Summer is normally a good time to buy fertilizer for the following year’s crop. But the chaotic spring of 2019 likely will disrupt seasonal trends. In the meantime, growers with storage and cash should look for leftover inventory dealers may be willing to dump to avoid getting stuck with products purchased at higher values.
Ammonia has mostly been on the sidelines thanks to lack of fall and spring fieldwork as farmers still needing nitrogen seek other supplies. International prices continue to drift lower, which should make new inventory up to $175 a ton cheaper than prices farmers paid this spring. But when and if the new supply will make it into the supply chain remains uncertain. Closure of a key pipeline this fall and a likely late June or even July opening for the river system mean plenty of questions. Some terminal prices are starting to fade, however. And potential for higher corn prices in 2020 could make ammonia sought after again. June settlement for Gulf contracts fell to $200 a short ton, the lowest in nearly two years.
Urea values last week depended on which end of the supply chain you’re on, and perhaps where as well. Farmers still scrambling to find nitrogen paid more, with our average retail price up nearly $9 to $415. But prices at the Gulf slid $15.50 to $245.50 as that supply can’t make it north of St. Louis or up the Arkansas River where it’s needed. Better demand is appearing overseas, raising the international market even as the U.S. falters. Based on the current Gulf price retail urea could eventually drop to
$355 on average, if the transportation system ever gets sorted out. By the time it does, India could be back in the market for tenders that typically set the tone globally.
UAN was very quiet last week, as farmers pushed to plant corn following passage of deadlines for full coverage crop insurance. How much they got in may direct where UAN goes in the short term. But the swaps market, at least, sees lower Gulf prices into the fall, about $20 decline from current 32% costs of $175. Eventually that could bring down the retail cost of 28% to around $225 on average.
Phosphates had a weaker tone last week, at least at some wholesale markets. Gulf prices edged $2.50 to $317.50 as companies sold barges for summer restocking. Refill prices could be even higher as manufacturers hope higher corn prices will encourage fall applications after lows levels on the 2019 crop. However export prices out of Tampa slipped $20.50, reflecting a global market with plenty of supply. Retail DAP looks fairly priced later this summer around $400 – if it can ever get into position.
Potash prices continued to slowly drift lower, but at a snail’s pace. With the Gulf down $1 to $264, retail prices currently averaging around $385 look fairly priced. Watch for news about summer fill programs.
Download the complete PDF with the link below to seek forecasts and charts for major products.
For more information about national and international fertilizer markets, go to Fertecon.com.
Download a complete version of the outlook with extensive charts and analysis using the Download button at the end of this report.
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 Adviser. He conducts Farm Futures exclusive surveys on acreage, production and 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 crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.