Inputs Market Update: Fertilizer Demand on Borrowed Time

May 23, 2016 01:31 PM

 

PotashGains tallied $1.84 to Declines' $2.51 in the regional averages.

Fertilizer prices were lower but generally very flat this week as corn planting continues. We expect the end of preplant and even some sidedress activity to be marked by a down week across the board for fertilizers. This week DAP, potash and UAN28% are all higher. DAP and potash demand may have been a little higher in areas where applications are still underway although delays due to the weather have been widely scattered and variable around the Corn Belt. The same can be said of our upward price leaders... scattered and variable.

As we have said before, UAN will find support from late-season N applications and may be the last to post declines as demand will continue into summer. Crops have begun to emerge in central Iowa and some early planted corn is already getting a shot of post-emerge nitrogen. Areas farther south may already have the majority of sidedress activity wrapped up, but there are still areas where corn planting has dragged to a halt due to soggy field conditions.

NH3Crude oil softened slightly in today's market action, but remains well above $45 per barrel. Meanwhile, our heating oil/farm diesel spread suggests diesel will continue higher for at least a little longer. Through summer, farm diesel may set back on declining agricultural demand and we will be looking for opportunities to book for fall as we expect fall prices to come in slightly above today's.

Corn Futures -- December 2016 corn futures closed Friday, May 20 at $3.99 putting expected new-crop revenue (eNCR) at $628.69 per acre -- higher $1.68/acre on the week. With anhydrous priced at $605.60 this week, the eNCR/NH3 spread softened 2.12 points and now stands at -23.09. This means one acre of expected new-crop revenue is priced at a $23.09 premium to one ton of anhydrous ammonia.

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Nutrient/Fuel
5/9/16
5/13/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$605.75
$606.04
-44 cents
$605.60
Anhydrous
DAP
$489.52
$485.68
82 cents
$486.50
DAP
MAP
$502.69
$500.34
-21 cents
$500.13
MAP
Potash
$357.69
$353.65
11 cents
$353.76
Potash
UAN28
$283.02
$281.72
86 cents
$282.58
UAN28
UAN32
$311.92
$310.89
-$1.14
$309.76
UAN32
Urea
$377.45
$378.90
-70 cents
$378.19
Urea
Farm Diesel
$1.69
$1.73
5 cents
$1.78
Farm Diesel
LP
$1.01
$1.01
-2 cents
$0.99
LP
Composite
601.47
599.18
-0.13
599.05
Composite

 

Spreads