P&KToday: Operational Efficiency & Increased Imports Support U.S. Supplies

November 6, 2015 01:06 PM


1162015PhosphatePhosphate firmed as potash softened on the week.

  • DAP $50.21 below year-ago pricing -- higher 67 cents/st on the week to $535.44/st.
  • MAP $29.33 below year-ago -- higher $7.37/st this week to $570.84/st.
  • Potash $54.12 below year-ago -- lower 85 cents/st this week to $424.24/st.
  • The average cash corn price figured in to P&K this week is $3.92.
  • The national average corn basis firmed 3 1/2 cents from last week to 1 1/2 cents above December futures. The national average cash corn price firmed 5 1/2 cents from last week to $3.81 1/2. Basis is firmer than the three-year average, which is 10 1/4 cents below futures for this week.

Phosphate producers report their cost-saving measures have thus far been a success. Declines in feedstock pricing along with increased operational efficiencies have led to mild increases in manufacturing margins. Along with increased imports from foreign sources, the uptick in profit prospects has price projections pointing slightly lower. Demand is still a big question and as U.S. supplies build, demand discovery could add pressure to DAP and MAP through the winter. Prices will likely rebound in response to demand surges along the way, but experts expect a softer tone near-term.

Our forecast for higher phosphate prices by spring remains intact, however and we still expect a low sometime after the first of the year.

1162015PotashThe global potash oversupply continues thanks in part to robust production and exports out of Belarus. That nation had been subject to export sanctions based on human rights violations by the world community. Since the doors of commerce reopened to Belarus, they have flooded the U.S. and other global markets with fairly priced potash. That will keep a lid on U.S. retail potash prices and bring buyers to the market who might have otherwise cut potash from the production budget.

We expect potash prices to continue to slide although the bulk of downside potential has likely already been exercised We look for sideways price action once the bottom has been struck. This week, potash fell about the same amount by the short ton as anhydrous, and that lends clues that mild price support may be in the cards near-term. As with all nutrient, we expect a slight increase in prices based on demand for spring applications, but so far, as fall applications have begun, prices are still pointed downward.


By the Pound --

DAP is priced at 56 1/2 cents/lbP2O5; MAP at 54 cents/lbP2O5; Potash is at 35 1/2 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 October 30, 2015.

P&K pricing by the pound -- 11/5/2015

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.56 1/2
$0.35 1/2
$0.61 1/2
$0.39 1/2