Agrium Inc

MAP (monoammonium phosphate) prices have shown strength in recent weeks, moving higher to peak at $ $403 per metric ton in Brazil.

For the week of December 6–13, 2017, natural gas spot prices at Henry Hub were broadly lower, according to the EIA.

Mosaic (MOS) has had a disappointing year so far compared to PotashCorp (POT) and Agrium (AGU). MOS stock significantly underperformed the S&P 500.

Perhaps dividend yield is one of the most common starting points when screening for dividend stocks.

Among the companies that operate within the agriculture sector, FMC (FMC) has outperformed its peers with a total one-year return of 53.2% as of December 11, 2017.

Last week, which ended December 8, 2017, saw a slight rise in the Fertilizer Affordability Index issued by Mosaic (MOS).

Last week, which ended December 8, 2017, overall potash prices were broadly flat to positive at the four locations we’re covering in this series.

Last week, which ended December 8, 2017, was broadly mixed for movements in DAP (diammonium phosphate) prices. Some regions saw weekly gains, and others moved sideways to negative.

Potash prices Potash prices remained firm for the week ending December 1. In most of the regions discussed below, the weekly prices of potash fertilizers were flat to positive. Weekly movements Last week, the granular potash prices in the Cornbelt region of the US (MOO) rose ~1.2% week-over-week to $234 per metric ton from $231 […]

Henry Hub (MOO) natural gas prices saw a negative week-over-week trend, a continuation of the trend from the previous week.

Last week, the granular MOP (muriate of potash) prices in NOLA (New Orleans) in the US (NANR) rose by as much as 45 basis points week-over-week to $203 per metric ton.

The prices for DAP (diammonium phosphate) in most of the regions of the world saw positive momentum last week.

Last week, the average weekly natural gas prices were broadly lower week-over-week at the Henry Hub in the US (MOO).

PotashCorp owns 28% of Arab Potash and can appoint three of the latter’s 12 board members. It can also reportedly appoint senior management positions.

The potash prices in the Cornbelt region were flat at $231 per metric ton. It was the sixth consecutive week that potash prices were mostly unchanged.

Last week was broadly flat for potash prices in the three locations discussed below.

Last week, surprisingly, the prices for DAP (diammonium phosphate) saw positive momentum week-over-week.

In 3Q17, Mosaic (MOS) reported sales growth of ~2% YoY (year-over-year) to $2 billion, which grew from $1.95 billion in 3Q16.

Last week, the Fertilizer Affordability Index rose again week-over-week from 0.69x to 0.70x.

Last week continued to be a positive week for urea prices. Prices have risen lately as a result of excess capacities cooling off.

As on October 25, the consensus analyst rating for Mosaic stood at 3.0, which suggests an overall “hold” recommendation for the stock.

The natural gas prices at Henry Hub in the US fell 4.1% week-over-week from a weekly average of $2.96 per MMBtu to a weekly average of $2.84 per MMBtu.

India is another major market for NPK (nitrogen, phosphate, and potash) fertilizers. The country is partly self-sufficient in nitrogen fertilizers.

Among the three NPK (nitrogen, phosphate, and potash) fertilizers, phosphate fertilizers have had the worst recovery.

So far this year, Henry Hub natural gas prices have hovered around $3 per MMBtu (million British thermal units).

In recent months, MAP prices in Brazil have been on a downward trajectory. However, MAP prices appear to have found firmness in recent weeks.

The market environment for potash has seen a better recovery than nitrogen and phosphate fertilizers have seen.

Given the growth in potash shipments and the increase in price realization, it’s natural that the margins of potash producers improved YoY in 2Q17.

PotashCorp’s (POT) phosphate segment contributed almost a fourth of overall sales for 2Q17. Sales were driven by shipments and price realizations.

PotashCorp (POT) had lackluster earnings growth last year. However, the company reported EPS (earnings per share) growth in 1Q17.

Mosaic (MOS) remains a painful investment for investors. The company has delivered losses of 18.7% year-to-date as of July 13.

For 2016, India’s imports of nitrogen fertilizers, which only included numbers for urea, fell 27.0% to 4.9 million metric tons.

Intrepid Potash’s (IPI) gross margin for its Potash segment swung to positive territory in 1Q17, while its Trio margins were in the negative territory.

PotashCorp’s average realized prices for phosphate fell ~15% to $423 per ton in 1Q17, as compared to $499 per ton in 1Q16.

In recent years, agricultural fertilizer companies like PotashCorp (POT), Agrium (AGU), Israel Chemicals (ICL), and CF Industries (CF) have incurred higher capital expenditures.

Urea prices have fallen by an average of 14% annually over the past five years. The consistent fall has been due to falling energy costs, leading to lower production costs across the board.

According to PotashCorp, the outlook for potash appears positive in 2017. North America, Latin America (especially Brazil), India, and China have been running low on inventory.

Wall Street analysts estimate that Mosaic (MOS) could report gross income of $209 million, which represents a 41% year-over-year fall from $355 million in 4Q15.

Overall shipments for PotashCorp’s Phosphate segment fell 6.0% in 4Q16 to 0.72 million tons, from $0.76 million tons in 4Q15.

In 4Q16, the overall average nitrogen selling price fell 37.0% to $182 per ton, from $288 per ton in 4Q15.

PotashCorp (POT), which is currently trading at an EV-t0-EBITDA multiple of 15.0x, is trading far above its low point of 6.0x a year ago.

Potash salts are the key cost of production for potash, so most producers have an integrated production.

Since phosphate rock is one of the major costs of production, companies such as Mosaic (MOS) have an integrated production process.

Energy as well as freight and handling can be the two biggest costs for nitrogen fertilizer production.

There’s a constant need to bring up the fertility levels necessary to grow crops, and that need is fulfilled by fertilizers.

Increasing crop yield on available farmland could be the best solution to the problem of increasing crop production.

Potash’s selling price has been on the decline for the last few quarters and is key to the performances of potash producers (NANR).

Anthracite coal is used to produce nitrogen fertilizers. For the week ending November 18, average weekly anthracite coal prices in China rose 3.8%.

The Phosphate segment’s shipments rose 23% to ~2.5 million tons from ~2 million tons in 3Q15—compared to guidance of 2.4 million–2.7 million tons.

Producers in China primarily use coal as an input material to produce nitrogen, especially urea-based fertilizers. China is the world’s biggest urea exporter.