by Russ Quinn, DTN Staff Reporter
OMAHA (DTN) — For the first time in 11 weeks, fertilizer prices did not move significantly, according to retail fertilizer prices tracked by DTN for the third week of May 2012. The lull in prices is related to the spring fertilizer application season wrapping up in most locations, retailers report.
Five of the eight major fertilizers were higher compared to a month earlier, but none were of any consequence. DAP had an average price of $639/ton, potash $665/ton, urea $761/ton, UAN28 $432/ton and UAN32 $491/ton.
Two fertilizers had lower retail prices compared to mid-April, but like the slightly higher prices, these price moves lower were fairly minor. 10-34-0 had an average price of $782/ton and anhydrous $760/ton.
On a price per pound of nitrogen basis, the average urea price was at $0.83/lb.N, anhydrous $0.46/lb.N, UAN28 $0.77/lb.N and UAN32 $0.77/lb.N.
With most spring application done, retailers believe price corrections to the lower side could be in the works in the coming weeks.
Brent Hall, agronomy manager for South Central Co-op located in Chariton, Iowa, said while there are some side-dressing operations still to be completed in his south-central Iowa region, the majority of fertilizer has already been applied to the 2012 corn crop. With demand on the decline, he believes that prices will now begin to work lower.
“I think fertilizer prices will begin to settle lower going forward now,” Hall told DTN. “We could see urea drop maybe a couple hundred dollars a ton and the (liquid) solutions maybe a hundred dollars a ton as well.”
A northeastern Nebraska retailer agrees with Hall’s assessment of the fertilizer prices. He, too, believes a price correction to the lower side is set to come in the next few weeks.
“With the run-up we saw this spring with urea and the liquid solution, it is only natural to think a correction (to the lower side) is coming sooner than later,” the retailer said. “I really think this is what we will see in the coming months.”
How much some fertilizer prices drop ultimately depends on what price level the corn market is at this summer, Hall said. It is only logical to believe higher corn prices will keep fertilizer fairly high while significantly lower corn prices will force fertilizer prices to drop, he said.
Half of the eight major fertilizers are still showing double-digit increases in price compared to one year earlier. Leading the way higher is urea. The nitrogen fertilizer is 54{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} higher compared to last year while both UAN28 and UAN32 have jumped 15{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} and potash is now 11{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} more expensive compared to the third week of May 2011.
One fertilizer has seen just slight price increases compared to a year earlier. Anhydrous is now 2{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} more expensive.
The three remaining fertilizers are now actually lower compared to one year ago. DAP is now 6{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} lower, 10-34-0 is 5{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} less expensive and MAP has decreased 2{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} in price.
DTN collects roughly 1,300 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.
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Posted with DTN Permission by Haylie Shipp
