Inputs Market Update: Book N & K for 2017 Base Corn Acres

Posted on 03/09/2017 10:12 AM

inputsmonitor.com"Gains tallied $11.40 to Declines' $4.12 in the regional averages.

Our appetite for risk on nitrogen and potash has run out. We have been eyeing the present rally -- mild as it my be -- in fertilizer prices with great interest and we feel it is prudent to pull the trigger here in case the winter offseason has price increases in store for us. That is not without precedent and while fertilizer tends to be an extremely seasonal game, we believe this year has the potential to buck that trend.

We realize this puts growers who are most likely going to wait as long as possible before finalizing corn/soybean mixes for 2017 in a difficult position. Even if you are undecided about what to plant next spring, you probably have an idea of how many acres of corn will constitute your bare minimum in that ratio. We advise you target those corn acres now and let fertilizer prices in the offseason help guide you through deciding acreage mixes before spring.

inputsmonitor.comIn that way, you will have your base corn acres covered no matter what happens to corn, soybean and fertilizer prices between now and go-time. We are advising you book 50 percent of anticipated needs for spring, but that percentage should match your baseline corn acreage. In other words, if you currently anticipate a 70% acreage split favoring soybeans over corn, book the nitrogen and potash you will need for that 30% which will go to corn. On an acre-by-acre percentage, corn is likely to fall below 50% on many farms, but industry watchers believe 90 million acres will still go to corn. So fill what you need to cover your baseline corn acres at today's price.

inputsmonitor.comFarm diesel is firmer this week after having fallen slightly last week. Higher crude oil and heating oil prices are to thank for the support, and while heating oil prices are certainly going to rise in response to this week's cold snap, crude oil is firming on this Monday on the idea that non-OPEC nations will join OPEC in cutting 2017 production. We will wait to see how that pans out as the market has been head-faked before. Seasonally we do tend to find opportunities right around Christmas, so while you are booking fertilizer, it would be wise to collect a bid from your preferred diesel retailer and see if you can get an indication of your local supply and what the near term local forecast looks like.

Corn Futures -- December 2017 corn futures closed Friday, December 9 at $3.88 putting expected new-crop revenue (eNCR) at $614.92 per acre -- firmer $18.63 on the week. With our Nutrient Composite Index (NCI) at 494.76 this week, the eNCR/NCI spread widened 12.78 points and now stands at -120.19. This means one acre of expected new-crop revenue is priced at a 120.19 premium to our Nutrient Composite Index.

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Nutrient/Fuel
11/28/16
12/5/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$470.36
$471.70
$3.83
$475.53
Anhydrous
DAP
$441.73
$441.39
5 cents
$441.44
DAP
MAP
$444.85
$445.30
-$1.23
$444.07
MAP
Potash
$304.19
$305.55
$1.70
$307.25
Potash
UAN28
$226.62
$228.65
$3.02
$231.67
UAN28
UAN32
$250.72
$251.44
-$2.89
$248.54
UAN32
Urea
$316.08
$318.96
$2.77
$321.73
Urea
Farm Diesel
$1.86
$1.85
3 cents
$1.88
Farm Diesel
LP
$1.12
$1.11
Unchanged
$1.11
LP
Composite
491.44
493.35
1.38
494.73
Composite

 

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