dap rockets up over 10%

"Phosphate prices soared in Iowa this week, with USDA reporting the average price at $754, up
$94 in a range of $740 to $768. The big jump could reflect potential for U.S. supplies to be lower
than expected due to problems Mosaic is having expanding a Florida mine. "

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Iowa DAP Prices Soar
Weekly Fertilizer Review for July 20, 2011
Our forecasting model has warned of very strong phosphate prices for months now, and the
retail sector finally appears to agree. USDA reported DAP price up almost $95 a ton in Iowa this
week, one of a series of price increases roiling the sector as the grain market rallied.
Urea prices are only slightly higher on international and wholesale spot markets this week, but
retail costs and forward contracts for fall are up sharply. The return of big importer India to the
world stage appears to have firmed the tone, which could mean an early end to the typical
summer correction, which failed to cool off costs much. Prices at the Gulf were steady this week
at $467.50.
USDA reported the average price in Iowa this week for DAP up $15 a ton to $586, in a range
from $530 to $655. The top end of that range is in line with our current forecasting model of
$645, suggesting more increases could be in the offing. Forward contracts out of the Black Sea
shot higher, suggesting fall prices could another $25 higher than that.
Ammonia prices remain firm, both on wholesale and retail markets. Prices out of the Black Sea
rose around $1.50 a ton, with costs at the Gulf likely to be up another $9 in August to $517. That
would bring our fair value price up to $780, but retail costs are already higher than that in the
Midwest, with potential for a squeeze to add $100 to the bill.
USDA reported the average price in Iowa this week at $793, up $8 in a range from $762 to
$817.
Phosphate prices soared in Iowa this week, with USDA reporting the average price at $754, up
$94 in a range of $740 to $768. The big jump could reflect potential for U.S. supplies to be lower
than expected due to problems Mosaic is having expanding a Florida mine. A judge continued a
restraining order against the expansion, which the company initially said would increase its
costs by $200 million, because it would be forced to buy supplies from competitors. However,
the firm cut that estimate in half earlier this week.
Wholesale DAP prices are likely to jump $25 or more in August according to forward contract
offers, from their current Gulf level of $597.50. That would take our fair value estimate to $717,
but our model continues to warn that a squeeze could send prices to $870 or beyond. Industry
data shows supplies at the end of June falling well below average levels for this time of year.
Potash prices in Iowa jumped $31 this week to an average of $668.75, in a range from $650 to
$695 according to USDA?s latest survey. Though Midwest terminal prices are steady round
$560, export prices out of Canada jumped as inventories in North America dropped in June.
While the Iowa price is in line with our farmgate projection of $662, our models also warns of
potential for prices to be more than $100 higher if sellers squeeze the market on a corn market
rally.