Weekly Fertilizer Review

aginfo

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Last week we warned that the fertilizer market could be ready to start firming if the rally in grain prices took root. With wheat and corn indeed firm, nutrient costs appear to be trying to turn a corner on wholesale markets. While some dealer costs are in line with our fair value projections, others remain out of whack, and prices are generally higher than a year ago.

Ammonia prices remain a problem as farmers try to finalize spring purchase decisions. Product that might cost $430 a short ton, including freight, to import to the Gulf is $670 by the time it gets to the Illinois River. Farmers are paying upwards of $800, compared to our projected fair value of $640. The latest survey by USDA this week showed prices in Iowa firming $8.25 to an average of $813.25, in a range between $775 and $840, with Illinois even higher last week. To the west, ammonia that costs maybe $150 to make sells for $575 at the plant in Oklahoma, and fetches $145 more from dealers on the northern Plains.

UAN values dropped a buck at the Gulf to $271.50, with March contracts down to $257.50 for 32%. The spot price suggests a fair value farmgate price of around $350 for 30%; USDA put the spread price of 28% in Iowa at $398.50, with 32% at around $425.

Urea prices slipped again this week, with values at the Gulf lf down $4.50 a ton to $391. Forward contracts for March remain at $382.50 but those deferred prices out of the Black Sea are starting to edge higher. While our fair value for urea is around $520, only the cheapest quote found by USDA in Iowa was at that level. The average there was $577, with some prices as high as $660. The good news is that international prices for May and June are $30 to $35 lower.

More at http://farmfutures.com/story.aspx/weekly-fertilizer-review-0-30765
 
 
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