P&KToday: P&K Trend Higher, but Potash Signals Short-term Top

Posted on 03/09/2017 10:12 AM


DAP, MAP and potash were all higher on the week.

  • DAP $60.40 below year-ago pricing -- higher $1.29/st on the week to $439.09/st.
  • MAP $75.65 below year-ago -- higher $2.41/st this week to $440.26/st.
  • Potash $64.09 below year-ago -- higher 88 cents/st this week to $316.58/st.

The national average corn basis softened 1 1/2 cents from last week to 3 1/4 cents below March futures. The national average cash corn price softened 1/4 cent from last week to $3.63 1/4. Basis is softer than the three-year average, which is 6 cents above futures for this week.

inputsmonitor.comMAP led gains in the P&K segment this week firming $2.41. Illinois led gains adding $21.06 as Indiana gained $6.20 and Iowa and Ohio each added roughly $3.50. Two states were unchanged as Michigan fell $.92 to lead declines along with North Dakota which softened $2.71 and Kansas dipped $1.13.

DAP was also higher as led by support in Ohio to the tune of $4.75, Minnesota firmed $2.99 and Wisconsin added $2.56. Three states were unchanged as only Kansas fell $1.30. No other states posted a lower DAP price this week.

Potash firmed the least of any nutrient in our survey this week, up just 88 cents per short ton. No state was unchanged as South Dakota led gains, firming $4.75, Minnesota added $2.06 and Indiana gained $1.95. Declines were mild and confined to North Dakota which fell 84 cents, Wisconsin softened 77 cents and Nebraska shucked 31 cents.

inputsmonitor.comPotashCorp released financial results this week which showed an uptick in sales volumes, but a slide in total revenues due to lower priced fertilizers during 2016. As far as our outlook goes, the report does little to change anything. Potash is due to recover and world supplies have begun to tighten after strong deliveries in the second half of 2016. But if fall demand was better than expected, that will crimp demand for spring applied potash which will limit upside risk on the basis of declines in demand.

We are also still waiting for China and India to ink potash import contracts for 2017 which will give us our global benchmark price for the year. Potash regained its position as the lowest priced nutrient in our fertilizer price survey, as UAN28% firmed. That key crossover may or may not mean something. But it comes, conspicuously, as fertilizer is sending up bullish flares across the fertilizer segment. Potash and urea turned bullish a few weeks ago, and it appears that price action was a harbinger of things to come.

In PotashCorp's report, the company noted is does not expect the same financial recovery in DAP/MAP in 2017. According to MosaicCo, wholesale phosphate values are stable, and feedstock prices are taking on a milder tone this week.

Overall, potash's bull run slowed this week which may indicate a near-term top is close, and phosphate should continue trading sideways for now. We are 50% filled on spring potash and have not yet advised to book DAP or MAP. We will probably book phosphate if the market heads higher again next week as a matter of sound risk management and good housekeeping. But even in that event, we will advise booking 50% of your spring P needs. It might be a good time to get in touch with your preferred retailer to see how they are positioned on the supply side.

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 January 20, 2016.

DAP is priced at 46 cents/lbP2O5; MAP at 41 cents/lbP2O5; Potash is at 26 1/2 cents/lbK2O.

P&K pricing by the pound -- 1/26/2017

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.26 1/2
$0.48 1/2





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