Inputs Monitor Regional Index: Seasonal Upswing Yet to Arrive

December 16, 2013 04:13 AM
 

Declines tallied $13.75 to gains' $8.14 in the regional averages. Nutrient pricing continues to slide and growers in the Central Belt are already considering cutting P&K applications in the spring in the face of uncertainty in corn futures. At least one grower I spoke to Saturday said he is concerned enough with corn returns in 2014 that he may skip P&K altogether come spring. DAP, MAP and Potash all moved mildly lower on the week.

Meanwhile, UAN solutions and urea moved higher along with LP. During the strong declines observed starting in late summer 2013, UAN solutions fell the least. Demand for solutions is expected to rise in the coming spring and over the next few years as split applications become a bigger part of more operations. This has anhydrous ammonia trapped in price discovery mode and Nebraska and Kansas now boast a $500 handle on a ton of anhydrous.

Officials from the European Union said on Sunday they will suspend trade talks with Ukraine who has since inched closer to Russia's Customs Union. Protesters filled the streets of Kiev again over the weekend as peaceful demonstrators have barricaded themselves in the nation's political hub, Independence Square. Surveys have shown that the majority of citizens prefer a path to western reforms as laid out by the E.U. But pressure from Russia is likely too great for President Yanukovych to ignore and most now believe Ukraine will side with Belarus, Kazakhstan and Russia rather than signing an Association Agreement with the European Union.

Corn Futures --

Today, the Dec14 corn futures contract (ZCZ14) opened 20 cents lower than last week's report at $4.49 1/2. Based on that, expected new-crop revenue lies at $679.20/acre at 160 bu.

The ZCZ/NH3 spread narrowed 16.87 points on the week and currently lies at -15.18 with Dec 14 corn futures on top.

Futures had little to smile about as USDA's S&D report reported ample corn supplies and despite breakneck runs at ethanol refiners, December futures continue to explore the low. Many now believe corn futures will be rangebound until 2016 when supplies will have a chance to rebalance. To the good, however, low corn prices mean low fertilizer prices. In years past, fertilizer prices have long since headed seasonally higher after the close of the application window. This year, tepid demand for nutrient, low corn prices and strong producer inventories are holding nutrient at the low end.

This could signal an upside breakout by spring, but the spread between an acre of new-crop revenue and one ton of retail anhydrous narrowed nearly by half on the week suggesting limited volatility near-term.

-----------------------------

Regionally --

Anhydrous falls $5.53 to $664.02; UAN28 92 cents higher week-over to $321.14; UAN32 firms $1.94 to $349.86; Urea $5.24 higher to $457.92.

DAP $1.95 lower to $523.26; MAP $3.47 lower to $555.28. Potash falls $2.80 to $478.38.

Farm diesel softens 1/2 cent to $3.42 -- 15 cents below year-ago. LP firmed 4 cents to $1.81 -- now 37 cents above year-ago.

Nutrient/Fuel
12/2/13
12/9/13
Week-over Change
Current Week
Anhydrous
$667.72
$669.55
-$5.53
$664.02
DAP
$527.55
$525.21
-$1.95
$523.26
MAP
$558.90
$558.75
-$3.47
$555.28
Potash
$482.31
$481.18
-$2.80
$478.38
UAN28
$319.65
$320.22
+$0.92
$321.14
UAN32
$349.73
$347.92
+$1.94
$349.86
Urea
$452.11
$452.68
+$5.24
$457.92
Farm Diesel
$3.395
$3.425
-1/2 cent
$3.40
LP
$1.749
$1.77
+$0.04
$1.81
Composite
373.683
373.415
+0.62 1/2
372.791

 

Happy Holidays -- elvis 4

Due to our reporting schedule and the upcoming Christmas Holiday, there will be no Inputs Monitor reports next week. We will resume coverage the following week with our regular Monday morning reports on December 30. To our subscribers, thank you for your support and insight throughout the year. With crop prices at long time lows, there has never been a better time to stay current on retail fertilizer pricing. We at the Monitor have big plans for the coming year including a greater state-by-state focus on fertilizer and farm fuel prices.

The application window may be closed for the season, but you can stay informed through the winter on the issues and trends impacting your bottom line with your Inputs Monitor. Merry Christmas and happy holidays from all of us here at your Inputs Monitor.


 

 

 

 

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