The turbulent spring of 2019 continues to wreak havoc on farmers’ planting plans, and the weather’s having just as much influence on the fertilizer market too. As the window for corn planting closes, some farmers must shift nitrogen sources or crop choices.
Ammonia is the softest part of the N-P-K complex right now, both in the U.S. and around the world. Retail prices haven’t budged recently because it’s too late for most farmers to use it. That could leave dealers with some leftover supplies they may be willing to make deals for – especially with a global market continuing to look soft. Costs out of the Black Sea slipped below $200 a ton this week, $15 cheaper than the May settlement price at the Gulf. Those levels translate into retail values between $400 and $430, some $200 below average values last reported in the Midwest. Whether or not the market gets there is another question, but farmers should key one eye on this market for opportunities when the supply chain gets back to normal.
Urea ended up for the week but off highs, gaining $10 on wholesale markets while adding $11 at retail levels. While growers still needing nitrogen are buying, others are changing gears and planting soybeans, making prices variable. Dealers raising prices added as much as $40 to $60 a ton, though terminals at the north end of the river system were sold out. Barges are moving up river again but likely won’t make it in time to ease shortages. International markets are also firm thanks to recent purchases by India with summer markets likely depending on when that big importer steps into the market again. In the meantime, average retail prices this summer could ease back to around $365 before firming again into the fall.
UAN is in the hot seat for growers needing nitrogen. That demand has dealers raising prices for 28% $5 to $15, with costs running $235 to $275 on the southwest Plains and averaging $280 in the Midwest. Values at the Gulf for 32% appear to have bottomed while the retail market showed little activity until recently. As a result retail never broke to match the pullback on the international market, which means local markets may not have to move much unless demand overwhelms supply. Costs could fade to $225 at retail for 28% but that will be for those needing product for fall.
Phosphates are cheaper on retail markets as growers forego applications and dealers recognize how much any inventory they own has lost value on international markets. The cost of DAP at the Gulf have dropped more than $100 a ton since fall, so retail prices ultimately could head towards $400 when inventory restocking takes place.
Potash likewise appears to be suffering a bit from the wet spring, though only incrementally. Wholesale prices slipped a buck or two on weaker demand. That puts retail prices fairly valued at $386. Some producers are cutting production, which could limit the summer pullback.