The NFiles | Whoa Nattie!

Posted on 11/07/2018 4:19 PM

 

  • Anhydrous is $121.4 above year-ago pricing -- higher $8.72/st this week at $521.89.
  • Urea is $74.17 above the same time last year -- off $2.02/st this week at $412.47.
  • UAN28% is $33.44 above year-ago -- lower $3.61/st this week at $255.68.
  • UAN32% is priced $53.86 above last year -- higher $13.13/st this week at $308.55.

UAN32% led gains once again this week. Iowa led gains firming $76.83 as Missouri firmed $32.90. Five states nh3 price chartwere unchanged as Indiana softened $20.30 and Minnesota fell $4.02.

Anhydrous ammonia was higher as well with South Dakota up $75.73 and Nebraska adding $29.99. Only Ohio and North Dakota were unchanged as Wisconsin posted our only decline in anhydrous, off $23.53.

UAN28% led declines in the nitrogen segment with Iowa off $24.30 and South Dakota down $2.39. Three states were unchanged as Minnesota added $12.55 and Wisconsin gained $10.25.

Urea softened with Iowa leading declines, off $53.70 and Missouri fell $32.90. Two states were unchanged as Nebraska shucked $27.62 and Michigan softened $15.13.

We talked last week about China's growing thirst for natural gas and its possible implications for fertilizer prices. The gap-and-go rally record3d on Monday has held so far this week and while the prospects for natural gas prices in light of growing Chinese demand are a concern, if the proof is in the pudding, the forecast for a dramatic drop in temperatures has trumped Chinese demand. But the two are inseparable when we look into the fertilizer price nattie gas futures chartoutlook.

While some fertilizer producers are hedged in natural gas futures, such a jolt to the upside will certainly have an impact on the cost of production -- both for fertilizer producers, and, by extension, farmers.

While it has been shown that nitrogen prices sometimes follow corn prices to the upside, natural gas pricing has a much greater impact on actual retail fertilizer prices. If natural gas prices continue higher, or even stay at this week's elevated level, it will be another factor working to support a sustained nitrogen price rally.

 

December 2019 corn closed at $4.03 on Friday, November 2. That places expected new-crop revenue (eNCR) per acre based on Dec '19 futures at $653.94 with the eNCR18/NH3 spread at -132.05 with anhydrous ammonia priced at a discount to expected new-crop revenue. The spread narrowed 6.98 points on the week.


Nitrogen pricing by pound of N 11/7/18

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Midwest Average
$0.32
$0.46 1/4
$0.45 1/2
$0.47 3/4
Year-ago
$0.24 1/2
$0.37 3/4
$0.39 1/4
$0.40

The Margins by lb/N -- UAN28% is at a 2 3/4 cent premium to NH3. UAN32% posts a 4 3/4 cent premium and urea is at a 10 1/4 cent premium to anhydrous ammonia when considered by the pound of N.


Nitrogen
Expected Margin
Current Price by the Pound of N
Actual Margin This Week
Outstanding Spread
Anhydrous Ammonia (NH3)
0
32 cents
0
0
Urea
NH3 +5 cents
46 1/4 cents
+14 1/4 cents
+9 1/4 cents
UAN28%
NH3 +12 cents
45 1/2 cents
+13 1/2 cents
+1 1/2 cents
UAN32%
NH3 +10 cents
47 3/4 cents
+15 3/4 cents
+5 3/4 cents

nitrogen indices chart

 

 

 

Add new comment