P&KToday: Offshore Production to Influence Pricing

June 17, 2016 11:20 AM


Potash was lower on the week as phosphates were mixed.

  • DAP $83.84 below year-ago pricing -- lower 88 cents/st on the week to $480.13/st.
  • MAP $97.61 below year-ago -- higher $2.23/st this week to $500.57/st.
  • Potash $137.20 below year-ago -- lower $1.95/st this week to $350.32/st.
  • The average cash corn price figured in to P&K this week is $3.42 3/4 per bushel.

The national average corn basis softened 1 3/4 cent from last week to 7 3/4 cents below July futures. The national average cash corn price fell 4 1/4 cents from last week to $4.21. Basis is softer than the three-year average, which is 23 cents above futures for this week.

PhosphatePhosphate prices will continue to be driven by offshore suppliers who are eagerly capturing global phosphate marketshare as North American producers stick to the sidelines. China has emerged among the offshore nations aggressively producing DAP and MAP, but, as with Chinese urea production, anthracite coal prices, which some believe are set to raise, will dictate phosphate pricing out of China. It is also thought that no matter what Chinese producers do, robust supplies from Russia and Middle Eastern producers will keep the global phosphate market well supplied.

Closer to home, phosphate was mixed on the week with DAP lower and MAP higher. DAP was led lower by Ohio which fell $8.10. Other DAP declines were less than $2.00 and four states were unchanged. Gains were mild, led by a $1.49 price hike in Illinois. Indiana was up 20 cents by the short ton and Michigan firmed 14 cents. MAP was led higher by Illinois, up $10.29, and Michigan up $7.31. Other states gained less than $3.50 per short ton. Declines were mild, led by Ohio which fell $3.53, and Minnesota, down $3.09 on the week.

PotashPotash resumed its downside slide this week after having firmed 4 cents regionally last week. This week's decline was fueled by South Dakota which fell $11.90 and Michigan, down $6.27. Gains were led by a $1.60 bump in Iowa and a $1.24 rise in Illinois potash prices. Potash production features are very much like that of phosphate with North American producers circling the wagons in the face of a supply-led dismal price outlook. Meanwhile, nations outside the U.S. continue to produce potash very aggressively. It is also important to note that key contracts between China and major global suppliers still have not been signed. We do know the Chinese are currently well supplied on potash needs, but have been importing MOP from Russia via rail on a fairly consistent basis. Since Chinese importers are content to make potash purchases hand-to-mouth, as I have been saying for weeks now, we will do the same.

We do not expect a whole lot of summertime price movement in the P&K sector. If anything, potash prices may dip slightly and while phosphate needs to correct lower to reflect declines in the rest of the fertilizer segment, we foresee sideways price action in DAP and MAP near-term.

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 June 10, 2016.

DAP is priced at 50 cents/lbP2O5; MAP at 47 cents/lbP2O5; Potash is at 29 cents/lbK2O.

P&K pricing by the pound -- 6/17/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.59 1/2
$0.56 3/4
$0.40 3/4