P&KToday: P&K S&D

March 20, 2014 10:46 AM
 

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Potash prices moved only mildly higher on the week adding just 3 cents to the regionwide average. Missouri K fell $6.00 and Wisconsin fell $10.00 with Nebraska adding $5.00. Other moves were within a few dollars higher or lower, but potash seems to want to level off here. The reason can be found in PotashCorp's recent release of P&K supply & demand data that shows a sharp decline in exports and production compared to the same time last year. Production is 12% below year-ago and exports are currently 9% behind last year's pace. Meanwhile, domestic sales are 23% above year-ago.

Current inventories lie just below last year but remain 14% above the five-year average. Strong domestic shipments suggest restocking across America may be nearly complete and fresh pricing points are in place. Given these numbers, added to the notion that crop prices will limit spring K applications, we see very little that would excite potash pricing. Overhanging inventory, slow exports, declining production and strong domestic shipments will likely add up to flat pricing near-term.Picture1

Phosphate paints a much different picture. The same report from PotashCorp notes declines in production (-8 1/2% y-o), exports (-23 1/2% y-o) and disappearance (-20% y-o) for both DAP and MAP. Those three declines may be strong enough to insulate pricing from upside risk, but the glaring difference between the potash supply and the phosphate supply is in the inventory. With potash, ending stocks are very strong meaning there is plenty of product to be had. Phosphate ending stocks are currently 13 1/2% behind the five-year average and 11 1/2% behind year-ago. We are comfortable with potash near-term because of the inventory overhang it now boasts.

Not so with DAP/MAP. Phosphate inventories are very low at present and production has yet to respond. We could theorize all day about why U.S. phosphate producers are holding back at the production end -- how much time have you got? Read more in our article from earlier this week, "Don't Get Caught in A Phosphate Bottleneck". We see upside risk moving closer to spring applications. We will watch our southern states' pricing on this to indicate a pending spike, and applications have already started in some deep south locations.

DAP and MAP prices moved higher again this week, and potash followed.

  • DAP $77.27 below year-ago pricing -- up $7.31/st on the week to $565.89/st.
  • MAP $72.57 below year-ago -- up $4.81/st this week to $582.01/st.
  • Potash $117.78 below-year ago -- up 3 cents/st this week to $463.05/st.
  • December 2014 corn futures opened 2 3/4 cents higher this morning than our last P&KToday at $4.87 3/4. The national average corn basis softened 3/4 cents from last week to stand 3 1/2 cents under May futures. The national average cash corn price softened 1 1/2 cents from last week to $4.84 1/4.

 

By the Pound --

DAP is 1 1/4 cent higher at 58 3/4 cents/lbP2O5; MAP is up 1/2 cent to 54 3/4 cents/lbP2O5; Potash 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 March 14, 2014.

P&K pricing by pound -- 3/14/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.58
$0.56
$0.39
Illinois
$0.60
$0.51
$0.38
Indiana
$0.59
$0.55
$0.38
Wisconsin
$0.55
$0.54
$0.35
Minnesota
$0.57
$0.53
$0.38
South Dakota
$0.62
$0.57
$0.39
North Dakota
$0.55
$0.56
$0.38
Nebraska
$0.56
$0.54
$0.42
Missouri
$0.62
$0.56
$0.38
Kansas
$0.59
$0.54
$0.38
Ohio
$0.61
$0.56
$0.38
Michigan
$0.61
$0.55
$0.38
Average
$0.58 3/4
$0.54 3/4
$0.38 1/4
Year-ago
$0.68
$0.61
$0.48

 


 

 

 

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