Inputs Market Update: Anhydrous Leads Again as Diesel Slips

Gains tallied $9.09 to Declines’ $0.01 in the regional averages.

Anhydrous ammonia was our upside leader this week although its upward trajectory flattened a bit. UAN28% was our second biggest gainer, firming a little over $2 on the week. Other fertilizers firmed less than that by the short ton, but the overall trend is still higher.

DAP and MAP firmed by about the same amounts this week which may be a bullish indicator. Since we are only 50% filled on spring phosphate, we expect to issue advice to purchase remaining phosphate needs later this week. We want to check in on the fundamentals before we pull the trigger to make sure there have been no new developments. We still

maintain that phosphate price action will not include sharply higher prices near-term, but prices have continued higher since bottoming in mid-January. DAP has firmed 2.05% since then and MAP has added 2.7%. As a means of comparison. Our Nutrient Composite Index has firmed 8.01% from its low and anhydrous has added 8.7% and urea has firmed 13.1% from its late 2016 low.

So by comparison, phosphate has not really firmed very aggressively, but we do believe the bottom is in and therefore, fully intend to book DAP and MAP for spring this week.

Farm diesel softened a penny regionally amid

sideways crude and heating oil futures. Our outlook is a bit uncertain right now as distillate supplies are strong enough to influence farm diesel lower, but without significant declines in crude oil or heating oil, diesel price pressure will be limited. We also suspect spring fieldwork will keep a floor under diesel on the basis of increased farmer demand. We are 75% filled on diesel and will stay hand-to-mouth for the time being. Fundamentals point to sideways near-term price action but if this week’s mild price pressure continues, we will reward a move below $2.00 per gallon regionally.

Get current with our advice. You should be 100% filled on spring/summer nitrogen, 100% filled on potash, 50% filled on spring phosphate and 75% filled on farm diesel for spring fieldwork.

Corn Futures -- December 2017 corn futures closed Friday, March 3 at $3.99 putting expected new-crop revenue (eNCR) at $639.54 per acre -- firmer $13.68 on the week. With our Nutrient Composite Index (NCI) at 530.25 this week, the eNCR/NCI spread widened 9.06 points and now stands at -109.29. This means one acre of expected new-crop revenue is priced at a 109.29 premium to our Nutrient Composite Index.

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