Inputs Monitor Regional Market Report -- Natural Gas Explores Upside, Corn Flies South

April 8, 2013 05:29 AM
 

Nutrient pricing was slightly higher week-over, but most gains were flat. UAN28 and urea accounted for the strongest gains for the second straight week, but anhydrous headed lower along with DAP and MAP.

Gains outpaced decliners again this week adding 7.391 to decliners' 2.860 -- a margin of 4.531. Lower corn futures and exceptionally high front-month natural gas are both a result of winter's long tail. Growers over much of the Corn Belt have had to wait to get into fields and while reports from down south are that a good deal of the 2013 corn crop is going in, northern growers are still waiting for fields to thaw and for conditions to turn more favorable to iron in the field.

Rain is forecast over the Midwest this week along with more seasonal temperatures. But while the moisture is welcome, rains this week could add another week to farmers' wait-time to get planters rolling and while the long winter has been a hay-day for natural gas profit takers, warmer temperatures could limit upside room for May 13 nattie.

Anhydrous fell $1.17 to $880.83 after holding for two weeks at $882 even; UAN28 climbs $3.91 to $398.16; UAN32 moves $0.44 higher to $435.66; Urea $2.42 higher to $573.08.

DAP continues to move lower dropping $1.58 to $638.83; MAP slightly lower, falling $0.09 to $654.9.

Potash moves slightly higher again adding $0.16 to $580.66.

Farm diesel another $0.02 lower to $3.530; LP increased just $0.001 to $1.495 with all states unchanged week-over except Nebraska.

Nutrient/Fuel
3/25/13
4/1/13
Current Week
Week-over Change
Anhydrous
$882.00
$882.00
$880.83
-$1.17
DAP
$641.41
$640.41
$638.83
-$1.58
MAP
$655.50
$655.00
$654.91
-$0.09
Potash
$580.08
$580.50
$580.66
+$0.16
UAN28
$392.58
$394.25
$398.16
+$3.91
UAN32
$436.55
$435.22
$435.66
+$0.44
Urea
$569.58
$570.66
$573.08
+$2.42
Farm Diesel
$3.566
$3.550
$3.530
-$0.02
LP
$1.499
$1.495
$1.496
+$0.001
Composite
462.532
462.566
463.021
+0.455

 

UAN28% solution posts the highest gain in the index this week adding $3.91/ton with Urea not far behind adding $2.42. UAN28's strong move was on the back of a $30.00/ton increase in Wisconsin where carryover nitrogen may have growers eyeing 28% solution as a sidedress option. Urea was an evenly mixed bag of increases and declines in the +/- $3 range resulting in a 0.42% increase.

Phosphates stole the show as both DAP and MAP moved lower. We have observed world phosphate rock and ammonia pricing ease and with phosphate pricing still high from the historical perspective, downside room will depend on domestic production as phosphates continue to make gains toward the national supply.

Declines in ammonia are also benefiting anhydrous pricing as we have seen NH3 on a downside slide for about a month now. High front-month natural gas could signal higher nitrogen pricing across the board if this higher priced supply makes its way into the production stream. But savvy upstream purchasers will likely wait until this weather market plays out and natural gas falls before booking feedstock. In the event natural gas remains at the top of its range for an extended period of time, Trinidad ammonia would make a convenient alternative and may hold sway over purchasing decisions upstream.

Meanwhile, December 2013 corn futures continue to struggle as traders are more interested in placing their money in the stock market and natural gas. Rumors have surfaced that feedlots are taking advantage of lower corn prices, but we don't expect enough demand from these purchases to have much impact on the market at large.

December '13 corn opened today at $5.33. If sold at these prices, 2013 new-crop revenue would amount to $812.80/acre. Pro Farmer Chief Editor Chip Flory remains hopeful, "We've still got 17 months to market this crop. There is still plenty of time, and plenty of weather related uncertainty for a rally...don't panic"


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