Inputs Market Update: UAN Falls Back

March 28, 2016 04:04 PM

UANGains tallied $12.38 to Declines' $18.14 in the regional averages.

Fertilizer prices fell this week after firming slightly last week. UAN led nitrogen declines as NH3 and urea firmed. Meanwhile DAP, MAP and potash are all lower on the week. North American phosphate production has not yet perked up and we expect prices to continue at least mildly lower before bottoming in response to spring demand. Global phosphate production has been at the top end of capacity in Russia, Morocco and China. That will keep the United States a net importer of phosphate for the time being, but we expect the global supply build will pressure U.S. prices.

UAN prices encountered price pressure as early spring demand was put on hold for cool weather, and by lower wholesale values. But we fully expect UAN to respond willingly to farmer demand and firm into spring. By the time we get past sidedress season we expect more fertilizer price pressure on nitrogen, phosphate and potash.

DieselHigher crude oil prices and demand for spring fieldwork put a floor under farm diesel in late February. We expect prices to continue to firm and for higher priced feedstock crude oil to begin to show up in diesel prices. Firmer crude oil prices will encourage drillers, but will force refiners to raise finished fuels prices to make up for the higher WTI bid. Again, as with fertilizer, we expect farm diesel for soften slightly after spring fieldwork, but we still maintain the 2016 price floor was set in February at a regional average of $1.43 per gallon.

Corn Futures -- December 2016 corn futures closed Friday, March 24 at $3.87 putting expected new-crop revenue (eNCR) at $608.52 per acre -- higher $3.36/acre on the week. With anhydrous priced at $573.42 this week, the eNCR/NH3 spread narrowed 3.36 points and now stands at -35.10. This means one acre of expected new-crop corn revenue is priced at a $35.10 premium to one ton of anhydrous ammonia.

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Nutrient/Fuel
3/14/16
3/21/16
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$562.80
$565.50
$7.92
$573.42
Anhydrous
DAP
$484.63
$484.36
-82 cents
$483.54
DAP
MAP
$499.90
$498.22
-$3.98
$494.23
MAP
Potash
$365.90
$363.14
-$4.25
$358.89
Potash
UAN28
$273.35
$279.98
-$8.34
$271.64
UAN28
UAN32
$303.60
$305.60
-75 cents
$304.85
UAN32
Urea
$364.55
$367.25
$4.43
$371.68
Urea
Farm Diesel
$1.48
$1.50
1 cent
$1.51
Farm Diesel
LP
$1.02
$1.02
2 cents
$1.04
LP
Composite
585.72
588.41
-2.40
586.01
Composite

 

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