Inputs Market Update: Fertilizers Build on Last Week's Gains

April 11, 2016 01:27 PM

NH3eNCRGains tallied $13.28 to Declines' $4.99 in the regional averages.

Fertilizer prices firmed this week almost across the board with the exception of UAN32% which is currently our least expensive form of nitrogen. Anhydrous ammonia firmed much less than the nearly $20 rise we noted last week as prices stayed put in Wisconsin and South Dakota. North Dakota was our only decliner in NH3, falling $2.84 per short ton. All other states posted a higher anhydrous price on the week.

P&K firmed as well and while we have been advising growers continue to wait out phosphate price strength, we have also been wary of the impacts of demand discovery on P&K prices. It has been our opinion that demand has the potential to firm prices in P&K since farmer demand has been in question. Wholesale indicators still have P&K pointed lower, but that savings may not show up until after spring demand has subsided.

PhosphateI am not ready to reverse my hand-to-mouth position on P&K just yet although if prices continue higher in next week's survey, the market will certainly have our attention.

Gains in crude oil and especially heating oil are supporting farm diesel prices. WTI crude firmed above key $40 per barrel, besting tough resistance around the $38 level. If WTI can close above $40 per barrel, market bulls will be emboldened although most experts agree a move above $45 is unlikely in the near-term. Heating oil futures are working on continuing the strong upside move observed in the front month contract on Friday, suggesting sustained strength for farm diesel prices through spring fieldwork.

Corn Futures -- December 2016 corn futures closed Friday, April 8 at $3.75 putting expected new-crop revenue (eNCR) at $588.35 per acre -- higher $10.09/acre on the week. With anhydrous priced at $599.84 this week, the eNCR/NH3 spread narrowed 3.65 points and now stands at 11.49. This means one ton of anhydrous is priced at a 11.49 premium to one acre of expected new-crop corn revenue.

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Nutrient/Fuel
3/27/16
4/4/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$573.42
$593.40
$6.44
$599.84
Anhydrous
DAP
$483.54
$481.82
$2.16
$483.98
DAP
MAP
$494.23
$495.57
$1.24
$496.82
MAP
Potash
$358.89
$356.60
44 cents
$357.04
Potash
UAN28
$271.64
$277.10
$2.76
$279.87
UAN28
UAN32
$304.85
$308.90
-$4.99
$303.90
UAN32
Urea
$371.68
$373.36
21 cents
$373.57
Urea
Farm Diesel
$1.51
$1.58
1 cent
$1.59
Farm Diesel
LP
$1.04
$1.05
2 cents
$1.07
LP
Composite
586.01
591.51
1.15
592.66
Composite

 

Spreads