The NFiles | Shortages Reported in Northern Plains

Posted on 05/11/2018 10:57 AM

 

  • Anhydrous is 52 cents above year-ago pricing -- higher $1.16/st this week at $525.75.
  • Urea is $16.81 above the same time last year -- higher $2.45/st this week at $372.86.
  • UAN28% is $8.00 below year-ago -- higher 38 cents/st this week to $243.49.
  • UAN32% is priced $2.00 above last year -- higher $6.72/st this week at $279.36.

UAN32% led gains in the nitrogen segment this week with Illinois up $32.24, Iowa gaining $11.80 and Nebraska anhydrous ammonia price chartfirming $8.74. Four states were unchanged as only Minnesota declined, off $1.11.

Urea was led higher by Illinois which gained $21.91 as Minnesota firmed $9.76. Only Ohio was unchanged as Wisconsin fell $5.39, Kansas softened $2.49 and Michigan dropped $2.43.

Anhydrous ammonia was led higher by Minnesota, which gained $13.36 as Kansas firmed $13.16 and South Dakota was up $3.33 per short ton. Two states were unchanged as North Dakota fell $11.51, Illinois softened $10.32 and Iowa dropped $5.94.

UAN28% trailed gains but was still led higher by Minnesota, up $8.33 as Iowa gained $5.15. Two states were unchanged as Illinois fell $6.24, North Dakota softened $4.31 and Kansas was off $3.60.

North Dakota this week reports fertilizer shortages in the northern Plains, a situation adding frustration to an already problematic spring planting season in northern growing areas. An excerpt of the pres release from the North Dakota Department of Agriculture follows...urea price chart

“North Dakota, South Dakota, Minnesota, Iowa and Wisconsin utilize some of the same resources for fertilizer,” Agriculture Commissioner Doug Goehring said. “Everyone is trying to use the same trucks, facilities and manufacturers and it is creating a supply issue.”

Goehring said he has spoken with fertilizer plant managers who have said they have never experienced a shortage to this degree before. “They sympathize with their customers and feel the same level of anxiety and frustration. They are trying to find a way to supply the demand,” Goehring said. “Please be patient and understanding. They have indicated they would like to sell it if they had it.”

Of note here, the title doesn't reference North Dakota specifically, but rather reads, "Fertilizer Shortage Experienced in the Region." Note in the above excerpt, Ag Commissioner Goehring cites North Dakota, South Dakota, Minnesota, Iowa and Wisconsin as being vulnerable to the shortfall. Unfortunately, Goehring believes it could take twouan price chart weeks before supplies are rebalanced.

This will surely lead to a price response in the northern Plains and if you have not yet booked spring nitrogen, we advise you get ahold of your preferred retailer, and if prices have not already risen in your area, lock in current prices if you have not already. The press release does not specify which fertilizers are running short, but it would be wise in those areas to have your topdress and sidedress nitrogen booked -- again, that is if prices have not already risen. If they have, I would advise waiting as supply relief will force prices back down quickly. Unfortunately, it is difficult to say when that will be, and the press release gives only veiled guidance on that.

December 2018 corn closed at $4.21 on Friday May 4. That places expected new-crop revenue (eNCR) per acre based on Dec '18 futures at $673.20 with the eNCR17/NH3 spread at -147.45 with anhydrous ammonia priced at a discount to expected new-crop revenue. The spread widened 9.13 points on the week.


Nitrogen pricing by pound of N 5/9/18

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Midwest Average
$0.32 1/4
$0.41 1/4
$0.43 1/2
$0.44
Year-ago
$0.32 1/4
$0.39 1/2
$0.45
$0.43 1/2

The Margins by lb/N -- UAN28% is 3/4 cent below NH3 this week. UAN32% is at a 1 3/4 cent premium to anhydrous ammonia. Urea firmed to a 4 cent premium to NH3.


Nitrogen
Expected Margin
Current Price by the Pound of N
Actual Margin This Week
Outstanding Spread
Anhydrous Ammonia (NH3)
0
32 1/4 cents
0
0
Urea
NH3 +5 cents
41 1/4 cents
+9 cents
+4 cents
UAN28%
NH3 +12 cents
43 1/2 cents
+11 1/4 cents
-3/4 cent
UAN32%
NH3 +10 cents
44 cents
+11 3/4 cents
+ 1 3/4 cent

nitrogen indices chart

 

 

 

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