CVR Partners LP

Natural gas prices are critical for nitrogen and ammonia-based phosphate fertilizer producers.

In 2013, about 54% of global ammonia was upgraded to urea, according to FERTECON. But urea prices have rebounded from their lows at the beginning of 2016.

Granular urea prices in the Middle East declined 5% to $200 per metric ton in the week ended July 1. It was $210 per metric ton in the previous week.

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.

March soybean futures contracts were trading near the support level of $8.70 per bushel on February 23. Prices fell for the second consecutive trading day.

Soybean futures prices for January delivery were trading near 875 cents per bushel on December 8, 2015.

For each of the next four quarters, Intrepid Potash’s EBITDA is estimated to grow YoY. For 1Q17, analysts estimate EBITDA of $2.6 million.

On September 7, 2017, PotashCorp (POT) and Agrium (AGU) provided an update on the status of their merger. The merger was initiated almost a year ago.

Agrium’s Wholesale segment’s gross margins declined from 27% in 1Q15 to 24% in 1Q16. This was primarily driven by a decline in gross margins in the Nitrogen and Phosphates segments.

Soybean futures prices on the Chicago Board of Trade (or CBOT) for March expiry fell by 0.09% and settled at $8.72 per bushel on February 12, 2016.

PotashCorp’s 3Q16 sales PotashCorp’s (POT) business comprises the three major fertilizers—nitrogen, phosphate, and potassium (XLB). In 3Q16, the company earned about 38% [1. calculated as segment sales excluding freight, transportation and distribution costs divided by total sales excluding freight, transportation, and distribution costs] of its total sales from its Potash segment, 32% from its Nitrogen segment, and 30% from […]

According to CF Industries, nitrogen prices could remain under pressure as new capacities come online in 2017. However, the company believes that things should improve in 2018.

Soybean futures prices for January delivery were trading near the crucial support level of 880 cents per bushel on December 10, 2015.

CF Industries reported second-quarter sales of $1.3 billion, which beat analysts’ estimate of $1.2 billion.

In September, the global wheat inventory declined 1.5% to 249 million metric tons compared with 252 million metric tons in August 2016.

Soybean January futures contracts trading on the CBOT (Chicago Board of Trade) fell by 2.6% and settled at $8.82 per bushel on December 7, 2015.

CF Industries Holdings’ (CF) stock rose by almost 8.4% on February 18, 2016, the day after the company’s 4Q15 earnings release.

CVR Energy (CVI) and its subsidiary CVR Refining (CVRR) reported their second-quarter results on July 25 after the markets closed.

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.

CF Industries (CF) reports its sales in five segments: UAN (urea ammonium nitrate), Granular Urea, Ammonia, AN (ammonium nitrate), and Other Nitrogen Products.

Realized prices for fertilizer companies are the main culprit for the dismal performances among companies in the agricultural fertilizer sector.

According to the U.S. EIA, for the first time natural gas will be the largest fuel source for energy. Natural gas should pass coal in 2016, which may explain why coal prices are low.

Urea prices in the US Gulf NOLA rose 4.8% week-over-week to $197 per short ton. Prices in the Middle East rose 3.1% week-over-week to $200 per metric ton.

In 4Q17, the overall nitrogen shipments of the five companies discussed below moved lower year-over-year.

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

So far this year, some major agribusiness stocks, particularly in the fertilizer sector, have performed poorly.

In the week ending November 3, agricultural fertilizer stocks were broadly positive.

As of September 18, the consensus mean price target on CMP stood at $69.5 per share, which was about 1.6% lower than the closing price of $70 on the same day.

In this article, we’ll discuss the outlook for the capacity additions of ammonia, the fundamental nitrogen fertilizer, in the near term.

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

CVR Partners (UAN) was the top MLP gainer last week, which ended on January 5, 2018. It rose 23.2%.

China is one of the largest fertilizer consumers in the world. Investors are concerned that retaliatory measures might hurt fertilizer companies.

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

Companies forfeit the opportunity to benefit from lower natural gas prices when they hedge. But hedging activity protects companies’ earnings when natural gas prices rise.

Today, RBC upgraded CF Industries (CF) from its “underperform” rating to “sector perform.”

CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.

After CVR Partners’ 4Q15 earnings release, its valuation fell to 7.5x from 8.8x. As of February 21, it was trading close to the peer median of 7.3x.

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

On November 9, wheat was trading at $4.1 per bushel—74 basis points higher than $4.03 in October and 17% lower than $4.9 per bushel in November 2015.

Urea prices have fallen YTD (year-to-date) as of June 23, 2017. They’re now trading even lower than the levels they saw in the corresponding week in 2016.

Noble Midstream Partners (NBLX) was the top MLP loss last week. Noble Midstream Partners fell 5.6%.

Last week, which ended July 13, was broadly negative for the agribusiness sector. The broader market index was positive.

In its January report, the USDA (United States Department of Agriculture) reported that the world’s ending stock for wheat rose to 253 million metric tons from 252 million metric tons in December.

Agrium’s (AGU) gross margins in 2016 stood at 24.8%, a 26.3% fall from 2015.

Overall, CF Industries’ shipments for its combined segments grew 14% during the quarter to 3.6 million tons from 3.2 million tons in 3Q15.

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.

During 4Q17, CF Industries received a one-time tax benefit of $491.0 million, or $2.09 per share, from the lowered corporate taxes in the US.

Wheat prices traded at an average of $4.4 per bushel in 2016, lower than their average of $5.1 per bushel in 2015.

Plains All American Pipeline (PAA) was the biggest MLP loser last week, which ended on January 19, 2018. The partnership ended the week 6.1% lower.

In the recent quarters, fertilizer companies (MOO) have rationalized their output and costs to sustain the downward momentum in fertilizer prices that seemed to keep going down.

CF Industries CF Industries (CF) has had a decent run so far this year. YTD (year-to-date), the company has returned 11.5%, which is slightly shy of the S&P 500 Index’s (SPY) return of 11.8% over the same period. Over the last one month alone, the stock has risen by ~20.9%, which has left behind other […]

On February 10, 2017, six analysts recommended either a “strong buy” or a “buy” for CF Industries (CF) stock.

Last week was broadly negative for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) fell 53 basis points, and SPY rose 42 basis points.

CVR Partners (UAN) rallied 9.7% in the week ended July 13, making it the top MLP gainer for the week.

As of January 18, 2017, six analysts have recommended either a “strong buy” or a “buy” for PotashCorp (POT) stock, although the majority still recommend a “hold.”

Industry experts often show ex-China global urea capacity utilization because China’s export tax makes domestic producers’ urea more expensive for international buyers.

For the week ending March 18, the pet coke index remained unchanged compared to a week ago.

CVR Partners is expected to report a loss per share of $0.06 in the second quarter compared to a loss per share of $0.03 in the corresponding quarter a year ago.

The average UAN price for CVR Partners at gate, which excludes transportation costs, was $227 in 3Q15, compared with $254 per ton in 3Q14.

In the week ending April 22, 2016, ammonia prices in Tampa CFR (Cost and Freight) continued to move sideways for the 13th straight week.

On average, urea prices in the Middle East fell as much as 4% week-over-week to $237 per metric ton from $247 per metric ton a week ago.

In recent quarters, fertilizer companies have experienced earnings growth deceleration due to unsupportive prices pressured by excess production capacity.

The week ending January 27 was broadly positive for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) rose by 64 basis points.

In recent weeks, US natural gas prices have started trending higher, and they continued to do so last week. Prices significantly impact nitrogen fertilizer producers.

Soybean futures contracts on the CBOT, for January expiry, rose by 0.93% on January 13. Soybean futures prices rose due to stronger demand from China.

Soybean futures contracts, for March expiry, were trading near the crucial support level of $8.85 per bushel on January 19, 2016.

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

China is the largest exporter of urea, which saw an increase in prices in the previous week ended March 18.

CF Industries (CF) is expected to announce its 1Q16 earnings on May 4, 2016. CF Industries has lost 17% of its value since January 2016, with the stock trading at $33.70 as of April 27, 2016.

In this part of our series, we’ll discuss the valuation multiples for CF Industries (CF) and compare with peers’ (XLB) such as PotashCorp (POT), Agrium (AGU), Mosaic (MOS), CVR Partners (UAN), and other agribusiness stocks.

Coal prices, like natural gas prices, have hit a low point due to a low demand and excess supply imbalance. Recently, natural gas prices have ticked up while coal prices are mostly unchanged.

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

As most urea is produced using coal in China—anthracite in particular, nitrogen fertilizer prices are affected by movements in coal prices.

Several midstream stocks hit their respective 52-week lows in the last five days. Crude oil prices took a hit yesterday amid concerns over trade talks.

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

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.

As of January 24, 2014, the market assigned a value of $1.3 billion to the company, with a trailing PE ratio of 12.48x and dividend yield of 9.86%.

For the week ending November 2, the natural gas prices at Henry Hub declined to $3.29 per MMBtu from $3.36 per MMBtu.

In the week ending November 2, urea prices continued to drop—a continuation of the trend we observed in the past few weeks.

Natural gas prices for the week ending October 26 increased week-over-week at most locations in the US.

CVR Refining (CVRR) reported its third-quarter results on October 24 after the markets closed. The stock rose 7.2% in after-hours trading yesterday.

In the week ending October 19, natural gas prices trended lower after experiencing a spike in the week ending October 12 at Henry Hub.

In the week ending October 19, urea prices in the NOLA region of the US and in Brazil paused after a meteoric rise since the beginning of April.

Last week, global tensions remained high, and natural gas prices spiked as the overall stock market traded in the deep red.

Nitrogen fertilizer companies CF Industries (CF), Nutrien (NTR), and CVR Partners (UAN) fell last week due to the broader market sell-off.

Natural gas prices are a key price driver for urea and other nitrogen fertilizers.

Urea prices continued to strengthen last week, which added to the optimism surrounding nitrogen companies (XLB).

On October 2, CF Industries (CF) received a target price upgrade from UBS. The stock gained ~1.8% and rose to $55.8 during the day.

In the week ending September 28, the EIA (U.S. Energy Information Administration) reported that the natural gas prices in the United States were mixed.

In the week ending September 28, the urea prices in NOLA (New Orleans) and Brazil made new highs again. The rising trend started in May.

The week ending September 21 was broadly positive for the fertilizer sector. MOO rose 2.3% from the week ending September 14.

Low natural gas prices in the US have been highly beneficial for North American fertilizer companies (XLB) including CF Industries (CF), CVR Partners (UAN), Nutrien (NTR), and Mosaic (MOS).

We track natural gas prices since they can have a significant impact on the prices of nitrogen fertilizers companies.

Urea, the most common nitrogen fertilizer, has been on an upward trend in recent weeks.

We’re looking at natural gas prices in this series, primarily because they make up two-thirds of the input costs for nitrogen-based fertilizers.

American Midstream Partners (AMID) was the lowest-performing MLP in the week ended July 27.

Between July 11 and July 18, natural gas spot prices at Henry Hub fell about 4.2% to $2.72 per MMBtu (million British thermal units).

Wall Street analysts estimate sales growth of $102 million in the second quarter, which would be a 4% year-over-year increase from $98 million in the second quarter of 2017.

Last week, urea prices continued to be positive for companies (XLB) such as CF Industries (CF), Nutrien (NTR) (POT), and CVR Partners (UAN).

The upward trend for fertilizer continued last week, with CVR Partners (UAN) rising 9.6% week-over-week to $3.30.