Inputs Monitor Regional Index -- Nutrient Softens With One Maverick

June 24, 2013 04:40 AM

Nutrient softened across the board with one notable exception and as rains continue to gulleywash parts of the Corn Belt, nitrogen continues to flush away. In response, UAN 32% is our only upward mover this week signaling strong demand for side dress and supplemental N applications. The question is, when will these saturated soils be able to support the weight of implements?

December corn futures firmed week-on-week opening today at $5.47. Uncertainty about new-crop futures has defaulted to optimism on the part of investors and the world community. Crop condition reports this week could take the market by surprise. Driving through farm country over the weekend showed early planted crops looking good. But the majority of fields are beginning to show bare spots. In years past, these bare spots would have already been replanted, but these acres are, in most cases, still too muddy to work.

At these levels, per-acre new-crop revenue would add up to $793.44 and the NH3/ZCZ spread lies at $65.88. Our NH3/ZCZ spread calculates the margin between 1 short ton of anhydrous and 1 acre of expected new-crop revenue based on December 13 corn futures (ZCZ13).

Heavy rain is forecast for the Central Belt in a line starting just West of Lincoln, NE and moving East for the first half of this week suggesting another week where not much gets done to nurture waterlogged and N deprived stands.

Front-month natural gas futures opened today at $3.79 and trailed early. Positive storage news and weak demand for power generation is keeping the July contract below its pivot point of $3.91. A move above that level has proven to be a sign of upside potential. Look for July natgas futures to remain range-bound by Wall Street.

Declines of Note --

Anhydrous continued its bear run led by $23.64 in declines in Iowa. Michigan DAP fell $17.82 -- still above the regional average. I believe this is a corrective move as DAP prices in Michigan were closer to $650/ton just a few weeks ago.

South Dakota farm diesel fell 8 cents to $3.34 -- 7 cents below the regional average. Indiana farm diesel fell 7 cents week-over to $3.49 and LP in that state fell a full 20 cents to $1.56.

Gains of Note --

The largest gain was a $42.86 increase in UAN32% in Missouri. Missouri has been a harbinger of price increases in the past, but while demand for supplemental nitrogen is high, application opportunities have been scarce at best. We may see more increases in 32% ahead if the sun ever comes out and firms wet fields.


Regionally --

Anhydrous moved $3.93 lower to $859.32; UAN28 $0.29 lower to $399.96; UAN32 firms $2.85 this week to $441.83 -- this week's only uptick; Urea moved $3.60 lower to $557.05.

DAP $0.73 lower to $628.64 along with a ten cent decrease in MAP to $648.40.

Potash softens $0.46 to $580.54/ton.

Farm diesel $0.017 lower this week at $3.410; LP down slightly, shaving two cents off the regional price to $1.415/gallon.

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