P&K Today: Spring Demand Could Go Either Way

January 2, 2014 07:55 AM
 

P&K retail prices fell slightly on the week with MAP leading declines.

Looking forward to the year ahead, rumors of skipped P&K applications have industry watchers targeting a demand driven market by spring. Meanwhile, growers who liked $4.23 as support for cash corn have reason for optimism. But a lot of crop producers have told your Inputs Monitor that they have banked P&K over the last two years, and may look to capitalize on that this spring, by minimizing P&K rates. The talk of a corn price recovery is kicked farther down the road with each speculation offered. If growers expect prices to get worse before they get better in the long-term, there are those who will reward nutrient's current setback by applying this year, banking for the next.

That would put domestic spring P&K demand at or slightly below the previous spring. High springtime demand would offer some much needed relief for retailers who have watched P&K prices spiral downward since July amid moderate inventory overhang and depressed prospects for new-crop revenue. An uptick in spring demand could inject some strength into P&K pricing and jolt nutrient prices out of demand discovery mode.

Many believe fertilizer prices will continue to trail at or below current levels possibly until early March. We will keep our ear to the ground and watch corn futures carefully and if there is to be a demand spike, early March nutrient purchases will let us know. If that is the case we will look to extend spring P&K coverage to protect against higher prices.

Globally, the Belorussian Potash Company (BPC) appears to be set to resume its joint venture for the export of potash. That would mean the single largest potash exporter on the planet would reenter the world scene, supplying product to China, India, South America and other Asian markets. If the breakup of BPC was the impetus for the summer of 2013's sharp declines, a reunion could run potash prices higher. Without some price strength in corn futures however, higher P&K prices would push P&K applications out of growers' financial comfort zone, and would limit U.S. end-user purchases for the coming spring.

This week --

  • DAP $138.15 below year-ago pricing -- down $4.02 on the week to $510.18/st.
  • MAP $116.20 below year-ago -- down $6.68 this week to $539.96/st.
  • Potash $116.32 below-year ago -- down $1.49 this week to $474.43/st.
  • December 2014 corn futures opened 4 1/4 cents lower this morning than our last P&K Today at $4.49 with the national average cash corn price 3/4 cents lower from last week at $4.23. Corn basis firmed 2 1/4 cents on the week to stand a penny above March 2014 futures.

 

By the Pound --

DAP is 1 1/2 cents lower at 53 1/2 cents/lbP2O5; MAP is 3/4 cent higher by the pound at 52 3/4 cents/lbP2O5; Potash unchanged on the week at 39 1/2 cents/lbK2O.

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended Dec. 27, 2013.

P&K pricing by pound -- 1/2/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.59
$0.54
$0.41
Illinois
$0.51
$0.49
$0.39
Indiana
$0.50
$0.48
$0.38
Wisconsin
$0.47
$0.55
$0.38
Minnesota
$0.51
$0.54
$0.40
South Dakota
$0.55
$0.50
$0.40
North Dakota
$0.56
$0.48
$0.41
Nebraska
$0.51
$0.50
$0.43
Missouri
$0.53
$0.48
$0.38
Kansas
$0.55
$0.50
$0.41
Ohio
$0.55
$0.50
$0.38
Michigan
$0.61
$0.54
$0.38
Average
$0.53 1/2
$0.52 3/4
$0.39 1/2
Year-ago
$0.68
$0.61
$0.49

 

Wholesale --

MosaicCo reports wholesale DAP moved higher at all locations except Central Florida which was unchanged. MAP added $16/ton on the week, now at $433/tonne at Brazilian terminals. Wholesale potash softened across the board. Raw phosphate rock from Morocco rolled sideways unchanged and Tampa ammonia remains very firm at $450/ton -- unchanged for several weeks.

The Percentages Year-over --

The figures below give us insight into where prices were last year at this time compared to today's price by percentage. The year-on-year potash margin widened 0.2% on the week to stand 219.6% below year-ago; DAP widened 1.4% at 21.3% below year-ago; MAP widened the gap 1.3% to 17.9% below last year's price, and NH3 widened the year-over gap by 1.7% during the week to end at 25.7% below last year's price at this time.

 
Current regional average price/short ton
Percent of year-ago
Potash
$474.43
-19.6%
DAP
$510.18
-21.3%
MAP
$539.96
-17.9%
NH3
$654.79
-24.0%

 

 

 

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