Higher crop prices can bring higher fertilizer costs as extra acres come into production and farmers are willing to add nutrients to raise yields. But the two-week rally in the grain market didn’t appear to stimulate fertilizer prices yet as demand globally remains sluggish. U.S. retail costs appeared flat last week as wholesale values weakened.

Ammonia applications were lower last fall due to low prices and weather, and the slow start to fieldwork this spring kept demand tepid. Wholesale ammonia costs began to eased last week even though retail markets have yet to start adjusting lower now that the buying season is ending. Growers should monitor deals closely for 2019 product needs, both for summer offers and clearance sales now if dealers need to unload unsold inventory. While our most recent retail average price was $493, the international market has pulled back $75 to $100 from when much of that supply was booked. Some pricing models suggest average retail costs could pull back to around $365, others are more like $420. But significant savings should begin to appear unless the corn market can sustain a bullish tone. Ammonia imports picked up seasonally as exports just about stopped in March, but overall supplies brought in were down due to rising domestic production.

Urea also pulled back on international markets last week. Demand appeared to stall out in major growing regions while buyers needing supply were ready to let the market come to them. The price at the Gulf dipped $5 to $219, indicative of the slow drip lower that’s affected prices over the last two months. Retail markets were flat at $352, reflecting the tone at terminals markets in the Corn Belt but should begin to crack by the end of the month, if not sooner. Swaps for the Gulf suggest retail values could dip to the $325 by July, before fall buying kicks in. Urea imports were also higher in March, but well below levels for the month in recent years.

UAN followed the same trajectory as the rest of the nitrogen complex last week, though it’s just beginning to start what likely is a move lower into fall. While the retail cost of 28% was unchanged at $235 as side dressing and spot application demand is still apparent, wholesale values eroded again this week. The price for 32% at the Gulf dipped $3.50 to $172.50, and some terminals also eased. Swaps show steadily falling values at the Gulf into October, which could take the fall retail price for 28% to $213; that’s up $10 to $15 from earlier this spring, suggesting higher prices of corn and wheat are starting to have an impact on fall expectations.

Phosphates could be the outlier in the fertilizer market this spring. Both domestic and international demand stayed firm with pipeline supplies in the U.S. reported to be tight for growers looking for product. While average DAP costs at the Gulf were down $6 to $382.50, there was trade at levels higher than that, and international values crept higher. Our average retail value for DAP is $487, $13 higher than replacement cost. Swaps suggest a modest reduction into summer, taking DAP to around $458.