Declines tallied $2.97 1/4 to gains' $26.08 1/4 in the regional averages. We advised on Friday to extend spring coverage on UAN solutions, urea and phosphate (view ALERT). This week we note those have all moved higher after months of decline. We had been watching UAN in particular and the numbers suggest the seasonal low for UAN28% and UAN32% has been set.
Phosphate moved higher this week as well as the current phosphate price, now $130.00 below the same time last year, is reported unsustainable and as exports pick up, domestic restocking is influencing DAP and MAP higher.
Meanwhile, the December 14 corn contract closed slightly lower on Friday at $4.49, opening today at $4.51.
Farm diesel posts another week of upside movement. Last week ruby red added 2 1/2 cents and this week we find regional prices 5 1/4 cents higher. We have advised to cover 50% of spring needs at current prices and will look for price weakness in late spring to fill the rest for spring and summer.
LP turned lower for the first time since midsummer, falling 3 1/4 cents this week. This may mean propane prices will correct lower, but nearly half of all the states in the Union are still under Hours of Service Waivers and forecasts call for the Polar Vortex to return tomorrow, driving temperatures back near zero for the Corn Belt and parts eastward. This will limit downside potential for LP near-term.
Corn Futures --
December 14 corn futures closed Friday at $4.49 putting expected new-crop revenue at $678.40. With anhydrous priced at $650.48, the ZCZ14/NH3 spread narrowed 15.85 points and now lies at -27.92.
A narrowing of the spread between 1 acre of new-crop expected revenue and 1 ton of anhydrous suggests upside risk for nutrient. However, UAN, urea and phosphate are currently responding to supply features, and have shown a weaker correlation to corn futures than have NH3 and potash.
In other words, as we expect corn futures to range sideways, the influence of expected new-crop revenue based on the Dec. '14 contract will likely not be strong enough to limit increases, particularly for UAN and urea.