Inputs Market Update: Fertilizer & Diesel Tick Mildly Higher

April 25, 2016 05:02 PM

NH3Cover

Gains tallied $9.62 to Declines' 1 cent in the regional averages.

Anhydrous ammonia firmed $1.51 this week led by strength in Iowa, up $9.57 and Michigan $4.49. Declines were mild, led by Minnesota, down $3.09, Kansas down $1.07 and Nebraska shucking 28 cents per short ton. All other states were less than a few bucks higher.

UAN solutions were higher on the week with 28% up 49 cents per short ton and 32% up $4.16. Gains were led by a hike in Missouri 32% pricing, up $34.47 in the Show Me State and an increase of $8.97 in North Dakota 28%. Michigan 32% added $4.60 as Iowa, Minnesota and Nebraska firmed roughly @ and a half bucks by the short ton.

PhosphateUrea is up 23 cents regionally this week with Missouri up $6.98 and Iowa firming $4.70. All other states posted very mild gains and declines.

We booked phosphate last week. This week, DAP and MAP are higher, but only by a small amount. Phosphate gains were led by Iowa and Missouri DAP, both up about 10 bucks. Gains in MAP were led by price increases to the tune of about three-and-a-half bucks in Minnesota and South Dakota. Michigan MAP led declines in the phosphate segment, falling $8.30 per short ton on the week. Other states were within a buck or two of unchanged.

Potash ticked higher by $1.30 per short ton Missouri and South Dakota each firmed just shy of $10 as most states fell slightly.

Overall, the fertilizer segment is showing us here at roughly the midpoint Dieselof spring fertilizer demand that supplies are ample in the areas we survey. This week's price action suggests offseason prices between now and fall applications will fall at least slightly. How much will be up to global supplies and the introduction of domestic production here in the States. We expect UAN to be the last to arrive at the offseason downward price slide as sidedress will prolong demand past that of anhydrous, urea and P&K. Phosphate is still overpriced when compared to the rest of the fertilizer segment, and we see the most summertime downside potential in DAP and MAP. Potash has got to level off at some point but firmer prices are a tough case to make. In short, we expect fertilizer prices for fall applications to be at or below current prices with a downside bias.

Crude oil and heating oil futures have run off with diesel prices and we expect price support to continue until heating oil futures begin to trend lower again. The crude oil market is still quite murky, but if crude makes another bear-run, we will take advantage at an indicated regional price low. For now, demand for on farm diesel will remain high and prices are likely to continue to tick gingerly higher through spring planting.

Corn Futures -- December 2016 corn futures closed Friday, April 22 at $3.81 putting expected new-crop revenue (eNCR) at $598.43 per acre -- lower $11.77/acre on the week. With anhydrous priced at $604.10 this week, the eNCR/NH3 spread widened narrowed 13.28 points and now stands at 5.67. This means one ton of anhydrous ammonia is priced at a $5.67 premium to one acre of expected new-crop corn revenue.

-----------------------------------------------------------

Nutrient/Fuel
4/11/16
4/18/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$599.84
$602.59
$1.51
$604.10
Anhydrous
DAP
$483.98
$484.98
$1.85
$486.83
DAP
MAP
$496.82
$500.94
6 cents
$501.00
MAP
Potash
$357.04
$356.76
$1.30
$358.07
Potash
UAN28
$279.87
$279.32
49 cents
$279.81
UAN28
UAN32
$303.90
$304.71
$4.16
$308.87
UAN32
Urea
$373.57
$375.42
23 cents
$375.66
Urea
Farm Diesel
$1.59
$1.59
2 cents
$1.61
Farm Diesel
LP
$1.07
$1.06
-1 cent
$1.05
LP
Composite
592.66
594.39
2.19
596.58
Composite

 

Spreads