Inputs Monitor Regional Index: Nitrogen Slows Uptrend

March 10, 2014 05:00 AM

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Declines tallied $3.61 to gains' $14.52 3/4 in the regional averages. This week,Anhydrous, MAP and LP all slipped slightly lower, but upward movement slowed in general across the board. We have received reports from southern areas of applications going down, and growers will be anxious to get in the field where they can, particularly after a weekend of substantially warmer temperatures. Areas east of the Missouri River have a good amount of snow to melt through before much can be done there, but as corn futures strengthen, growers may feel they are in better shape than once thought, and demand for spring product will be high, unless we encounter a spring weather surprise.

Last year, late snows and persistent rainfall made for a very narrow application windows in many parts of the Midwest suggesting growers will get in the field as soon as possible this year to stay out in front of the weather. If preplant applications are washed out or delayed, UAN hand-to-mouth demand will be high, injecting fresh upside potential into UAN pricing later in the spring.Pict1ure1

We pulled the trigger on anhydrous last week and although Nh3 fell slightly this week in regional averages, this week's $2.38 decline is only a partial retracement of the nearly nine dollars anhydrous added last week. Upside potential is still strong here as the ZCZ/Nh3 spread has widened past -70 points. That indicates a tremendous amount of upside potential for Nh3 and while the rest of nitrogen has just about exhausted its recovery potential, Nh3 will have to catch up at some point.

Farm diesel continued higher adding 3/4 cent due to strong distillate supply demand and $100+ domestic crude oil pricing -- April '14 WTI opens today at $102.75.

LP moved lower again this week on continued supply relief, falling an encouraging dime. April '14 natural gas opened today at $4.62, 7 cents lower than the same time last week.

Corn Futures --

December 14 corn futures closed Friday at $4.84 3/4 -- that's 13 1/4 cents above the previous Friday's close, putting expected new-crop revenue $13.60/acre firmer on the week at $728.00. With anhydrous priced at $653.21 this week, the ZCZ/NH3 spread widened 16.46 points and now lies at -74.79.

However, corn futures ended the overnight session 3 to 6 cents lower amid pre-report position squaring ahead of today's S&D reports. Traders look for this morning's report to show old-crop corn carryover up around 6 million bu. from last month to 1.487 billion bu. after USDA slashed carryover more than expected last month.


Regionally --

Anhydrous softens $2.86 to $653.21; UAN28 is 64 cents higher week-over to $354.09; UAN32 firms $7.00 even to $376.87; Urea $2.19 higher to $529.73.

DAP $2.38 higher to $558.58; MAP falls 65 cents lower to $577.20. Potash firms $2.31 to $463.02.

Farm diesel firms 3/4 cents to $3.59 1/4 -- now 5 1/4 cents below year-ago. LP softened 10 cents to $2.68 -- now $1.18 above year-ago.

Week-over Change
Current Week
-65 cents
+64 cents
Farm Diesel
$3.58 1/2
+ 3/4 cent
$3.59 1/4
- 10 cents


 Photo credit: D. Michaelsen, Inputs Monitor




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