Posted on 08/30/2018 1:09 PM

 

  • Anhydrous is $37.59 above year-ago pricing -- down $20.11/st this week at $488.09.
  • Urea is $53.62 above the same time last year -- off $1.59/st this week at $372.14.
  • UAN28% is $1.19 above year-ago -- lower $2.42/st this week at $247.53.
  • UAN32% is priced $9.54 above last year -- off $8.31/st this week at $262.00.

Anhydrous ammonia was our downside leader within the nitrogen segment this week. The Dakotas led declinesanhydrous price chart with North Dakota off $90.92 and South Dakota down $73.33.Four states were unchanged as Minnesota posted the only price gain on the week, up a dime per short ton.

UAN32% fell around half as much as did NH3 with Indiana off $35.00 and Kansas 4-bucks softer. Eight states were unchanged and no state posted a higher 32% price on the week.

UAN28% fell a few bucks this week with South Dakota off $21.24 and Kansas down $7.88. Seven states were unchanged as Michigan posted the only gain on the week, up $3.51.

Urea followed the rest of the nitrogen segment lower falling $1.59 this week. North Dakota dropped $27.90 as South Dakota softened $9.34 and Nebraska shucked $5.16. Three states were unchanged with Missouri up $15.05 and Michigan gaining $9.55 to limit the overall downside.UAN32% price chart

After recent price action in the nitrogen segment, this week comes as a welcome reprieve. We have held on to our forecast for lower harvest prices, and with harvest working its way northward, that forecast is finally playing out. The price softness in the Dakotas is notable as we reported shortages last spring in that region. That prompted dealers to order late-season product to fill demand. That did a couple things to pressure prices in that area.

The first is the timing of those refills which likely came after much of the retail industry had its needs filled. That likely led to a lower wholesale price tag. The other also relates to the timing of those orders. As the nitrogen application season came to an end, many dealers were likely dealing with a nitrogen surplus.

I would advise our readers in the Dakotas, Minnesota and Nebraska to cover some nitrogen needs and reward urea price chartthis price break. check with your preferred retailer in those states.

For the rest of the Midwest, we still advise a wait-and-see approach to booking fall nitrogen. But we must be careful not to let the offseason get away from us. This year is shaping up to feature an early harvest in most parts of corn country, and that will bring nitrogen demand to the market earlier. While i do expect nitrogen prices to continue lower through the next few weeks, be ready for an advice alert from your Inputs Monitor should we catch wind of a pending nitrogen price rally.

December 2019 corn closed at $3.92 on Friday August 24. That places expected new-crop revenue (eNCR) per acre based on Dec '19 futures at $655.67 with the eNCR18/NH3 spread at -147.47 with anhydrous ammonia priced at a discount to expected new-crop revenue. The spread widened 5.68 points on the week.


Nitrogen pricing by pound of N 8/29/18

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Midwest Average
$0.29 3/4
$0.41 1/4
$0.44
$0.41 1/4
Year-ago
$0.27 1/2
$0.35 1/2
$0.44
$0.39 1/2

The Margins by lb/N -- UAN28% is at a 2 1/4 cent premium to NH3. UAN32% posts a 1 1/2 cent premium and urea is at a 6 1/2 cent premium to anhydrous ammonia when considered by the pound of N.


Nitrogen
Expected Margin
Current Price by the Pound of N
Actual Margin This Week
Outstanding Spread
Anhydrous Ammonia (NH3)
0
29 3/4 cents
0
0
Urea
NH3 +5 cents
41 1/4 cents
+11 1/2 cents
+6 1/2 cents
UAN28%
NH3 +12 cents
44 cents
+14 1/4 cents
+2 1/4 cents
UAN32%
NH3 +10 cents
41 1/4 cents
+11 1/2 cents
+1 1/2 cents

nitrogen indices chart

 

 

 

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