P&K Today: Nobody has Time to Talk

October 24, 2013 08:05 AM

Phosphate and Potash continue to look for demand as producer inventories climb. Suppliers and end-users are expected to enter the market soon, but most are holding out as long as they can before booking tonnage. This could pose a problem if harvest is delayed by weather and forces fertilizer applications to hold off till spring. With year-over declines averaging over $100.00/short ton, nutrient is going to have to try and make some ground back, but the upside is limited by low corn futures pricing and even more limited by the lack of demand.potash

However, today notes a shift and as I placed a few phone calls to retailers to check in, nobody had time to talk as business picks up and fall tons are beginning to move in a hurry. This would confirm the floor for nutrient as prices have finally merged with demand. Also playing into increased purchases is time. Snow is starting to stick in Wisconsin and other northern areas and the fall application window is quickly shrinking with Thanksgiving just 5 weeks away.

Purchases in the corn belt will buttress the floor at current levels with more upside risk than downside potential. Weighing on P&K prices is December corn which opened today at $4.42. That and strong inventories will hold P&K pricing near current levels through Thanksgiving.

This week --

  • DAP $114.66 below year-ago pricing -- down $12.67 on the week to $534.09/st.
  • MAP $96.45 below year-ago -- up $1.17 this week to $568.38/st.
  • Potash $110.09 below-year ago -- up $2.20 to $493.49/st.
  • December corn opened today at $4.42 with basis 2 3/4 cents softer on the week to 9 cents below December futures.


By the Pound --

DAP 1 1/4 lower to 56 cents/lbP2O5; MAP unchanged at 53 1/4 cents/lbP2O5; Potash firms 1/4 cent by the pound to 41 1/4 cents/lbK2O.

The following is an updated table of P&K pricing by the pound.

P&K pricing by pound -- 10/24/2013

DAP $P/lb

MAP $P/lb
Potash $K/lb
South Dakota
North Dakota
$0.53 1/4
$0.41 1/4


Wholesale -- phosphate

MosaicCo reports DAP moved lower over the past week at Tampa, Central Florida and NOLA. MAP for Brazil firmed $5 while raw phosphate rock from Morocco softened 5 bucks of its own. U.S. ammonia slid sideways for the second straight week while wholesale sulfur remained unchanged.

Wholesale MOP moved sideways in the U.S. Corn Belt indicating prices are pausing to test demand at the current price.

Near-Term Outlook --

  • Look for potash to level off at current levels with mild upside potential based on corn futures, but a lot of tonnage still needs to be booked for fall. A demand crunch either in the coming weeks or the spring may inflate pricing.
  • Sideways movement in wholesale ammonia and in potash will hold phosphate in place at or near current pricing until one or the other breaks higher.


Inventories of P&K are high presently with September potash tallies in Saskatchewan pushing 42% above the five-year average. North American combined DAP/MAP stocks ended September 53% above year-ago and 29% above the seven-year average.

The year-over pricing margin widened this week for all four of the below nutrients. Potash firmed 0.3% from last week's 18.5% below year-over pricing to stand 18.2% below year-ago; DAP slid another 2.5% below year-ago to 17.6% below year-ago; MAP firmed 0.2% to widen the year-ago margin to 14.5% below, and anhydrous gained 0.5% during the week to end at 16.9% below last year's price at this time.

These moves are small by percentage and support the notion that prices are bottoming.

Current price/short ton
Percent of year-ago


redflag boxPerspective --

If you have not yet booked fall potash we have recommended you have 75%-100% of fall needs filled by now and at least 20% of spring needs as a hedge against a winter potash correction. Prices are so far below year-ago it is hard to go wrong at this point, but $4.46 has shown itself to be tough resistance for December corn and the hurdles are layered every 6-10 cents to the August 27 daily high of $5.04 1/4.

A violation of resistance around $4.50 may be enough to spur P&K higher, but we see sideways movement for nutrient on the basis of high producer inventories, very little buying interest, and the bleak outlook for an upside breakout for deferred corn contracts.




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