Growers looking to book fall nitrogen need to sharpen their pencils – and perhaps dust off their crystal balls. Dealers should be putting out updated prices sheets soon though tumultuous grains markets are creating plenty of turbulence. With costs for other nutrients on the rise, leftover supplies could offer at least a little bargain for those with on-farm storage.
Ammonia prices could see significant reductions soon when dealers put out new offers for summer and fall delivery. Though no changes showed up last week yet, terminal costs were down sharply as the market continues its shift from the 2018 spring application season to prospects for 2019 crops. Growers with on-farm storage who can take delivery this summer should see costs typically running $350 to $400 in the central and eastern Midwest, with charges on the Plains $40 lower. As usual, those able to buy directly from terminals or plants should be able to save even more. Still uncertain, of course, is demand, at least here in the U.S. Despite the trade dispute between the U.S. and China, the ratio of 2019 soybean to corn futures is around 2.33 to 1 – just under its long-term average. Otherwise, nitrogen prices continue to ratchet higher globally, though increases are modest so far.
Urea remains a market with two narratives. Retail prices edged lower last week, though not many dealers appear to be changing prices this late in the season. Our average retail cost was down nearly $2 to $347, continuing a modest pullback from seasonal highs this spring. Global prices, meanwhile continue to reflect a more optimistic tone. Even though leading importer India is still on the sidelines, lack of exports from China and demand elsewhere firmed the market at the Gulf more than $30 a ton. Based on those higher costs, average retail prices could be $25 to $30 higher later this summer, and swaps into fall show only a little softening.
UAN edged higher on the spot retail market and some wholesale pricepoints thanks to some late application and overall stronger demand as more growers used the product either by choice or necessity. But with corn canopied and pollination drawing closer, look for prices to soften. Our current average retail cost for 28% is $237, close to replacement value based on Gulf prices of $172.50 for 32%. Swaps show prices falling into September, perhaps taking retail costs below $220.
Phosphates ratcheted higher again last week, getting a boost from higher nitrogen costs and limited availability. The current retail cost of DAP rose $1 to top $489, a little cheaper than immediate replacement values because the Gulf jumped $7.50 to $397.50. Growers likely will pay around $495 for product this summer. Swaps don’t show much if any increase in prices into the fall, if imports keeping meeting demand.
Potash also edged higher last week at both retail and wholesale pricepoints and that may just be the start of higher costs for growers this summer. Canadian companies raised their prices enough to potentially add $20 or more at the retail level. Our average retail prices of $345.50 looks cheap compared to currently replacement value, which is running $17 higher. Lower crop prices may be the best bargaining chip farmers have currently.