agrement may be reached soon is little more than window dressing for shareholders who are eyeing a dramatic global price slide in P&K.
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 June 3, 2016.
DAP is priced at 50 cents/lbP2O5; MAP at 46 3/4 cents/lbP2O5; Potash is at 29 1/4 cents/lbK2O.
P&K pricing by the pound -- 6/10/2016