Weekly Fertilizer Review

While retail fertilizer remain mostly steady to a little softer as farmers push fieldwork and planting this week, wholesale prices for urea continue to fall under the weight of a slow international market.

Ammonia prices were firm last week in the heart of the Corn Belt, though some fertilizer companies are scaling back acreage estimates due to planting delays. Dealers likely aren't interested in restocking with plans still uncertain, as producers begin to weigh costs and benefits of switching to soybeans if they won't be able to plant in a timely fashion. On the Plains $780 is becoming a more popular price, but in Iowa and Illinois costs are $100 higher. USDA put the average cost in both states last week above $880. Current fair value given wholesale prices is in line with the lower Plains price, with fundamentals also pointing lower. Costs were reported steady last week internationally, with the Black Sea at $462.50.

UAN extended its slow drip lower at the wholesale level, losing another $1.50 a ton at the Gulf to $317.50 for 32%. Swaps for summer delivery remain down to $270, thanks to increasing imports. Retail prices aren't showing much movement yet, though prices appear to be firming in the Southeast. Current wholesale prices translate into a fair value around $405 for 28%. That's a more common cost in the west, but central Corn Belt is $10 to $20 lower, as farmers there don't know how much will be needed for sidedressing.  

Urea dropped more than $20 a ton at the Gulf, falling to $325.50 as large imported supplies and soft demand globally weigh on prices. Summer contracts are down to $321, suggesting no upward price pressure yet, with the Black Sea faltering $7 to $313 and Middle Eastern prices lower too. Those costs translate into fair retail value around $511 on the spot market and $497 for summer, with the market coming in line with global fundamentals of supply and demand. Retail prices continue to run mixed. USDA reported the average price in Illinois last week down $2.50 a ton to $527.50, while Iowa lost $10 to $577.50. Updated offer sheets on the Plains this week are $480 to $510.

Phosphate prices lost another $1.50 for DAP at the Gulf to $421, with values in the export market even softer. Prices for summer aren't showing much downside, after prices fell $50 over the winter and spring at the wholesale level. Those Gulf prices translate into fair value around $511 to $520, with fundamentals only slightly higher. However, retail prices remain much more expensive. Updated offers on the Plains are still at $590 to $605, with the Illinois average at $600 according to USDA.  MAP in Iowa was at $672.50, with the Plains at $615 to $630.

Potash remains mostly soft, though active fieldwork is firming prices in some areas. USDA reported the average price in Iowa up $7.50 to $625, but Illinois was down $5 to $567. Updated prices sheets from the Plains were in the $540 to $565 range, with the bottom of the range close to our projected fair value of $530. Domestic sales were flat in April, though exports out of North America increased for the fifth straight month. Inventories declined slightly but remain above average. Mosaic became the latest producer to announce plans to delay expansion, citing low prices and high labor costs in Canada.

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Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and farm management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key farm crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.