P&KToday: Downward Trajectory Slows

Posted on 03/09/2017 10:12 AM

 

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

  • DAP $99.08 below year-ago pricing -- lower 8 cents/st on the week to $444.04/st.
  • MAP $119.39 below year-ago -- lower $2.55/st this week to $450.13/st.
  • Potash $134.77 below year-ago -- lower $1.54/st this week to $301.62/st.
  • The average cash corn price figured in to P&K this week is $3.10 1/4 per bushel.

PhosphateThe national average corn basis softened 3 cents from last week to 25 1/2 cents below December futures. The national average cash corn price firmed 14 3/4 cents from last week to $3.22. Basis is softer than the three-year average, which is 18 cents below futures for this week.

MAP was our downside leader in the P&K segment, falling $2.55. Iowa led declines falling $20.80 as Ohio dropped $4.39 and North Dakota slid $3l.55. Just three states were unchanged as Missouri firmed $1.01 and Indiana added 81 cents per short ton.

DAP fell just 8 cents per short ton led by Illinois which fell $3.88, Minnesota $2.06 lower and Indiana down $1.30. Six of the twelve states in our survey are unchanged as Ohio firmed $7.07 and Iowa added 27 cents.

potashPotash continued lower on the week led by Iowa which fell $20.90 as Illinois fell $3.76 and Nebraska shucked $2.30. Only Wisconsin was unchanged this week as gains were led by a $4.28 hike in Michigan as Ohio added $3.80.

Downside action will likely exhaust itself in the P&K segment before nitrogen and this week's limited declines suggest that time may be coming soon. Since phosphate supplies are less robust than nitrogen and potash, the seasonal price strength we generally expect may arrive in phosphate, even if nitrogen and potash continue lower. If we do find a flat spot in the next week or two, we would expect phosphate prices to resume its downward trajectory after demand for fall applications is satisfied.

Potash is still oversupplied and while demand in China is perking up and Canpotex exporters are rumored to be negotiating with Chinese importers on price. Belarus and Russia have already put a number on potash shipments for 2016 at a price more than $100 per ton below last year's. Unclear if Canpotex will be forced to match that price for next year's shipments and for any product exported to China for the rest of this year.

That benchmark price will set the tone for price action in 2017 and each year we look to that figure for a measure of guidance. This year that contract was not signed until well into the summer as Chinese importers were waiting out price strength, collecting potash from Russia via rail hand-to-mouth. If that is the case again in 2017, it will be an indication that Chinese importers believe prices will continue to tumble, which would mean we will wait and continue booking for spring 2017 hand-to-mouth.

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 September 30, 2016.

DAP is priced at 46 1/2 cents/lbP2O5; MAP at 42 cents/lbP2O5; Potash is at 25 cents/lbK2O.

P&K pricing by the pound -- 10/7/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
 
Average
$0.46 1/2
$0.42
$0.25
Average
Year-ago
$0.57 1/4
$0.54
$0.36 1/2
Year-ago

 

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