P&KToday: P&K Pointed Lower

April 8, 2016 11:01 AM

P&K were mixed on the week.

  • PhosphateDAP $94.57 below year-ago pricing -- lower $1.72/st on the week to $481.82/st.
  • MAP $97.90 below year-ago -- higher $1.34/st this week to $495.57/st.
  • Potash $132.04 below year-ago -- lower $2.29/st this week to $356.60/st.
  • The average cash corn price figured in to P&K this week is $3.41 1/4 per bushel.
  • The national average corn basis firmed 1 cent from last week to 1 1/2 cents above May futures. The national average cash corn price declined 8 cents from last week to $3.59 1/2. Basis is softer than the three-year average, which is 8 3/4 cents above futures for this week.

Word from upstream is that phosphate and potash are both set to continue lower. According to MosaicCo's Plant Nutrient Dashboard, DAP out of Morocco, central Florida and NOLA are all lower on the week. A percentage comparison of the year-ago changes in DAP, MAP and potash between our retail price survey and Mosaic's posted wholesale values supports the idea P&K are headed lower. The table below expresses the values and the retail price the year-over percentage changes project to.

Percent below Year-ago

Inputs Monitor

Wholesale
Spread
Projected Retail
DAP
-16.4%
-19.1%
2.7%
$468.81
MAP
-16.6%
-24%
7.4%
$458.89
Potash
-27.2%
-38.3%
11.1%
$317.01

Potash

Retail DAP is down 16.4% on the year compared to wholesale bids which are down 19.1%. When the spread is applied to today's retail price, the difference projects a low in DAP at $468.81. The analysis projects MAP down to $458.89 and potash down to $317.01. The projected retail prices seem on the low side to me, but if retail prices move to reflect current wholesale pricing, the "projected retail" column above shows where P&K prices might bottom.

We maintain a hand-to-mouth approach is best at this point. Here in Central Iowa farmers are anxious to get started and in just the last two days fieldwork has definitely picked up. That includes dry P&K. My concern is that seasonal demand will have a greater influence over retail pricing than will wholesale values. The upside will be very limited as long as local supplies are ample. That makes it very important for growers who plan to apply P&K this spring to stay in touch with your local supplier to make sure there is product on hand when you need it.

Supply issues will be the factor that can support higher P&K values. Local supplies will be key in capturing as much value as possible on P&K so get in touch with your preferred retailer and if supplies appear to be short, consider potash a value and book phosphate as well. If your dealer has plenty to go around, I advise you hold off as long as you can before pulling the trigger on P&K.

Longer term, P&K for fall will likely be priced at value levels.

 

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 1, 2016.

DAP is priced at 50 1/4 cents/lbP2O5; MAP at 46 1/2 cents/lbP2O5; Potash is at 29 1/2 cents/lbK2O.

P&K pricing by the pound -- 4/8/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
 
Average
$0.50 1/4
$0.46 1/2
$0.29 1/2
Average
Year-ago
$0.60 1/2
$0.56 1/2
$0.41
Year-ago

 

P_KSpreads