P&KToday: P&K Still on the Path Lower

Posted on 03/09/2017 10:12 AM


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

  • DAP $98.44 below year-ago pricing -- lower $4.65/st on the week to $444.12/st.
  • MAP $117.52 below year-ago -- lower $4.24/st this week to $452.67/st.
  • Potash $135.80 below year-ago -- lower $6.08/st this week to $303.16/st.
  • The average cash corn price figured in to P&K this week is $3.11 1/4 per bushel.

The national average corn basis softened 1 3/4 cent from last week to 22 1/2 cents below December futures. The national average cash corn price fell 11 cents from last week to $3.07 1/4. Basis is softer than the three-year average, which is 11 cents below futures for this week.

potashPotash was our downside leader in the P&K segment, falling $6.08 by the short ton. Price action was mixed overall but still favored price softness as led by an $18.20 decline in Iowa, Minnesota was down $17.60 as Indiana and Missouri potash each fell about ten bucks. Only Wisconsin was unchanged as Michigan firmed $2.92 and Kansas added 44 cents.

DAP was under pressure from declines in Iowa which fell $40.90 as Nebraska fell $14.40 and Missouri dropped $7.83 per short ton. Wisconsin, South Dakota and Ohio were all unchanged as North Dakota led gains firming $3.62 and Kansas firmed $2.11. Other gains and declines were within a few bucks of unchanged.

MAP fell as well, led by Minnesota which fell $27.80 along with Illinois, down $15.30 and Iowa softened $6.46. Missouri firmed $9.06 as Michigan added $1.95 to round out gains.

PhosphateMosaic Co. is in hot water in Florida after it was discovered that a sinkhole opened up at a Polk County, Florida phosphate mine. Read a post from the Tampa Bay Times about the sinkhole here. The Company alerted authorities on September 15th after having noticed the problem in late August. The sinkhole is 45 feet in diameter and may have released as much as 215 million gallons of potentially radioactive wastewater into a nearby aquifer. Since the wastewater is mildly acidic, some have speculated that long term damage may have been done to the underlying limestone, which could lead to more sinkholes opening up in affected areas.

SinkholePicIt has been reported that Mosaic Co. is cooperating with authorities and began pumping the wastewater away from the sinkhole immediately after having discovered the breech. The State of Florida has involved the Environmental Protection Agency and private environmental groups are crying "foul" as Tampa area drinking water may have been contaminated. The longer term impacts of the sinkhole and related wastewater leak are unknown, but Mosaic has a large footprint in Florida's phosphate deposits and my come under scrutiny when planning for future projects.

Perspective -- While the short-term price impacts are likely to be minimal from the Mosaic Co. sinkhole, this will be an expensive fix. The company has already set aside $630 million in a fund specifically for environmental cleanup at the behest of the EPA. Preliminary estimates for the cleanup of this specific site could be as much as $50 million, according to Mosaic Co.

Longer term, as I mentioned above, new Mosaic Co. phosphate mining projects in the state of Florida could come under closer scrutiny and residents and environmental groups may find a lawsuit has legs if the nearby aquifer and drinking water have been contaminated. That could certainly increase costs for Mosaic which would likely be passed onto the consumer. With the field of world phosphate players already thin, U.S. retail prices will be all the more tied to the price of imported phosphate.

For now, our near-term forecast is unchanged on both phosphate and potash. Phosphate carries the most upside risk of all of the fertilizers we cover, but that risk is minimal as sellers will be hesitant to scare demand away with high prices. Potash is still oversupplied and will remain a value for the foreseeable future. Stay hand-to-mouth on both 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 September 23, 2016.

DAP is priced at 46 1/2 cents/lbP2O5; MAP at 42 1/4 cents/lbP2O5; Potash is at 25 1/4 cents/lbK2O.

P&K pricing by the pound -- 9/28/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.46 1/2
$0.42 1/4
$0.25 1/4
$0.57 1/4
$0.36 3/4




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