Market Vectors® Agribusiness ETF

Phosphate fertilizer prices are key to Mosaic’s (MOS) Phosphate segment’s sales, earnings, and stock price.

For the week ending October 28, the overall movement in urea prices was flat to positive. Granular urea prices rose 6.6% to $211 per metric ton in China.

Last week, potash prices continued to show weakness week-over-week. Prices were broadly flat to positive for the week ending April 21.

Of the 22 analysts surveyed, about 32% of them gave Mosaic (MOS) a “buy” rating. About 41% of analysts issued a “hold” rating, and only 27% issued a “sell” rating.

The significance of potash price Wholesale potash price is one of two factors (the other being sales volume) that influence potash producers’ revenues. When prices rise, so does revenue, which will translate to higher profitability (margins), earnings, and share prices. However, when prices fall, they will have a negative impact on fundamentals and share prices. […]

After a year of declining sales and increasing costs, management seems much more optimistic regarding potash as well as Langbeinite.

In the last 12 months, PotashCorp (POT) has earned about 36% of its total sales from its Potash segment.

As crops widely trade in the international market, they often converge with each other if transportation costs aren’t so high.

Generally, a capacity increase tends to lag demand growth, as producers like to see a stronger market before making significant investments.

Average DAP prices in China were flat at 2,669 Chinese yuan per metric ton last week. DAP prices in Morocco remained unchanged at $340 per metric ton.

Like Monsanto (MON), FMC Corporation (FMC) is in the business of crop protection products. The majority of FMC’s sales come from its Agricultural Solutions segment.

Potash fertilizers Most of the fertilizer companies we’ve discussed in this series sell all or some of the three NPK (nitrogen, phosphorous, and potassium) macronutrients. To learn more about these macronutrients’ key role in agriculture, read Agricultural Fertilizer Industry: Your Comprehensive Overview. In this part, we’ll look at what 2017 meant for potash producers. Price trends […]

On September 12, 2016, PotashCorp and Agrium announced their intention to combine in a merger of equals. But China and India have set conditions.

As of December 25, 2017, Monsanto stock was covered by 18 analysts according to Reuters. The current consensus rating on the stock stood at 2.56.

China is the largest consumer of nitrogen fertilizers, but it produces most of it within its borders. Urea is Chinese farmers’ top choice.

Mosaic (MOS) continued to enjoy higher margins at 7%—compared to Agrium’s (AGU) margins at 5%. Mosaic’s margins were flat year-over-year.

CVR Partners missed both top-line and bottom-line estimates for the second quarter, and the stock fell 4.5% after the earnings release.

Recently, the Fertilizer Affordability Index has seen an upward trend.

Fertilizer affordability has seen some tightening in the last couple of months.

Without an understanding of factors that affect crop prices, it would be difficult to formulate a view on future crop prices and demand for nitrogenous fertilizers.

MAP (monoammonium phosphate) prices hit a low of $343 per metric ton in August but have been on an upward momentum since then.

Last week, the MAP prices in Brazil rose as much as 5.6% week-over-week to $394 per metric ton from $373 per metric ton a week ago.

There’s a handful of big players in the agricultural fertilizer industry. Setting up business requires huge capital, which makes for a high barrier to entry.

At the end of 2017, after receiving final regulatory approval for the merger, PotashCorp and Agrium combined into a new company called Nutrien (NTR).

Potash prices over the past few years have been considerably lower than what we saw during their peaks of ~$482 in 2011 and ~$870 in 2009.

A few days ago, Monsanto (MON) agreed to Bayer’s takeover offer of $128 per share for a total deal value of $66 billion.

On August 13, the crop index stood at 89.9. It rose by 1% following the USDA’s latest stock-to-use ratio, which was published on August 12.

Mosaic (MOS), which has historically traded at a high valuation multiple of 9.2x, is currently trading at an enterprise value to next 12-month EBITDA ratio of 5.7x.

The Fertilizer Affordability Index kept trending lower last week, continuing its two-week streak.

In the Oilseeds segment, Bunge’s focus has been to enhance its footprint in the major growth regions.

Potash stocks struggled for most of 2016. In 1H16, potash demand was negatively affected due to delays in potash contract settlements in China and India.

On average, granular urea prices were flat to positive week-over-week. In NOLA (New Orleans), granular urea prices rose as much as 3.5% week-over-week.

Bayer recently filed for an extension with European Union regulators, which pushed back the merger with Monsanto to early 2018.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

Canada, Russia, and Belarus together account for more than 89% of the world’s estimated reserves and a little over 66% of global capacity.

Why oil affects fertilizer price In a competitive industry like nitrogenous fertilizer, the marginal producer’s cost sets the floor for the industry. These producers are the most expensive manufacturers to supply the product at that point in time. When the marginal producer’s cost rises, so does the industry’s. On the the other hand, falling costs […]

The importance of costs Understanding how fertilizers are produced is an important part of investing. What companies buy and what they pay for will be their costs. When costs are rising, they can have a negative impact on earnings and cash flow if the industry can’t pass them on to buyers. Conversely, when costs are falling, […]

In a competitive industry like the nitrogenous fertilizer industry, the marginal producer’s cost sets the industry floor.

How China affects the global fertilizer market China, the world’s largest producer of nitrogen (a chemical used to make nitrogenous fertilizers for growing plants) occupies roughly 40% of global production capacity. Although much of its output is sold to domestic farmers—as an export tax of as much as 75% during the on-season restricts domestic firms […]

According to the EIA (U.S Energy Information Administration), natural gas prices were broadly mixed from November 29 to December 6, 2017.

In Brazil, potash prices were flat at $281 per metric ton in the week ending January 12.

This series covers key trends that are currently affecting coal and natural gas prices and, consequently, nitrogen fertilizer producers as well.

The United States is one of the largest producers of agricultural products in the world, but it’s not a key producer of nitrogen fertilizers.

Nitrogen is an important nutrient for crop development and growth. It’s also the most important input that allows farmers to feed billions of people in the world.

Mosaic is expected to report EPS of $0.28 in 1Q18, which would be a significant rise from its EPS of $0.04 in 1Q17.

Urea prices for the standard grade in the NOLA (New Orleans) region of the US and in Egypt saw the steepest weekly change last week.

Potash prices remained strong in the week ending January 19.

DAP (diammonium phosphate) prices have been moving higher from levels observed in late 2016 and early 2017.

In the previous part of this series, we saw that the alcohol industry could expect marijuana legalization for recreational purposes as an extension to their growth strategy.

Nitrogen fertilizer prices remained volatile on the back of the volatility in the input prices of natural gas.