Inputs Monitor Regional Index: Fertilizer Prices Steady, Application Window Freezes Shut

December 9, 2013 04:28 AM
 

Declines tallied just $5.43 to gains' $3.02. Nutrient pricing is very flat according to data reported to your Inputs Monitor and now that the Central Belt has been filled in with snow, the application window has closed, and iced over. This entire year has been difficult to call as price declines and low corn futures pressured nutrient prices very low. We had advised that this year growers would have to book inputs on a downward slope, but industry reports maintain that very little product has made it to the soil this fall.ukraine

There are a number of factors stoking the furnace under nutrient pricing at present. Riots in the streets of key nitrogen producers Ukraine and Egypt are adding uncertainty into urea, ammonia and UAN markets. In 2012, Ukraine was among the top nitrogen suppliers to the U.S. along with Canada, Trinidad and Egypt.

On Sunday, in response to President Yanukovych's decision not to sign an Association Agreement with the European Union, pro-E.U. Kiev demonstrators knocked down a statue of Lenin and beat it with sticks and hammers. Egypt is a top supplier of UAN solutions to the United States and has been targeting nitrogen fertilizer exports to the U.S. as a potential cash cow. Another round of violence erupted over the weekend in Cairo as supporters of a secular Egypt took to the streets. Meanwhile, urea production in China has faltered suggesting spring sendouts of Chinese urea will put less pressure on nitrogen pricing at that time.cairo

Political unrest in Ukraine and Egypt along with production problems in China currently threaten to push nitrogen prices higher which are already two months behind schedule for their annual lift. Keeping nutrient in place is continued weak demand and, of course, low corn prices, but the December 14 contract has added a good dime since this time last week. Tomorrow's S&D report from USDA may only serve to douse the rally however as supplies are currently thought to be strong enough to limit futures pricing.

Corn Futures --

Today, the Dec14 corn futures contract (ZCZ14) opened 10 1/2 cents higher than last week's report at $4.69 1/2. Based on that, expected new-crop revenue lies at $701.60/acre at 160 bu.

The ZCZ/NH3 spread widened 14.97 points on the week and currently lies at -32.05 with Dec 14 corn futures on top.

Add an uptick in December 14 corn futures to political unrest and production problems across the globe and the annual runup in fertilizer pricing cannot be far behind. However, Dec corn is no stranger to bull traps and the current rally may quickly run out of steam. It may take up to two solid weeks of positive chart movement in Dec corn before fertilizer takes notice.

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Regionally --

Anhydrous firms $1.83 to $669.55; UAN28 57 cents higher week-over to $320.22; UAN32 softens $1.81 to $347.92; Urea $7.72 higher to $452.11.

DAP $2.34 lower to $525.21; MAP 51 cents lower to $558.75. Potash falls $1.13 to $481.18.

Farm diesel firms 5 cents to $3.425 -- 20 3/4 cents below year-ago. LP firmed 2 cents to $1.770 -- 28 1/4 cents above year-ago.

Nutrient/Fuel
11/25/13
12/2/13
Week-over Change
Current Week
Anhydrous
$666.09
$667.72
+$1.83
$669.55
DAP
$532.14
$527.55
-$2.34
$525.21
MAP
$557.61
$558.90
-$0.15
$558.75
Potash
$481.89
$482.31
-$1.13
$481.18
UAN28
$312.27
$319.65
+$0.57
$320.22
UAN32
$347.86
$349.73
-$1.81
$347.92
Urea
$444.39
$452.11
+$0.57
$452.68
Farm Diesel
$3.375
$3.395
+$0.03
$3.425
LP
$1.711
$1.749
+$0.02
$1.77
Composite
371.929
373.683
-0.27
373.415

Anhydrous Action --

Three of our twelve states surveyed moved lower on anhydrous during the report week with four states unchanged and five states moving higher.

State NH3
Previous Week
Change
Current Week
Iowa
$657.20
-$0.84
$656.36
Illinois
$692.31
+$10.12
$702.43
Indiana
$708.38
+$0.29
$708.69
Wisconsin
$675.88
+$5.88
$681.76
Minnesota
$670.93
+$3.53
$674.46
South Dakota
$693.51
Unch.
$693.51
North Dakota
$650.00
-$0.43
$649.57
Nebraska
$607.56
+$10.66
$618.22
Missouri
$628.20
Unch.
$628.20
Kansas
$601.62
-$7.28
$594.34
Ohio
$695.00
Unch.
$695.00
Michigan
$732.15
Unch.
$732.15

 


Cairo photo credit: omarroberthamilton / Foter.com / CC BY-NC-SA

Ukraine photo credit: mac_ivan / Foter.com / CC BY

 

 

 

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