Inputs Monitor Regional Index: Bullish Fertilizer Gathers Momentum

February 24, 2014 04:13 AM
 

 

Declines tallied $1.22 1/2 to gains' $50.41 in the regional averages. It would appear the seasonal turnaround isn't really a turnaround at all anymore... it is now a full fledged bull market for nutrient. This week, the unusual suspects are up again. DAP jets nearly $20.00 higher by the ton with urea not far behind adding $12.38 of its own.

Farm diesel headed higher adding 8 cents due to strong distillate supply demand and higher crude oil pricing -- April '14 WTI opens today at $102.29.

LP moved lower this week on some scattered supply relief, but if the Polar Vortex settles back in, as is expected this week, demand for home heat will remain high from the Rocky Maintains eastward. March '14 natural gas opened today at $6.30, already 50 cents lower on the day.

Corn Futures --

December 14 corn futures closed Friday at $4.64 1/4 -- that's 5 1/2 cents above the previous Friday's close, putting expected new-crop revenue $7.20/acre firmer on the week at $702.80. With anhydrous priced at $647.34 this week, the ZCZ/NH3 spread widened 8.30 points and now lies at -55.46.

This is the second time this month that the ZCZ/Nh3 spread widened beyond -50. That indicates a tremendous amount of upside potential for anhydrous. Part of the wider spread this week is due to higher December 14 futures pricing and a $30.00 falloff in Michigan anhydrous prices. All other states were mostly stable -- higher or lower by less than 10 bucks, but the downward impact of Michigan pricing on anhydrous makes this week's $1.18 decline in regional Nh3 pricing a little deceiving.

On that basis you will be hard pressed to find a better time to cover anhydrous for spring. We are currently at 60%. If you are not that far with bookings, get caught up today. We are in no hurry to fill the remaining 40% for spring, but be advised, wholesale ammonia added $38.00 per ton this week to $453.00. This after several weeks of stable pricing at $415.00. If the higher wholesale price sticks -- and urea and UAN want it to badly -- retail prices will respond by moving higher within weeks.

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Regionally --

Anhydrous softens $1.18 to $647.34; UAN28 $8.09 higher week-over to $350.51; UAN32 firms $1.25 to $369.34; Urea $12.38 higher to $516.00.

DAP $19.33 higher to $547.83; MAP $7.25 higher to $563.45. Potash firms $2.03 to $466.78.

Farm diesel firms 8 cents to $3.54 1/2 -- now 2 cents below year-ago. LP softened 4 cents to $3.75 -- now $2.26 cents above year-ago.

Nutrient/Fuel
2/10/14
2/17/14
Week-over Change
Current Week
Anhydrous
$646.89
$648.52
-$1.18
$647.34
DAP
$524.07
$528.50
+$19.33
$547.83
MAP
$542.88
$556.20
+$7.25
$563.45
Potash
$462.18
$464.75
+$2.03
$466.78
UAN28
$338.16
$342.42
+$8.09
$350.51
UAN32
$364.83
$368.09
+$1.25
$369.51
Urea
$487.23
$503.62
+$12.38
$516.00
Farm Diesel
$3.47 1/4
$3.46 1/2
+8 cents
$3.54
LP
$3.81
$3.79
- 4 1/2 cents
$3.75
Composite
374.84
379.932
+5.466
385.398

 


 

 

 

 

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