SPDR S&P® North American Natural Res ETF

CF Industries (CF) is expected to see a significant reduction in its capital expenditure (or capex) year-over-year (or YoY) in 2Q17 and for the next four quarters.

Mosaic (MOS) and PotashCorp (POT) were hit the hardest, with their respective shipments declining by 24% each to 1.5 million tons and 1.7 million tons year-over-year.

The average price of ammonia for the week ending March 11 stood at $310 per metric ton, remaining unchanged from the previous week.

According to the Fertilizer Affordability Index, 2017 has been one of the most affordable years for fertilizers. Mosaic issues the index.

Over the past ten-year period, CF Industries has risen 186.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.

The average weekly price of MOP (muriate of potash) in Vancouver remained unchanged for the week ended May 20, 2016.

For the week ending November 25, fertilizer affordability fell to 0.65x from 0.66x week-over-week.

On average, potash prices for these five producers fell ~33% YoY in 4Q16. Excess supply and weak demand added downward pressure.

When we look at the past five quarters, we see that PotashCorp has missed all its earnings estimates.

CF Industries’ (CF) sales segment includes UAN (urea ammonia nitrate), AN (ammonia nitrate), ammonia, and granular urea.

The MAP (monoammonium phosphate) prices in Brazil saw positive momentum last week. Brazil is still a favorable market for fertilizer producers.

Last week, fertilizer affordability rose to 0.66x from 0.65x week-over-week. A ratio below one means that fertilizers are more affordable than during the base year.

The Fertilizer Affordability Index has shown a downward trend since the beginning of the year. Fertilizers have become more affordable in 2017.

Last week, MAP (monoammonium phosphate) prices continued to fall and brought more pain for phosphate producers (NANR).

The average weekly price of MOP (muriate of potash) at Vancouver has been flat since the beginning of March.

For the week ending April 28, the Fertilizer Affordability Index fell slightly to 0.58x—compared to 0.59x the previous week.

The weekly average price for potash in Vancouver remained flat in the week ended June 24, 2016. Prices are below their 15-year average of $290 per metric ton.

Sociedad Química y Minera de Chile (SQM) has yet to announce its earnings, unlike most of the companies we’ve discussed so far in this series.

Intrepid Potash (IPI) is nearing $1 per share, which means that only a few analysts are covering the stock.

According to Freeport-McMoRan’s agreement with Indonesia’s government, it must divest an additional 20.6% stake in its Indonesian operations to the government or its citizens.

Last week, the Fertilizer Affordability Index remained unchanged at 0.65x week-over-week. Fertilizers are more affordable than during the base year.

The potash fertilizer prices for both granular and standard grade were comfortably higher compared to the levels observed last year around the same week.

In the earlier part of this series, we discussed how shipments impacted CF Industries’ (CF) sales. From our analysis, it’s clear that a rise in selling prices remains the most important growth catalyst for the company.

Phosphate prices Earlier in this series, we discussed phosphate prices in 2017 and what has driven prices down recently. We saw that excess capacity pushed down phosphate fertilizer (NANR) prices during the year. In this part, we’ll look at supply and demand trends for phosphate fertilizers in 2018. Supply and demand In 2017, overall global […]

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

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.

On September 14, 2016, Bayer signed an agreement with Monsanto (MON) to acquire it for $66 billion, or $128 per share. The offer represented a 44% premium over Monsanto’s stock price.

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.

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

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.

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.

Over the past five years, CF Industries’ (CF) gross and EBITDA (earnings before interest, tax, depreciation, and amortization) margins have contracted.

On June 9, Monsanto (MON) stock closed at $117.5 per share.

Approximately 83.0% of analysts have rated Anadarko Petroleum (APC) a “buy.” The average broker target price is $81.52.

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

Approximately 53% of the analysts rate Noble Energy (NBL) as a “buy” and 32.3% rate it as a “hold.” The average broker target price is $47.47.

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.

Approximately 67.0% of the analysts rate Noble Energy (NBL) as a “buy” and 33.0% rate it as a “hold.” The average broker target price is $46.88.

The average broker target price of $81.65 for Anadarko Petroleum implies a potential return of ~19.4% for the stock in the next 12 months.

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

For 4Q16, analysts have an average earnings estimate of -$0.10 per share for Noble Energy (NBL). The low estimate stands at ~-$0.22 per share.

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.

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

Monsanto reported operating income or EBIT of $247 million, which rose from -$272 million in fiscal 1Q16.

The global soybean stock-to-use ratio for soybeans rose to ~25.1% in December 2016, as compared to 24.8% in November 2016.

For 2017, Wall Street analysts are estimating that Monsanto (MON) could report EPS of $4.70, which would translate into earnings growth of 5.3% year-over-year.