Tracking the NH3/Potash Spread

Posted on 08/06/2019 4:35 PM


  • Fertilizer prices were slightly lower with NH3 and DAP posting gains.
  • Our Nutrient Composite Index (NCI) softened 0.52 points to 620.43.

Nitrogennitrogen indices chart

  • Anhydrous ammonia was our only gainer in the nitrogen segment this week. south Dakota corrected sharply higher after falling below $500 per short ton a few weeks ago. North Dakota followed that trend but is this week priced below South Dakota. That may mean pending NH3 price strength in North Dakota. The "I" states and Missouri remain priced above $600, but as we have said before, statewide NH3 prices may not fall as low as other states on the basis of solid demand.
  • UAN solutions and urea were lower on the week although all three are priced at premium to NH3 by the pound of N.
  • 32% led the decline there falling nearly $2.50 per short ton. Minnesota, Illinois and Nebraska led declines in UAN32% with Kansas up less than $2, the only state to post a higher 32% price on the week.
  • UAN28% was off 36 cents per short ton with Michigan and Indiana leading declines. Ohio and Kansas were each mildly higher on the week.
  • Urea fell 33 cents with Nebraska falling $9.01 and Michigan off $5.68.

You should be at least 30% filled on anhydrous for fall and for spring applications, especially in areas outside the "I" states and Missouri. While prices in those states remain elevated, the upside appears to be equally as limited as the downside. We do recommend you fill fall needs before combines roll in your state so keep a close watch on your local prices using the map on the homepage, and keep reading your Inputs Monitor.

Phosphatep and k indices chart

  • Phosphate prices were mixed on the week with DAP higher and MAP softer.
  • DAP was led higher by a sharp rise in south Dakota. Michigan and Illinois led declines.
  • MAP was lower on price softness in Indiana and Nebraska.
  • According to MosaicCo., wholesale phosphate prices fell at most U.S. terminals, and ran sideways in Central Florida in the week ended August 2.
  • While phosphates remain overpriced compared to NH3, when considered on an indexed basis, both DAP and MAP are priced at a discount to UAN and urea.

We would like to see phosphate prices come down before issuing advice to purchase, and we believe there is still time for world supplies to influence U.S. retail prices lower.


  • Potash softened $2.01 on the week led by declines in Nebraska and Minnesota. Indiana led gains, firming $3.14 with Ohio up $1.45 and Iowa firming 15 cents per short ton.
  • MosaicCo. reported lower wholesale potash prices at NOLA and sideways price action in the Corn Belt during the report week.

nh3 and vitamin k trackerThe relationship between potash and anhydrous ammonia has caught our attention lately as, first, the two arrived at parity just recently, and secondly as NH3 firmed this week, seeming to want to stay coupled with our indexed potash figure. The chart at left indicates the potash/NH3 spread will at times widen. Notice the setup around January 2014 at the far left of the chart. There we see NH3 at a discount, the crossing over to a premium to potash. After having crossed over and firming to a premium, NH3 then traced a path for nearly a year very close to parity with potash.

The same setup occurred in a more subtle way beginning in January 2017 when NH3 first firmed to a premium, the fell to a discount to potash before the two joined in the middle of the range and traded together for a period. There are signs the current setup is similar. We will continue to watch this relationship, but the current setup in which NH3 first posted a hasty dip to a discount to potash in late summer 2018 before achieving a premium for a few months. This may suggest sideways price action for both.

Given that since late summer 2016, potash has acted generally as potash does -- favoring mild price action and price stability -- and in light of the very volatile price action in anhydrous ammonia from state to state -- as though our NH3 price was calibrating toward parity with potash -- we may be looking at near-term sideways price action for both. That would likely pull UAN solutions lower, but urea and phosphates have shown themselves to be far less willing to follow either potash or NH3.

Corn Futures

  • December 2019 corn futures closed Friday August 2 at $4.12 putting expected new-crop revenue (eNCR) at $681.12 per acre -- lower $7.04 per acre on the week.
  • With our Nutrient Composite Index (NCI) at 620.43 this week, the eNCR/NCI spread narrowed 6.52 points and now stands at -60.69.
Current Week
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nci price chart

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