P&K Today: The Last Watering Hole

February 20, 2014 04:17 AM
 

josh and footprints lPotash, DAP and MAP prices all moved higher again this week.

This week, expected new-crop revenue rises above $700.00 with December 2014 futures opening today at $4.67 3/4. The break even point across the United States averages between $650.00 and $750.00 per acre depending on land costs and other production expenses. But today's push above $700 to $708.40 may give growers the breathing room they need to feel good about applying P&K this spring.Picture5

After speaking to a great group of growers in Peoria earlier this week, we note a perspective shift. When crop prices will recover is unknown for sure, but projections have commodity prices continuing to range lower through the next few years. Given that and last year's strong returns, this is starting to look less and less like the year to cut back, and more like the last chance to bank P&K for a few years.

P&K inventories are set to handle 'normal' year-on-year demand and the discount between fertilizer prices and old-crop sales is wide. Cash on hand from the prior crop is more than enough for most to handle a decent P&K application and if new-crop returns are below last year's, now is the time to lay-in for tough times ahead. This comes as phosphate prices head strongly higher and potash looks to follow soon.

Picture1

We have advised to fill 80% on spring P&K and perhaps you will find that remaining 20% is the portion you want to leave off this year as your margins tighten.

As commodity specialists and market analysts project a few years of corn prices below $5.00 ahead, we expect an even stronger move away from P&K applications in the spring of 2015. Fertilizer prices have low new-crop returns already baked in for the moment, but as I said above, P&K are headed higher along with urea and UAN and will be above today's price levels by spring.

It is difficult to know exactly where commodity prices are headed, but the present expectation is for lower returns than we saw in the previous few years. That will keep the squeeze on farm budgets and to avoid a possible fertilizer price recovery getting in the way of new-crop returns in '15 and
'16, spring 2014 may be the last P&K watering hole
before a long, dusty walk.ZCZ14

  • DAP $115.91 below year-ago pricing -- up $4.43/st on the week to $528.50/st.
  • MAP $98.55 below year-ago -- up $13.32/st this week to $556.20/st.
  • Potash $120.33 below-year ago -- up $2.57/st this week to $462.18/st.
  • December 2014 corn futures opened 10 3/4 cents higher this morning than our last P&K Today at $4.67 3/4. The national average corn basis firmed by 1 3/4 cent from last week to stand 2 1/4 cent over March futures. The national average cash corn price firmed 15 1/2 cents from last week to $4.56.

 

By the Pound --

DAP is a full penny higher at 55 cents/lbP2O5; MAP is 1 1/4 cent higher at 52 cents/lbP2O5; Potash is unchanged on the week at 38 1/4 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 February 14, 2014.

P&K pricing by pound -- 2/20/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.53
$0.51
$0.40
Illinois
$0.55
$0.49
$0.38
Indiana
$0.57
$0.53
$0.38
Wisconsin
$0.51
$0.54
$0.35
Minnesota
$0.52
$0.50
$0.38
South Dakota
$0.52
$0.54
$0.39
North Dakota
$0.55
$0.53
$0.37
Nebraska
$0.51
$0.50
$0.43
Missouri
$0.56
$0.53
$0.38
Kansas
$0.56
$0.54
$0.40
Ohio
$0.60
$0.53
$0.38
Michigan
$0.61
$0.52
$0.36
Average
$0.55
$0.52
$0.38 1/4
Year-ago
$0.68
$0.61
$0.48

 


Photo credit: Vu Bui / Foter / CC BY-NC-ND

 

 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close