P&KToday: Summer Outlook In Holding Pattern

May 6, 2016 10:38 AM


Phosphates firmed as potash fell slightly.

  • DAP $82.56 below year-ago pricing -- higher $2.45/st on the week to $489.28/st.
  • MAP $92.82 below year-ago -- higher 62 cents/st this week to $501.62/st.
  • Potash $127.91 below year-ago -- lower 59 cents/st this week to $357.47/st.
  • The average cash corn price figured in to P&K this week is $3.47 per bushel.
  • The national average corn basis softened 3 1/4 cents from last week to 5 1/4 cents below July futures. The national average cash corn price fell 7 cents from last week to $3.77. Basis is softer than the three-year average, which is 16 cents above futures for this week.

PhosphateIndexesPhosphates posted mild gains in this week's price action. Michigan was our biggest gainer with Michigan DAP up $11.95 and MAP up $14.02 by the short ton. Ohio and North Dakota DAP were each up just shy of 10 dollars. Most other states were within a dollar of unchanged.

As far as our spreads go, this week, DAP by the adjusted price is only two dollars above one acre of expected new-crop revenue, something we have not seen since May 2014. The improved DAP/corn returns relationship is due largely to recent strength in corn prices.

The summer outlook is murky, but phosphates have been priced at the top of our price survey for several months. That may limit upside action even if nitrogen firms. To really keep a tight lid on prices, U.S. production needs to come back online. International prices are generally stable this week but DAP out of PotashTampa, Fla. firmed slightly. Feedstock prices are fairly stable this week. Phosphate rock and sulphur traded sideways while ammonia firmed slightly. That may coax domestic production back online although we must bear in mind phosphate producers have been quick to stall production in response to the commodity price swoon, and unless demand prospects improve for fall, increased U.S. production is not likely to increase.

Potash prices perked up last week but fell again this week by 59 cents regionally. Michigan led gains here as well firming $6.59, offset by declines in Minnesota to the tune of $6.16. Most other states were less than a dollar lower. Globally, potash prices were sideways to lower. The biggest sticking point in the potash outlook is the fact that China has yet to sign contracts with exporters this year. That agreement is what sets the baseline potash export price each year and until a deal is inked, we must assume the global oversupply will continue, and price strength will be minimal.

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 29, 2016.

DAP is priced at 50 cents/lbP2O5; MAP at 47 cents/lbP2O5; Potash is at 29 3/4 cents/lbK2O.

P&K pricing by the pound -- 5/6/2016

DAP $P/lb

MAP $P/lb
Potash $K/lb
$0.29 3/4
$0.56 1/2
$0.40 1/2