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P&K Today: P&K Still Under Pressure

November 27, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

*our regular reports are out of sync this week due to the Thanksgiving holiday. We will return to our regular report schedule next week.

P&K retail prices were mixed on the week with DAP and Potash moving higher as MAP softened slightly.Picture1

Tomorrow is Thanksgiving in America and with the exception of some far northern areas, the crop is all but in. Nutrient pricing has fallen dramatically since this time last year, although the numbers are a little deceiving. Retail values are running roughly $125/short on behind last Thanksgiving and by this time last year, prices had already leveled off and settled into a generally sideways trajectory for winter.

While the breakup of the Belorussian Potash Company (BPC) was cited for pressuring global potash prices lower, at almost exactly the same time the decline started, corn futures fell hard. I have written before that the true measure of the impact of Uralkali on global potash prices would have been better observed if potash had fallen as corn futures held steady. That was not the case at all and leaves room for speculation at the timing of the whole mess.Picture5

Phosphate production in the United States accounts for most of the DAP/MAP consumed by growers, and P prices have fallen in line with K. Conditions have been met for BPC to restart the joint venture and officials from Uralkali are already warning of a potash rally. If potash rallies on its own, we will know Uralkali's influence did in fact pressure pricing to current levels.

But we still believe corn is king and that futures pricing will lead the nutrient price recovery. Fewer planted acres to corn are predicted for the upcoming crop year and that may pull as much as one million tons worth of demand out of the market for both P&K. Weak demand, low corn futures and a savvy Ag community who is willing to wait out declines will all keep pressure on nutrient pricing near-term.

Outlook -- The market isn't giving nutrient bulls much to hang on to and as long as December corn refuses to rally, nutrient is expected to hold in place. Fall purchases should now be limited to product for immediate application. We will extend coverage for spring on a bounce, but it looks like smooth sailing for P&K for a few weeks as inventories are high as buyers hold out for lower pricing. 

This week --

  • DAP $125.69 below year-ago pricing -- up $1.43 on the week to $532.14/st.
  • MAP $111.64 below year-ago --down $4.37 this week to $557.61/st.
  • Potash $122.88 below-year ago -- up 60 cents this week to $481.89/st.
  • December 2014 corn futures opened 3 cents lower this morning than last week's P&K Today at $4.54 with the national average cash corn price 3 cents higher from last week at $4.22. Corn basis moved back above futures pricing to stand at 3 1/2 cents above December 13 futures.

 

By the Pound --

DAP 3/4 cent lower to 56 cents/lbP2O5; MAP softens 1/2 cent to 52 1/4 cents/lbP2O5; Potash moved higher by the ton on the week but slid a quarter cent by the pound to 39 3/4 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 Nov.22, 2013.

P&K pricing by pound -- 11/25/2013

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.58
$0.54
$0.40
Illinois
$0.55
$0.52
$0.40
Indiana
$0.56
$0.52
$0.39
Wisconsin
$0.54
$0.55
$0.38
Minnesota
$0.56
$0.53
$0.39
South Dakota
$0.56
$0.52
$0.40
North Dakota
$0.56
$0.50
$0.39
Nebraska
$0.51
$0.51
$0.44
Missouri
$0.57
$0.52
$0.39
Kansas
$0.56
$0.53
$0.42
Ohio
$0.53
$0.51
$0.40
Michigan
$0.64
$0.53
$0.38
Average
$0.56
$0.52 1/4
$0.39 3/4
Year-ago
$0.69
$0.62
$0.50

 

Wholesale --

MosaicCo reports wholesale DAP moved sideways at Tampa and NOLA, softening a few dollars at Morocco and Central Florida. Wholesale potash softened in the Corn Belt and Southeast Asia and ran sideways in Brazil. Raw phosphate rock from Morocco is unchanged and Tampa ammonia shucked $30.00/ton from the wholesale price.

The Percentages Year-over --

Potash firmed 1.9% from last week to stand 20.2% below year-ago; DAP narrowed 0.2% to the year-on-year differential to 19.1% below year-ago; MAP firmed 0.9 % to 16.6% below last year's price, and anhydrous widened the year-over gap by 0.6% during the week to end at 23.1% below last year's price at this time.

 
Current regional average price/short ton
Percent of year-ago
Potash
$481.89
-20.2%
DAP
$532.14
-19.1%
MAP
$557.61
-16.6%
NH3
$666.09
-23.1%

 


 

 

 

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