Inputs Monitor Regional Index: Anhydrous Ammonia Rolls Higher

April 7, 2014 05:30 AM


Declines tallied 17 cents to gains' $39.15 in the regional averages. The general path of nutrient prices is -- wait... we can take 'general' out of that and say the path of nutrient is higher as led by a $16.21 increase in anhydrous ammonia pricing. We reported late last week that rail problems are delaying fertilizer deliveries to suppliers by at least three weeks. This after reporting the prior week that pipeline deliveries are backlogged as well.Picture1

Demand for spring nutrient seems to be taking the shipping industry by surprise, and as the soil warms, growers are playing catch-up from the fall. Meanwhile, corn futures are inflating expected new-crop revenue, and our expectation is for fertilizer pricing to follow corn higher. We begin to turn our focus on UAN solutions and liquid nitrogen for post emerge application. Look for more in this week's NFiles report on Tuesday.

We are 100% filled on anhydrous and phosphate for spring, and will likely advise to fill the remaining 20% of spring potash this week. We are at 80% filled on UAN solutions and urea, and are looking for a mild price break in the next few weeks. But anhydrous applications will drive UAN demand as late season sidedress applications will have to make up for any N loss between now and then. If the weather fires up a series of gulley-washers and flushes N, UAN will take up the nutrient slack later on in the season. That could raise prices on N solutions, but we may get a break in the meantime if anhydrous sales remain strong.

Farm diesel continued lower, falling 2 cents from last week -- May '14 WTI opens today at $100.91 -- 78 cents lower on the week; April heating oil at $2.90 -- down four cents on the week. We expect the downtrend to continue for another few weeks on farm diesel.

LP moved lower again this week, falling 15 cents -- May '14 natural gas opened today at $4.44, four cents lower than the same time last week. index

Corn Futures --

December 14 corn futures closed Friday at $5.06 3/4 -- that's 19 1/2 cents above the previous Friday's close, putting expected new-crop revenue $31.20/acre firmer on the week at $770.80. With anhydrous priced at $682.39 this week, the ZCZ/NH3 spread widened 14.99 points and now lies at -88.41. The expectation is for this number to one day shrink to zero, aligning anhydrous ammonia prices with expected new-crop revenue.



Regionally --

Anhydrous firms $16.64 to $682.39; UAN28 is $3.49 higher week-over to $359.48; UAN32 firms $2.16 to $384.04; Urea $6.32 higher to $546.00.

DAP $2.46 higher to $571.42; MAP firms $6.53 to $594.63. Potash firms $1.98 to $469.53.

Farm diesel falls 2 cents to $3.47 -- now 6 cents below year-ago. LP softened 15 cents to $1.94 -- now 45 cents above year-ago.

Week-over Change
Current Week
Farm Diesel
$3.56 1/4
-2 cents
$2.32 1/2
-15 cents






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