If natural gas stays low and the Companies cant suck the Dealers into over priced product it looks like Fall of 09 will be time to go back to banding fertilizer.
Latest report.
Falling worldwide demand continued to pressure fertilizer prices this week, as farmers have all but finished buying decisions with the start of a rushed planting season. Summer forward prices suggested the market is hardly done dropping, either.
Ammonia made domestically in the Southwest is being sold for around $290 a ton, the same prices quoted out of the Gulf. That translates into a farmgate price of around $445 to $500 a ton, according to Farm Futures pricing models for producers able to secure fresh supplies.
While wholesale prices for anhydrous were steady in the latest week at seaports, forward prices posted for July indicate the market is ready to repeat its typical seasonal break into summer on the spot market. Quotes for July out of the Gulf are at least $100 under the current market, bid at $163.25 and offered at $209. That translates into a farmgate around $385 to $425.
Prices should actually be lower, at least according to the cost of producing the product. Prices on natural gas, the primary feedstock for nitrogen fertilizers, fell to new 6 ½-year lows this week, as supplies continue to build faster than expectations. With the spot month closing below $3.40 Thursday, farm gate fertilizer should be around $320 a ton, based on the cost of the gas used.
DAP prices also continued to grind lower, falling $20 a ton at the Gulf to $277.50. Central Florida prices are $30 higher, but also down, indicating a farm gate price for new deliveries around $455 a ton. July prices for DAP also fell this week, with the farm price indicated around $380.
Urea prices bucked the sharply lower trend, trading mixed this week. Prices at the Gulf were around $5 a ton lower at $266.a ton, though quotes increased a little out of the Black Sea. Forward prices for July fell to $230 of the Black Sea, indicating a farm gate price of around $370 a ton in the U.S.
Latest report.
Falling worldwide demand continued to pressure fertilizer prices this week, as farmers have all but finished buying decisions with the start of a rushed planting season. Summer forward prices suggested the market is hardly done dropping, either.
Ammonia made domestically in the Southwest is being sold for around $290 a ton, the same prices quoted out of the Gulf. That translates into a farmgate price of around $445 to $500 a ton, according to Farm Futures pricing models for producers able to secure fresh supplies.
While wholesale prices for anhydrous were steady in the latest week at seaports, forward prices posted for July indicate the market is ready to repeat its typical seasonal break into summer on the spot market. Quotes for July out of the Gulf are at least $100 under the current market, bid at $163.25 and offered at $209. That translates into a farmgate around $385 to $425.
Prices should actually be lower, at least according to the cost of producing the product. Prices on natural gas, the primary feedstock for nitrogen fertilizers, fell to new 6 ½-year lows this week, as supplies continue to build faster than expectations. With the spot month closing below $3.40 Thursday, farm gate fertilizer should be around $320 a ton, based on the cost of the gas used.
DAP prices also continued to grind lower, falling $20 a ton at the Gulf to $277.50. Central Florida prices are $30 higher, but also down, indicating a farm gate price for new deliveries around $455 a ton. July prices for DAP also fell this week, with the farm price indicated around $380.
Urea prices bucked the sharply lower trend, trading mixed this week. Prices at the Gulf were around $5 a ton lower at $266.a ton, though quotes increased a little out of the Black Sea. Forward prices for July fell to $230 of the Black Sea, indicating a farm gate price of around $370 a ton in the U.S.