We expect retail fertilizer prices will continue to have risk to the upside until the summer. There will be better opportunities to purchase for fall application once we see price resets in July and beyond. If you have questions or want to discuss your fertilizer situation with us, give us a call at 800-622-7628. |
All recommendations below are specific to cash market fertilizer purchases
and are in no way recommendations to take or exit a futures position. |
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Buy Signals -
Urea: Retail urea prices have reached the highest level in almost two years but there is still likely more upside ahead over the next month. Do not purchase any fall needs yet, there will be a better opportunity to buy closer to the fall.
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UAN: UAN retail prices are moving even a bit higher than urea on a percentage basis and the risk is still to the upside as demand continues through June. Hold off on any fall purchases at this time.
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Ammonia: The peak of spring ammonia demand is past us at this point and retail ammonia prices would have likely reached a top if not for big moves in urea and UAN. Our price average still could see $800/ton in the coming weeks, but otherwise we should be at the high water mark for the season. Do not purchase any fall needs yet, there should be better opportunities in a few months.
- DAP/MAP: Phosphate prices have moved higher over the last month in sympathy with other fertilizer products but remain elevated relative to grain prices and long-term trends. We expect prices to move lower in the long run. We recommend holding off on any fall purchases at this time.
- Potash: Our retail price average for potash has moved only slightly higher despite a great deal of tariff news in recent weeks.
This could change at any time, but for now it appears that potash will be exempted from any Canadian tariffs, a relief for the farmer for sure. The geopolitical situation is still tenuous so if you are able to book tons for the fall, go ahead and get up to 25% coverage at this time.
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Urea: -
Retail urea prices in the Midwest have jumped higher over the last month as we move into the side-dress window. Our retail price average increased $30/ton to $573/ton since the last update. We should get another month or so of higher retail prices before things turn around in the summertime.
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The urea spot price in NOLA ended the month of April up $45/ton to $425/ton. CME urea futures expect further upside this month before resetting in a typical summertime fashion. Prices for fall and winter are $365/ton or less.
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India conducted a urea purchase tender in the beginning of April which again fell short of securing what they needed. Expectations were for a 1.5 million ton purchase and it appears they were able to acquire less than 900,000 tons. This has been the pattern for the last few tenders and adds an ongoing bullish story to the market.
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Counteracting the India news is very recent news that China is considering adjusting their export restrictions which have been in place since Covid. This is a rumor that seems to make the rounds about once a year and nothing comes of it, but if implemented it could add a significant amount of extra supply to the world market.
Outlook: Retail prices in the Midwest should continue to move higher from here over the next few weeks but we anticipate a possible pull back of around $100/ton during the summer and early fall. We will cover fall needs at that time.
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UAN:
Retail UAN prices in the Midwest are beating out the move seen in urea with a $58/ton increase since the last update to $458/ton on a 32% basis. On a 28% basis, UAN prices average $399/ton in the Midwest. A combination of additional corn acres and the rush to find extra tons for side-dress seem to be the drivers of the move.
UAN futures in the Gulf were around $335/ton at the end of March. Chicago UAN futures still show about $20/ton upside through May and June. After that, Gulf prices should move back below $300/ton although there are no futures trading out that far yet.
Outlook: As is the case with urea, UAN retail prices should continue to move higher through side-dress applications. The supply situation in the U.S. continues to be tight and strong demand from extra corn acres should continue through June. The next opportunity for a price pullback likely won’t come before July. Hold off on any fall purchases.
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Ammonia:
Spot ammonia retail prices in the Midwest increased $15/ton to $791/ton on average since the last update. We are likely close to a high point in ammonia prices with the bulk of demand already past in the form of spring pre-plant applications. It is possible we could get our average over $800/ton in the next week or two, but ammonia prices typically peak out prior to urea or liquid N and at this point it seems it is really being dragged higher by the large urea and UAN price increases.
In what continues to be a monthly surprise, the May Tampa ammonia contract price between Yara and Mosaic again declined $20/mt to $415/mt. This is now the fifth monthly decline in a row, and it is certainly counter-seasonal to put a high in December. At this point we may see an increase for the month of June, but the stage is set to take out the low of $400/mt from last summer during this coming summer.
Outlook: At this point we are only seeing ammonia prices strengthen at the retail level with wholesale prices lower and the Tampa benchmark still in the midst of a multi-month decline. Retail prices may have one last gasp higher this because of rising urea and UAN prices but otherwise we should start seeing some relief to prices as early as the next few weeks. Hold off on fall purchases at this time as you will get a better deal down the line.
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Phosphates: Prompt DAP barges have increased about $10/ton to the $625/ton area over the last month, remaining stubbornly high.
Our retail price average in the Midwest increased $12/ton to $790/ton since the last update. Retail prices remain at an elevated level, not just compared to other fertilizer products but also to the price of new crop corn. That isn’t necessarily a reason for it to go down immediately, and so far it certainly hasn’t, but over time this will normalize. Hopefully for farmers as soon as the summertime reset. If not, there will likely be a decent amount of demand destruction this fall unless grain prices rise from here.
DAP futures in Chicago expect a continued increase in Gulf prices this month, and for the first time do not appear to price any decline in the back month futures.
Outlook: We continue to expect retail DAP and MAP prices to fall over the long term. If you still have spring phosphate needs, go ahead and purchase them in the spot market. We are holding off on fall purchases until we can get a meaningful pullback in retail prices.
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Potash:
Outlook: It would seem we are clear for now in terms of price risk to the upside, but this could change at any time. Barring a shift in tariff news we should see a price reset this summer, although it will likely be fairly small. Given the relative value in current potash prices versus other fertilizer products, if you have the ability to purchase for the fall we recommend getting up to 25% coverage at this time.
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ABOUT US
Roach Ag. Marketing is a full service advisory firm founded in Perry, Iowa back in 1978 to help farmers do a better job of marketing their crops and livestock. Learn more...
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Roach Ag Marketing
568 E Yamato Rd
Ste 200
Boca Raton, FL 33431
Telephone: 800.622.7628
FAX: 561-994-9240
E-mail: dailygrainplan@roachag.com |
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