A Near-Term Outlook for Potash Fertilizers’ Capacity Additions
Most of the world’s potash reserves are concentrated in Canada and Russia. PotashCorp (POT) in North America is one of the largest and lowest-cost producers of potash fertilizers.
For phosphorous fertilizers, 2018 will be the year in which the biggest capacity additions will occur, according to PotashCorp (POT).
In this article, we’ll discuss the outlook for the capacity additions of ammonia, the fundamental nitrogen fertilizer, in the near term.
Most major fertilizer stocks, including PotashCorp, The Mosaic Company, CF Industries, and Agrium, have underperformed both SPY and MOO year-to-date.
First Majestic Silver (AG) has a three-year correlation of ~0.71 with gold and a year-to-date correlation of ~0.64.
Franco-Nevada, Eldorado Gold, IamGold, and Harmony Gold Mining have RSI readings of 47.1, 35.1, 66.2, and 27.9, respectively.
Goldcorp (GG), Yamana Gold (AUY), and Hecla Mining (HL) have fallen 4.1%, 15.7%, and 1.1% year-to-date, respectively. However, Gold Fields (GFI) has risen 14.6% year-to-date.
On June 19, gold futures for July expiration touched the day’s low of $1,243.00 and ended at $1,245.30 per ounce.
The gold-silver spread touched a peak of 85 in late 2008. The RSI level of the gold-silver ratio is 80.8, suggesting a possible pullback in the spread.
Gold is stronger amid the pullback in the dollar and dented global sentiment. The weaker dollar supports dollar-denominated commodities like gold.
Agrium boasts one of the largest agricultural distribution networks in North America.
In September 2016, PotashCorp (POT) and Agrium (AGU) announced a merger in which the combined company would consolidate under a new name.
Of the 18 analysts surveyed by Reuters, three have given Monsanto (MON) a “strong buy,” and seven have given it a “buy” for the next 12 months.
For the upcoming 3Q17, Wall Street analysts are estimating that Monsanto will report EPS of $1.77, which would be an 18.0% fall year-over-year from $2.17.
As of June 22, 2017, Monsanto was trading at a forward PE multiple of 24.0x, which is significantly higher than its recent low of 20.8x in December 2016.
For the upcoming 3Q17, Wall Street analysts are estimating that Monsanto’s EBITDA will be $1.3 billion compared to $1.5 billion in 3Q16.
Monsanto’s (MON) gross margins over the past four fiscal years have averaged around 53.0% as a percentage of sales annually.
For the upcoming 3Q17, analysts’ consensus sales estimate for Monsanto (MON) is $4.17 billion, which will be a slight fall from $4.2 billion in 3Q16.
Monsanto (MON) is set to announce its 3Q17 earnings on June 28, 2017, before the market opens. The consensus estimate for Monsanto’s EPS is $1.77.
At 7:30 AM EST on June 22, West Texas Intermediate crude oil futures contracts for August 2017 delivery were trading at $42.78 per barrel—a gain of ~0.59%.