P&KToday: Prices Creep Higher As Demand Increases

April 10, 2014 05:37 AM
 

 index

DAP, MAP and potash all higher by the ton.

  • DAP $67.41 below year-ago pricing -- up $2.46/st on the week to $571.42/st.
  • MAP $60.28 below year-ago -- up $6.53/st this week to $594.63/st.
  • Potash $111.13 below-year ago -- up $1.98/st this week to $469.53/st.
  • December 2014 corn futures opened 8 1/2 cents higher this morning than our last P&KToday at $5.05. The national average corn basis is unchanged from last week at 2 1/4 cents under May futures. The national average cash corn price firmed 6 1/4 cents from last week to $5.00 at yesterday's close. Picture1

 

Potash prices moved higher but were mostly unchanged from state to state. Increases this week came out of Minnesota and the Dakotas, each up by roughly ten dollars per ton. Our downside mover was Kansas which fell back $13.00 by the ton. I had thought about filling the remaining 20% on spring potash this week, but declines in Kansas suggest K's upside potential has run out. Canadian inventories are strong and demand has been expected to be low. But cash corn went for $5.00 yesterday and that will incentivize P&K applications.

Injecting upside risk are reports that suppliers are having trouble with rail deliveries, and product movement has slowed to a crawl. That will inject volatility into the retail market and widen the range of prices, based on the level of local supplies. Those who have stocked up and have product in the warehouse now should be able to avoid transit related expenses, and prices there will stay flat. However, an Indiana grower tweeted last week that his supplier could not get potash from their local rail head because of transport delays -- a problem we found across the Midwest. That will inject price strength in areas similarly affected.

Picture2

Phosphate has a little different deal going. Inventories are not nearly as strong here as with potash, but neither is global demand. Phosphate production in India has been on the rise, slowing phosphate imports, and the same is true of China, although to a lesser degree. Production increases in those two countries mean more U.S. product will stay in the U.S. -- about 90% of the phosphate applied in the United States is domestically produced.

Declining export demand generally means prices will have to go down, but that is usually in a climate of demand discovery. As export demand dries up, domestic demand will have to account for more sales. That puts U.S. growers squarely in the drivers seat of the discovery process. But if phosphate producers take too much inventory out of the market, pockets of shortage will likely have to pay higher prices. In that event, growers have shown they are more than willing to cut back on phosphate to save the bottom line. In the next few years, North American demand for phosphate will balance itself with price and available domestic supply, on the basis of decisions on the farm.

By the Pound --

DAP is unchanged again this week at 59 1/2 cents/lbP2O5; MAP is up 3/4 cent to 56 cents/lbP2O5; Potash up another 1/4 cent on the week to 38 3/4 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 April 4, 2014.

P&K pricing by pound -- 4/10/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.55
$0.57
$0.39
Illinois
$0.61
$0.52
$0.38
Indiana
$0.61
$0.56
$0.39
Wisconsin
$0.56
$0.55
$0.35
Minnesota
$0.57
$0.55
$0.40
South Dakota
$0.63
$0.59
$0.40
North Dakota
$0.59
$0.59
$0.39
Nebraska
$0.59
$0.56
$0.43
Missouri
$0.63
$0.56
$0.39
Kansas
$0.60
$0.57
$0.39
Ohio
$0.60
$0.55
$0.38
Michigan
$0.61
$0.55
$0.36
Average
$0.59 1/2
$0.56
$0.38 3/4
Year-ago
$0.67
$0.61
$0.48

 


 

 

 

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