SPDR S&P® North American Natural Res ETF

Monsanto’s (MON) forward PE valuation multiple has recently trended higher, and so has the price of its stock.

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

Unlike corn, the global soybean stock-to-use ratio is lower compared to the global stock-to-use ratio of 26.5% last year.

Approximately 73% of the analysts rate Anadarko a “buy,” 22% rate it a “hold,” and 5% rate it a “sell.” The average broker target price is $72.52.

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.

About 42% of analysts rate Hess a “buy,” and ~58% rate it a “hold.” The average target price of $64.89 implies a return of ~29% in the next 12 months.

The global stock-to-use ratio for soybeans rose 1.6% to ~23.5% in October—compared to 22% in September. Soybean’s ratio is lower than last year.

Demystifying the cost curve Earlier in this series, we saw that prices of nitrogen have fallen over the years, despite its significance in crop growth and feeding the vast population. The lower prices are due to a flatter cost curve, which we’ll explain in this part. Flat cost curve In the chart above, we compare a […]

Chinese producers primarily use coal to produce nitrogen, especially urea-based fertilizers, while producers in North America mostly rely on natural gas.

Corn prices on September 12 were 1.6% higher at $3.30 per bushel compared to $3.20 per bushel in August 2016.

Forward price-to-earnings (or PE) is a relative valuation method that considers a company’s future earnings for calculation.

The gross margin rate for Mosaic’s Phosphate segment fell significantly in 2Q16, to 10% from 21% in 2Q15.

Approximately 63% of analysts rate Noble Energy (NBL) a “buy,” and 34% rate it a “hold.” The remaining ~3% rate it a “sell.”

Approximately 65% of analysts rate EQT (EQT) a “buy,” and 30% rate it a “hold.” The remaining 5% rate it a “sell.”

Approximately 73% of analysts rate Anadarko a “buy,” whereas 22% rate it a “hold,” and 5% rate it a “sell.” The average broker target price is $66.50.

In June 2016, the global soybean stock-to-use ratio stood at 20.2%, which was at its lowest point compared to the past four years.

Israel Chemicals, which shipped 0.5 million metric tons during the recent quarter, saw the largest jump in shipment growth—20% year-over-year.

The fertilizer industry moves in cycles and with most companies experiencing a decline in margins, the industry seems to be in the bottom cycle.

Last week, nitrogen producers CF Industries (CF), CVR Partners (UAN), Terra Nitrogen (TNH), and PotashCorp (POT) ended in the red.

Last, average MAP prices in Brazil inched up to $353 per metric ton from $352 per metric ton the previous week.

MAP (monoammonium phosphate) is the second-most used phosphate fertilizer after DAP (diammonium phosphate).

In the international market, ammonia at the Black Sea, Ukraine, inched up to $275 per metric ton FOB, a rise of 1.9% from the previous week.

For fiscal 2Q16, Monsanto reported EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.8 billion.

Fertilizer prices and input costs affect all players in the industry. Survival and profitability come down to where a company stands on the cost curve.