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HarvestedCornField with ripe standing corn in background 102219.jpg Janet Kubat Willette

Fertilizer Outlook - Ammonia holds line in bearish fertilizer market

Applications get going in a few areas after slow harvest season

Red ink is flowing in most fertilizer markets as farmers begin to think about tax-related purchases. With some nutrients selling at 10-year lows, relative bargains can be had for nutrients you’ll need in 2020.

Ammonia was the exception that proved the rule last week. While prices of other products continue to fade, wholesale costs edged higher as farmers in a few parts of the Corn Belt were able to start putting down anhydrous. Terminal prices edged higher following a $5 boost in settlements for November that took the Gulf price to $236. That followed a $27 increase for October, based on ideas farmers will plant more corn in 2020 – a notion USDA’s first baseline forecast supported by forecasting 94.5 million acres. While that wasn’t far off the 94.1 million our first survey of planting intentions found, we talked to farmers in late July and early August, when the ration of new crop soybean to corn futures favored corn. That benchmark has since turned in favor of beans. Our average retail cost for ammonia was unchanged last week at $472, only $15 off the forecast based on wholesale prices, though offers vary widely, running anywhere from $415 or less on the southern Plains to $555 or more in parts of the Corn Belt. Still, with prices for competing nitrogen products plummeting, higher ammonia costs would appear likely only if problems emerge in the supply chain once again.

Urea costs at the Gulf slipped again last week, hitting their lowest level since May 2018 as demand in the U.S. and globally remains soft. The U.S. Gulf value of $216.50 is cheap enough it could lure some international buyers if any were interested. Mostly they’re not but growers who will need stocks in 2020 should be asking dealers what they can lock in for spring. Swaps into March show only a $10 increase from current values, which could translate into good value. Wholesale costs suggest average retail values around $330, $55 below the current average. Most dealers don’t appear to be updating prices, but those who are keep lowering offers.

UAN isn’t in big demand right now, but wholesale costs remain near the lowest level in a year. Recent updates to offer sheets show prices around $215 to $220, not far from good value in today’s market. Swaps show mostly steady prices into March, the moving $10 or so higher into summer, but demand could depend on corn prices and spring weather – which are both unpredictable.

Phosphates are still looking for bottom even though DAP traded to 10-year lows last week, with the Gulf price dropping $10.50 to $256.50. Lower costs for the nitrogen component of compounds and supplies leftover from a poor application season could make phosphate products a good deal for tax purposes, though it may require on-farm storage. Costs at $400, maybe less, appear possible.

Potash values fell to one-year lows on another slow fall application season. With the Gulf at $239 and Corn Belt terminals around $277, offers should continue to fall.

For more information about national and international fertilizer markets, go to Fertecon.com.

Download the complete PDF with the link below to seek forecasts and charts for major products.

 

 

 

 

More from Farm Futures:
Corn Outlook
Soybean Outlook
Wheat Outlook

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.

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