P&KToday: Belarus Pressures Global Potash

December 18, 2015 01:15 PM


The entire P&K segment was lower on the week.

  • 12182015PhosphateDAP $40.80 below year-ago pricing -- lower $1.16/st on the week to $533.37/st.
  • MAP $38.81 below year-ago -- lower 89 cents/st this week to $554.82/st.
  • Potash $69.22 below year-ago -- lower $1.13/st this week to $411.14/st.
  • The average cash corn price figured in to P&K this week is $3.87 3/4.
  • The national average corn basis firmed 2 cents from last week to 1 1/4 cents above March futures. The national average cash corn price softened a penny from last week to $3.72. Basis is firmer than the three-year average, which is 3 3/4 cents below futures for this week.

Potash and phosphate were under pressure this week as demand remains uncertain for the upcoming crop. Support may stem next week from a mild demand increase as growers look to book some inputs ahead of the new year. Potash supplies remain high and a new player has emerged as a global market mover. Belaruskali is back in the news after splitting from a joint venture with Russian potash producer Uralkali in 2013. Belaruskali has benefited from loosening export sanctions giving the tiny former soviet state a foothold in world potash trade. The company undercut prices that other cartels were considering, dominating price discovery. Belaruskali now accounts for 17% of global potash trade and has already exported tonnage to the United States.

12182015PotashIn the battle for marketshare, Uralkali still has the upper hand by volume, but buyers in China and India are likely to shop at Belaruskali first when tendering imports since Belaruskali has proven it can deliver quality product at a price lower than the competition. That will help limit potash prices through winter.

In Pro Farmer's Quarterly Grain report, we predicted DAP will fall to a late January/early February low of $525 regionally and MAP to $545 per short ton. However, if phosphate is to reflect nitrogen's current prices, we will need to shave about $20 off of each of those figures. That is a bit of a stretch near-term as imports still dominate U.S. phosphate price action. Longer-term, increased availability of domestically produced feedstock ammonia should increase U.S. DAP/MAP production and weigh on prices. Expect those benefits to arrive for fall 2016 at the earliest.

We projected potash to fall to $400. That's $11 below this week's price and thanks to supply additions from Belarus and the potential for Uralkali to combat the oversupply with more oversupply, prices may just give us that last $11. Some states are already below $400 and in those instances, we recommend booking at least a portion for spring.

By the Pound --

DAP is priced at 56 1/4 cents/lbP2O5; MAP at 52 1/2 cents/lbP2O5; Potash is at 34 cents/lbK2O.

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended December 11, 2015.

P&K pricing by the pound -- 12/18/2015

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.56 1/4
$0.52 1/2
$0.60 1/2
$0.56 1/4