P&KToday: Phosphate Seesaws Lower

December 24, 2015 11:11 AM

 

P&K was lower for the second consecutive week.

  • DAP $47.54 below year-ago pricing -- lower $8.94/st on the week to $524.43/st.
  • MAP $53.98 below year-ago -- lower $17.44/st this week to $537.38/st.
  • Potash $76.24 below year-ago -- lower $8.53/st this week to $402.62/st.
  • The average cash corn price figured in to P&K this week is $3.81 1/2.
  • The national average corn basis softened 2 1/2 cents from last week to 1 1/4 cents below March futures. The national average cash corn price softened 7 3/4 cents from last week to $3.64 1/4. Basis is firmer than the three-year average, which is 4 1/4 cents below futures for this week.

PhosphateP&K price action this week is impressive. DAP and potash each fell nearly 9 dollars by the short ton and MAP, which has long been overpriced compared to the rest of the fertilizer segment, fell twice that. As with nitrogen, it was the Eastern Belt that pressured the regional averages with Michigan DAP down $36, Wisconsin down $44 and Illinois declining $15. On the DAP side, Iowa posted our only gains, a contrarian $13.04 on the week. \

Declines in MAP were led by Ohio, down $52.80, Michigan down $40 and Indiana down $36.70. If we compare state by state price action in the phosphates, we note the typical seesaw type price action from week to week with DAP falling one week and MAP falling the next week as DAP holds steady. Indiana is a good example. Last week Indiana DAP was down 8 cents as MAP firmed 32 cents in the Hoosier state. This week, In Indiana, MAP is down $36.70 and DAP is down just $5.19. Same deal in Wisconsin... DAP is down $44.60 as MAP is unchanged. If the downtrend is to continue, expect DAP to decline more sharply next week than MAP.

Complicating matters, MAP remains the highest priced nutrient in our fertilizer price survey. That may skew the phosphate teeter totter in favor of declines in MAP. With this week's cash corn price at $3.64 1/4 as reported in Pro Farmer's Midweek Cash report, MAP is priced for $3.92 3/4 cash corn. DAP is overpriced compared to the rest of the fertilizer segment as well. In order for DAP to reflect current nitrogen prices it needs to soften to the mid-$490's per short ton and MAP needs to fall to about $510. We do not expect to see sub-$500 DAP although Wisconsin is priced very low currently at $473.35, but is the only state posting a $400 handle this week. That may be a sign that phosphate prices will fall in line with nitrogen, but it will take several weeks to accomplish that.

PotashPotash is still in good supply with no fresh news that would support higher prices. South Dakota and Iowa post our only gains in vitamin K this week with SD up $11.51 and Iowa up $3.73. All other states were lower on potash with the exception of Missouri, unchanged on the week at $394.35. Potash is already underpriced compared to the rest of the fertilizer segment, but we believe the downward price trend will continue near-term.

Booking on one side or the other of the first of the year is a decision for you and your accountant. Potash is cheap enough that it will fit nicely in the production budget at current prices. If you need to book some phosphate on this side of 2015, we recommend you book roughly half of your expected needs now and wait until mid-January when prices may be $10 lower in the regional averages.

By the Pound --

DAP is priced at 55 1/2 cents/lbP2O5; MAP at 50 3/4 cents/lbP2O5; Potash is at 33 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 December 18, 2015.

P&K pricing by the pound -- 12/24/2015

DAP $P/lb

MAP $P/lb
Potash $K/lb
 
Average
$0.55 1/2
$0.50 3/4
$0.33 1/2
Average
Year-ago
$0.60
$0.56
$0.39 3/4
Year-ago

 

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