P&KToday: Seasonal Demand Supports Price
P&K were higher on the week.
- DAP $98.16 below year-ago pricing -- higher $2.16/st on the week to $483.98/st.
- MAP $97.03 below year-ago -- higher $1.24/st this week to $496.82/st.
- Potash $133.95 below year-ago -- higher 44 cents/st this week to $357.04/st.
- The average cash corn price figured in to P&K this week is $3.42 1/4 per bushel.
- The national average corn basis is unchanged from last week at 1 1/2 cents above May futures. The national average cash corn price firmed 15 3/4 cents from last week to $3.75 1/4. Basis is softer than the three-year average, which is 9 cents above futures for this week.
P&K headed slightly higher this week in response to farmer demand. Phosphate prices at NOLA firmed just slightly and fell by an equal measure in Morocco, a key global phosphate producer. We have advised a hand-to-mouth approach on P&K and, as with nitrogen, we expect a summer swoon. The question now is how much support will farmer demand add to prices.
Potash still has very little reason to firm beyond local supply fundamentals. Kansas and Missouri each firmed just shy of 10 bucks on the week as Illinois K fell by that same amount. Global supplies will limit the upside, but local supplies will dictate price moves through the remainder of the spring application season.
The same will be true of phosphate. Global supply fundamentals will limit price strength but seasonal demand will trump the supply overhang. Especially here in North America where domestic producers have moved to the sidelines. Morocco and China will continue to feed the global oversupply leading us to believe summer offseason phosphate prices will fall, lending opportunities for post-harvest applications.
I reiterate our advice to contact your local preferred retailer and get a handle your local P&K supply. Areas where supplies run short will see price increases. It seems very simple, but given global P&K supplies are in a state of oversupply, the one thing that can add support to prices are supply and demand balances.
If prices firm again next week, we will likely advise to go ahead and pull the trigger on spring P&K as latecomers will be subject to price fluctuations based on supplies.
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 April 8, 2016.
DAP is priced at 50 1/4 cents/lbP2O5; MAP at 46 1/2 cents/lbP2O5; Potash is at 29 3/4 cents/lbK2O.
P&K pricing by the pound -- 4/15/2016