P&K Today: Vitamin K on a Hair Trigger

February 6, 2014 09:46 AM
 

Potash, DAP and MAP prices all edged higher this week.Picture7

We are on a hair trigger here. Currently, we are 80% filled for spring on phosphate and 30% filled on potash. There is a lot of talk that the Chinese price recently tendered with Uralkali at $305.00 set the floor. Overall, our regional price is up 11 cents on the week to $461.83. We let a hook just like this one pass us by in Nh3 before we pulled the trigger two weeks later. That turned out to be a good move and I would like to see a stronger indication the downside is exhausted for vitamin K before we increase coverage. Eleven cents, a rally does not make.

Another factor putting us on edge over potash is mild strength in December '14 corn. We opened this morning at $4.56 and tested $4.60 before fading a cent and a half, but we are currently 11 1/2 cents above week-ago. Export demand is helping buttress corn futures but the March '14 oats contract is doing its part as well.Picture3

Pro Farmer Senior Market Analyst Brian Grete notes, "March oat futures have rallied more than $1 since the beginning of the year and pushed to an unusual premium to front-month corn futures overnight. Logistic problems in Canada are the reason for the sharp rise in oat futures, lowering the available supply to the market and rallying futures. The logistic problems in Canada aren't going away anytime soon. If the adage that "oats knows" holds true and that market continues to rally amid a supply crunch, it could cause corn traders to look past their bearish bias for that market and rally corn futures."

In other words, if strength in oats futures 'sticks' in the corn market and corn surpasses oat pricing on a sustained rally, potash prices will follow. In addition, strength in corn may bring some demand back into the K market owing to larger expected new-crop returns.

Wholesalers, Chinese tenders and oat futures are all suggesting the floor is in place for potash. Meanwhile, eight of twelve states in this week's Monitor Index moved at least slightly higher on potash. Replacement values will look to capture a portion of the $122.58 potash has fallen below year-ago pricing. We do not expect potash to recapture the entire $122.58, but we do not expect K to watch phosphate and corn futures gain strength without responding to the upside soon. Hold 'em Kenny Rogers... let it ride until next week. We will book aggressively on confirmation of the uptrend.

This week --

  • DAP $118.59 below year-ago pricing -- up $5.41/st on the week to $520.24/st.
  • MAP $118.81 below year-ago -- up $8.47/st this week to $541.69/st.
  • Potash $122.58 below-year ago -- up eleven cents/st this week to $461.83/st.
  • December 2014 corn futures opened 9 1/2 cents higher this morning than our last P&K Today at $4.56 with the national average cash corn price 16 cents higher from last week at $4.45. National average corn basis softened 1 cent on the week to 1 3/4 cents above March futures.

 

By the Pound --

DAP is unchanged at 53 1/2 cents/lbP2O5; MAP is 3/4 cent higher by the pound at 50 3/4 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 Jan. 31, 2014.

P&K pricing by pound -- 2/6/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.52
$0.51
$0.40
Illinois
$0.51
$0.50
$0.38
Indiana
$0.53
$0.51
$0.38
Wisconsin
$0.49
$0.52
$0.34
Minnesota
$0.52
$0.49
$0.38
South Dakota
$0.51
$0.49
$0.38
North Dakota
$0.55
$0.49
$0.38
Nebraska
$0.53
$0.50
$0.43
Missouri
$0.53
$0.52
$0.38
Kansas
$0.56
$0.52
$0.40
Ohio
$0.58
$0.52
$0.38
Michigan
$0.60
$0.52
$0.36
Average
$0.53 1/2
$0.50 3/4
$0.38 1/4
Year-ago
$0.67
$0.62
$0.48

 


 

 

 

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