P&KToday: Belarus Forecasts Lower Potash Exports

April 29, 2016 01:10 PM

 

P&K were higher on the week.

  • DAP $88.33 below year-ago pricing -- higher $1.85/st on the week to $486.83/st.
  • MAP $92.59 below year-ago -- higher 6 cents/st this week to $501.00/st.
  • Potash $126.54 below year-ago -- higher $1.30/st this week to $358.07/st.
  • The average cash corn price figured in to P&K this week is $3.44 1/4 per bushel.
  • The national average corn basis softened 1 1/4 cents from last week to 2 cents below May futures. The national average cash corn price fell 16 1/2 cents from last week to $3.78. Basis is softer than the three-year average, which is 8 3/4 cents above futures for this week.
     

PotashGlobal potash supplies may be set to tighten. Belaruskali announced this week it projects its potash exports will decline by as much as 18% in 2016 from the year before. After splitting with former joint venture partner, Russia's Uralkali, in 2013, Belarus reopened export channels into the United States. Since then, Belarus has capitalized on the added marketshare.

Potash prices have been the low water mark in our fertilizer price survey for several months, a price path which preceded general fertilizer market softness in nitrogen. Contracts signed between Chinese importers and Belorussian potash exporters came in well below the expectations of other exporters and set the tone for global prices. Belaruskali noted their lower export estimate is "very conditional" and will depend on lower global demand estimates.

On the retail level, potash and phosphates firmed slightly this week with gains in MAP leading the way. Upstream sources suggest phosphates may fall through summer, but for the time being demand on the farm will continue to support prices. As with nitrogen, this week's price action, in the heat of spring applications in the northern plains hints at ample supplies across the Midwest. The less upside action seasonal demand inspires, the greater the likelihood prices will fall once applications are complete.

PhosphateLevering for the upside, global ammonia prices firmed slightly this week which would add expense for phosphate manufacturers on the front end, and be passed on to the consumer. Keep in mind, however, through the phosphate price slump, Mosaic has managed expenses by curtailing production. If prices firm far enough, Mosaic will reinvigorate production which could limit upside risk, but since U.S. producers have been so successful at balancing U.S. supplies, production will only increase as much as is profitable.

We booked phosphate last week after spending much of the winter in hand-to-mouth mode. Many farmers had already booked and/or applied phosphate by that time, and our hand-to-mouth strategy served us well. If you have not yet booked phosphate for spring, we advise you go ahead and pull the trigger. As we have always observed, latecomers will be subject to higher prices.

By the Pound --

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended April 22, 2016.

DAP is priced at 50 1/2 cents/lbP2O5; MAP at 47 cents/lbP2O5; Potash is at 29 3/4 cents/lbK2O.

P&K pricing by the pound -- 4/29/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
 
Average
$0.50 1/2
$0.47
$0.29 3/4
Average
Year-ago
$0.60 1/2
$0.56 1/4
$0.40 1/2
Year-ago

 

P_KIndexes