The NFiles: NH3 Unwilling to Follow Urea Higher

Posted on 03/09/2017 10:12 AM

 

  • Anhydrous is $130.03 below year-ago pricing -- lower $1.67/st this week at $472.73.
  • Urea is $100.38 below the same time last year -- higher $5.55/st this week to $335.50.
  • UAN28% is $55.25 below year-ago -- lower $1.24/st this week to $225.47.
  • UAN32% is priced $62.87 below last year -- higher $2.88/st this week at $250.65.

inputsmonitor.com"Anhydrous ammonia fell $1.67 on the week to lead nitrogen segment declines. Michigan led to the downside, falling $13.66. Indiana shucked $10.98 as Minnesota dropped $8.56. Wisconsin and Ohio were unchanged as Missouri firmed $13.41, North Dakota added $6.79 and South Dakota fell $1.11 per short ton.

UAN28% followed NH3 lower falling $1.24 by the short ton. Missouri led the way downward falling $10.19 as Wisconsin fell $5.48 and Iowa shaved off $3.94. Only North Dakota was unchanged as Illinois firmed $4.21, South Dakota added $3.80 and Michigan firmed $3.14.

inputsmonitor.comUrea led gains in the nitrogen segment firming another $5.55 on the week. Missouri led urea higher firming $33.02 on the week as Iowa added $12.26 and South Dakota firmed $8.49. No states were unchanged on urea as declines were limited to a $4.09 price cut in Ohio and a $3.41 cut in Indiana.

UAN32% followed urea this week, firming $2.88. Six of twelve states came in unchanged this week as Indiana led to the upside firming $24.09, Michigan added $7.87 and Illinois firmed $3.89. Kansas fell $2.69 and Nebraska softened $1.99.

inputsmonitor.comFor now, cover 50% of the nitrogen and potash you will need for corn acres if you already have your total acreage mix decided. If you have undecided acres, book 100% of what you will need to cover those guaranteed corn acres, and wait for direction for the remaining, undecided acres from the corn, soybean and fertilizer markets later on.

December 2017 corn closed at $3.80 on Friday, December 30. That places expected new-crop revenue (eNCR) per acre based on Dec '17 futures at $601.37 with the eNCR17/NH3 spread at -128.64 with anhydrous ammonia priced at a discount to expected new-crop revenue. The spread widened 8.45 points on the week.

Nitrogen pricing by pound of N 1/4/17

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Midwest Average
$0.29 1/4
$0.37 1/2
$0.40
$0.39 1/4
Year-ago
$0.37
$0.48 1/2
$0.50
$0.48 1/2

 

The Margins -- UAN32% is at parity with NH3. Urea is 2 1/4 cents above anhydrous ammonia; UAN28% solution is priced 1 1/4 cents below NH3.

Nitrogen
Expected Margin
Current Price by the Pound of N
Actual Margin This Week
Outstanding Spread
Anhydrous Ammonia (NH3)
0
29 1/4 cents
0
0
Urea
NH3 5 cents
37 1/2 cents
7 1/4 cents
2 1/4 cents
UAN28%
NH3 12 cents
40 cents
10 3/4 cents
-1 1/4 cents
UAN32%
NH3 10 cents
39 1/4 cents
9 1/2 cents
0

 

inputsmonitor.com

 

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