Southern States Lead N Higher

Anhydrous ammonia

  • Anhydrous is $47.64 below year-ago pricing -- higher $5.56/st this week at $515.16.
  • Urea is $1.17 below the same time last year -- higher $1.46/st this week to $363.38.
  • UAN28% is $24.77 below year-ago -- higher $1.99/st this week to $248.58.
  • UAN32% is priced $21.95 below last year -- higher $2.15/st this week at $281.07.

Anhydrous ammonia once again led us higher this week. Missouri firmed $44.65 to lead gains in NH3 followed by Nebraska which firmed $9.10 and Kansas which added $7.70. South Dakota, Ohio and Wisconsin were unchanged as Indiana was our only decliner falling 49 cents per short ton.

UANUAN32% was led higher by gains in Indiana to the tune of $19.99 as Nebraska added $5.48 and Iowa firmed $4.12. Six of our twelve states were unchanged as declines were limited to a $6.55 falloff in Michigan.

UAN28% firmed on strength in Nebraska, up $11.13 as Kansas firmed $6.98 and Minnesota added $2.61. Four states were unchanged as Illinois fell 63 cents and Michigan dropped 46 cents per short ton.

Urea posted the meekest gains in the nitrogen segment this week. Missouri firmed $10.44 to lead the way higher as Kansas and Nebraska each added about $2.30. Four states were unchanged as Michigan softened $1.08 and Illinois fell 35 cents.

ureaOur forecast remains unchanged from recent weeks. Seasonal and technical indicators clearly have nitrogen pointed higher into spring as demand enters the market. This is evidenced by anhydrous price action which has Missouri, Kansas and Nebraska all firming with Missouri up the most aggressively. In a typical year, Kansas generally posts our lowest anhydrous bid. This week, Kansas is just a few bucks below our Iowa bid suggesting Iowa and other states farther north will see increases, some by as much as $50 per short ton. The time to take advantage of the discount nitrogen holds to expected new-crop corn revenue is running out quickly so do not delay and book nitrogen for spring/summer 2017 if you have not already.

December 2017 corn closed at $3.86 on Friday, March 10. That places expected new-crop revenue (eNCR) per acre based on Dec '17 futures at $611.53 with the eNCR17/NH3 spread at -96.37 with anhydrous ammonia priced at a discount to expected new-crop revenue. The spread narrowed 33.57 points on the week.

Nitrogen pricing by pound of N 3/8/17

Anhydrous $N/lb

Urea $N/lb
UAN28 $N/lb
UAN32 $N/lb
Midwest Average
$0.31 1/2
$0.40 1/2
$0.44 1/2
$0.44 1/4
Year-ago
$0.34 1/4
$0.40 1/2
$0.48 1/2
$0.47 1/4

The Margins -- UAN32% is at a 2 3/4 cent premium to NH3. Urea is 4 cents above anhydrous ammonia; UAN28% solution is priced 1 cent above NH3.

Nitrogen
Expected Margin
Current Price by the Pound of N
Actual Margin This Week
Outstanding Spread
Anhydrous Ammonia (NH3)
0
31 1/2 cents
0
0
Urea
NH3 +5 cents
40 1/2 cents
+9 cents
+4 cents
UAN28%
NH3 +12 cents
44 1/2 cents
+13 cents
+1 cent
UAN32%
NH3 +10 cents
44 1/4 cents
+12 3/4 cents
+2 3/4 cents

 

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