Why do I say that because it seems on fert price the Americans farmers who waited are going to get some deals this spring on fert yet up here it seems prices just stay the same level. Anhydrous is actually 5 cents a lb higher than last spring.
With the final countdown to spring planting underway, fertilizer prices continue to move mostly lower at both the farm gate and wholesale level, underscoring farmers’ plans to reduce acreage for 2009.
USDA put planting intentions for major crops down by more than 7 million acres this spring, because producers cut back due to low grain prices and high input costs. Fewer acres means less fertilizer demand.
Prices at the farm gate level continue to work lower, as farmers balk at costs that remain well above the wholesale level in many areas. Local suppliers who stocked up on inventory when prices peaked last fall resisted marking that product down, instead averaging their charges lower with new supplies bought at cheaper prices.
Perhaps the biggest change in the market recently is for potash. With the market dominated by only a handle of companies, potash prices stayed near record highs over the winter despite burgeoning supplies. Now, that situation finally appears to be cracking, at least at the wholesale level. Truckloads at terminals in the western Corn Belt are reportedly being done around $680 to $700, with the export market around $200 off its highs.
The latest USDA survey of prices paid by farmers in Illinois was down $22, but still high at $815, in a fairly tight range of $775 to $850.
The potash industry itself is in the news, with speculation swirling about the possible purchase of Potash Corp. or another major player by Brilliton BHP. Those rumors come on the heels of a series of that are still kicking about, including the takeover of Terra Industries by CF Industries and Agrium’s bid for CF.
Illinois farm gate prices for other fertilizers were down this week, with wholesale prices at the Gulf slightly lower as well. Anhydrous ammonia was down more than $50, according to USDA, with the average at $657 in a range form $600 to $840. Prices at the Gulf were off a little at $288.50Based on Farm Futures historical pricing module, that suggests a fair value farm gate price at $460 to $500.
Producers trying to figure needs for fall or spring 2010 application may be able to find loads cheaper this summer. June forward ammonia at the Gulf eased a little this week, at $250 bid and $275 offered.
Prices for natural gas, the feedstock for nitrogen based fertilizers, suggest prices should be even lower. Futures on gas made new lows this week on due to weak industrial demand, but appear to be trying to forge a long-term bottom. That has some producers wondering if they can hedge fertilizer needs in the natural gas market. This type of hedge used to work fairly well, but became less effective when high domestic gas prices lead U.S. companies to import most of their nitrogen. Long-term, U.S. gas prices follow the international market, but can stay disconnected from fertilizer prices for quite some time. The other problem with the hedge is the size of gas futures: the 10,000 million btu contracts cover the gas needed to produce 265 tons of ammonia, or enough to cover 3,300 acres at 160 lb/ac. Margins can be steep and margin calls even steeper.The final problem is where to hedge. Deferred for winter 2009-2010 are $2 above the spot price, because the market is trying to encourage gas companies to inject production into storage for heating needs.
Meanwhile, DAP at the Gulf was down $3 a ton to $3.08.25, with the Illinois price at $537, down $10 in a range of $448 to $720. Gulf urea was down $2.25 to $286.50, with the Illinois price at $439, down $38 in a range of $393 to $500.
SOURCE: YARA,
So potash is down some 200 ton.
I think the reason were not seeing bigger drop is the companies feel Canadian farmers will pay what ever we ask so why discount the product.
With the final countdown to spring planting underway, fertilizer prices continue to move mostly lower at both the farm gate and wholesale level, underscoring farmers’ plans to reduce acreage for 2009.
USDA put planting intentions for major crops down by more than 7 million acres this spring, because producers cut back due to low grain prices and high input costs. Fewer acres means less fertilizer demand.
Prices at the farm gate level continue to work lower, as farmers balk at costs that remain well above the wholesale level in many areas. Local suppliers who stocked up on inventory when prices peaked last fall resisted marking that product down, instead averaging their charges lower with new supplies bought at cheaper prices.
Perhaps the biggest change in the market recently is for potash. With the market dominated by only a handle of companies, potash prices stayed near record highs over the winter despite burgeoning supplies. Now, that situation finally appears to be cracking, at least at the wholesale level. Truckloads at terminals in the western Corn Belt are reportedly being done around $680 to $700, with the export market around $200 off its highs.
The latest USDA survey of prices paid by farmers in Illinois was down $22, but still high at $815, in a fairly tight range of $775 to $850.
The potash industry itself is in the news, with speculation swirling about the possible purchase of Potash Corp. or another major player by Brilliton BHP. Those rumors come on the heels of a series of that are still kicking about, including the takeover of Terra Industries by CF Industries and Agrium’s bid for CF.
Illinois farm gate prices for other fertilizers were down this week, with wholesale prices at the Gulf slightly lower as well. Anhydrous ammonia was down more than $50, according to USDA, with the average at $657 in a range form $600 to $840. Prices at the Gulf were off a little at $288.50Based on Farm Futures historical pricing module, that suggests a fair value farm gate price at $460 to $500.
Producers trying to figure needs for fall or spring 2010 application may be able to find loads cheaper this summer. June forward ammonia at the Gulf eased a little this week, at $250 bid and $275 offered.
Prices for natural gas, the feedstock for nitrogen based fertilizers, suggest prices should be even lower. Futures on gas made new lows this week on due to weak industrial demand, but appear to be trying to forge a long-term bottom. That has some producers wondering if they can hedge fertilizer needs in the natural gas market. This type of hedge used to work fairly well, but became less effective when high domestic gas prices lead U.S. companies to import most of their nitrogen. Long-term, U.S. gas prices follow the international market, but can stay disconnected from fertilizer prices for quite some time. The other problem with the hedge is the size of gas futures: the 10,000 million btu contracts cover the gas needed to produce 265 tons of ammonia, or enough to cover 3,300 acres at 160 lb/ac. Margins can be steep and margin calls even steeper.The final problem is where to hedge. Deferred for winter 2009-2010 are $2 above the spot price, because the market is trying to encourage gas companies to inject production into storage for heating needs.
Meanwhile, DAP at the Gulf was down $3 a ton to $3.08.25, with the Illinois price at $537, down $10 in a range of $448 to $720. Gulf urea was down $2.25 to $286.50, with the Illinois price at $439, down $38 in a range of $393 to $500.
SOURCE: YARA,
So potash is down some 200 ton.
I think the reason were not seeing bigger drop is the companies feel Canadian farmers will pay what ever we ask so why discount the product.
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