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Inputs Monitor Regional Index: Fertilizer Higher as War Drums Fuel Grain Gains

10:25AM Mar 03, 2014

 IMG 0261 (2)

Declines tallied $7.04 to gains' $47.14 in the regional averages. This week, the usual suspects are up again. MAP is $14.40 higher, DAP $8.37 higher by the ton and urea is up again adding $11.54 of its own. Potash moved lower on declines in Nebraska, Kansas and Michigan, but most states were unchanged.

Farm diesel headed higher adding 4 more cents due to strong distillate supply demand and higher crude oil pricing -- April '14 WTI opens today at $103.00.

LP moved lower this week on continued supply relief, but as the Polar Vortex settles back in, demand for home heat will remain high from the Rocky Maintains eastward. April '14 natural gas opened today at $4.69, $1.61 lower than the same time last week. In Mid-February, the Federal Energy Regulatory Commission (FERC) directed Enterprise TE Products Pipeline Company to prioritize propane shipments northward from Mont Belvieu, Texas. The result has been a 500,000 barrel addition to Midwestern and Northeastern supplies, and prices are moving lower as those supplies arrive.

Corn Futures --

December 14 corn futures closed Friday at $4.71 1/2 -- that's 7 1/4 cents above the previous Friday's close, putting expected new-crop revenue $11.60/acre firmer on the week at $714.40. With anhydrous priced at $656.07 this week, the ZCZ/NH3 spread widened 2.87 points and now lies at -58.33.

The eyes of the commodity world are on the Black Sea where wheat and nitrogen exports could be jeopardized by a war between Ukraine and Russia. The Kremlin has issued an ultimatum to Ukraine forces on the Crimean Peninsula to surrender to Russian forces by 3:00 GMT -- that's 5 am Tuesday, Central Time -- or face the threat of force. At the same time, rumors of Russian military helicopters swarming above Ukraine's northern border with Belarus are beginning to surface suggesting Russia intends to attack from both the Black Sea in the south, and from the north via Belarus.

Diplomats from around the free world are clambering to slow the conflict's escalation, but observers have noted that Putin is "in another world" and a diplomatic solution is not expected from Moscow. The threat of all-out war is placing upward pressure on grain markets today, and may have a similar impact on global fertilizer prices if export sendouts of ammonia, ammonium nitrate, urea and UAN from Yuzhny in the Black Sea are impacted.


Regionally --

Anhydrous firms $8.73 to $656.07; UAN28 $2.94 higher week-over to $353.45; UAN32 firms $1.16 to $369.87; Urea $11.54 higher to $527.54.

DAP $8.37 higher to $556.20; MAP $14.40 higher to $577.85. Potash softens $6.07 to $460.71.

Farm diesel firms 4 cents to $3.58 1/2 -- now steady with year-ago. LP softened 97 cents to $2.78 -- now $1.29 cents above year-ago.

Week-over Change
Current Week
Farm Diesel
$3.46 1/2
+ 4 cents
$3.58 1/2
- 97 cents


 Photo Credit: D. Michaelsen, Inputs Monitor