ALERT 7/31/2013: Anhydrous, 32% Fall Sharply -- Tables Included

July 31, 2013 08:21 AM
 

I posted both of the tables below in a Monitor article titled 'Kamikaze Nitrogen' but I didn't want you to miss the details. There were some very strong declines in nitrogen pricing last week and while we suspect there may still be some room left to the downside here and there, keep in mind these declines are a result of two factors.

1) Declines in December corn. I have my doubts as to whether nitrogen is a true follower of corn, but I would hate to confirm that it is a true follower at a Dec corn rally that chases nutrient back to the upside. Today December corn opened at just $4.76 and short of a July frost -- there were a few in North Dakota the other day -- corn futures continue to build demand. Once new-crop is under combines, I believe the market will realize that the corn crop has some significant holes.

2) Resupply at retail locations is underway and the adjusted price points are a result of new supplies. The view from upstream producers is slanted toward softening demand for nutrient based on the sentiment that growers have made enough money in the past few years to bank P&K. Meanwhile, Ukraine natgas supplies are more secure and affordable than they ever have been there and between U.S. expansions, Ukraine nearing the top of production capacity -- currently running around 85% for anhydrous and urea -- and smooth sailing to Trinidad and back, robust supply in the face of sluggish demand will weigh prices lower.

Where are the deals? --

Anhydrous in both Dakotas is priced at the bottom of the scale along with Kansas, Nebraska and Missouri. Iowa fell off sharply as did Minnesota and Wisconsin. If you are looking to book anhydrous for fall, we advise covering 30% of fall needs today in the states listed above. There may yet be more room to the downside for N, but in an effort not to put all of your eggs in one basket, hold off on booking more than 30% right now. See the tables below for more.

I also like 32% in Illinois, currently at $395.79/ton, Minnesota at $390.89, Missouri and Kansas at $410.00 seems a little high, but is $42.00 less than last week/ton in MO and down $26.00 in Kansas.

We see no need to jump into urea just yet. The Chinese tariff window just opened a month ago, and we believe they will continue to oversupply the market and add to production capacity. Hold on urea.

Nitrogen pricing by pound of N

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Iowa
$0.48
$0.61
$0.68
$0.67
Illinois
$0.51
$0.63
$0.68
$0.61
Indiana
$0.55
$0.63
$0.71
$0.75
Wisconsin
$0.47
$0.54
$0.68
$0.56
Minnesota
$0.49
$0.53
$0.64
$0.61
South Dakota
$0.42
$0.53
$0.63
not reported
North Dakota
$0.43
$0.50
$0.64
not reported
Nebraska
$0.41
$0.59
$0.68
$0.66
Missouri
$0.43
$0.53
$0.71
$0.64
Kansas
$0.41
$0.54
$0.70
$0.64
Ohio
$0.58
$0.53
$0.71
Not reported
Michigan
$0.57
$0.53
$0.71
Not reported
Midwest Average
$0.48
$0.58
$0.70
$0.64

 

 

Anhydrous/short ton last week

Change
Anhydrous/short ton current week
Iowa
$831.20
-$51.95
$779.25
Illinois
$863.53
-$27.86
$835.67
Indiana
$870.00
+$34.74
$904.74
Wisconsin
$841.17
-$64.84
$776.33
Minnesota
$854.23
-$56.16
$798.07
South Dakota
$890.31
-$194.48
$695.83
North Dakota
$850.36
-$144.12
$706.24
Nebraska
$749.51
-$66.02
$683.49
Missouri
$821.67
-$107.36
$714.31
Kansas
$749.21
-$79.69
$669.52
Ohio
$952.00
unchanged
$952.00
Michigan
$902.50
+$25.03
$927.53
Midwest Average
$847.97
-$61.06
$786.91

 


 

 

 

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