Thu, Jul. 14, 12:56 PM
- Shares of North American potash companies are sharply higher as Belarusian Potash Co. announces a deal with a consortium of Chinese firms to sell potash at $219/metric ton for 2016, a 30% discount from last year.
- With potash prices hovering near decade lows due to excessive capacity and soft demand, analysts say the long-delayed China contract is in line with market expectations and positive for potash producers aiming to meet their projections for demand.
- The other major potash sellers, Russia's Uralkali and Canada's Canpotex - owned by Potash Corp. (POT +2.5%), Mosaic (MOS +3.9%) and Agrium (AGU +3.7%) - typically settle Chinese contracts at the same price as Belarus, and the absence of the contract with China, the world’s largest buyer of potash, has depressed demand and sales volumes.
- Belarus agreed in June to sell 700K metric tons of potash to India at $227/metric ton.
Mon, Jul. 11, 8:58 AM
- Israel Chemicals (NYSE:ICL) reportedly will ship potash to India at the same decade-low price agreed by another big seller last month, with Indian Potash Ltd. buying ~600K metric tons of potash at $227/metric ton.
- In the last week of June, Belarus agreed to supply 700K metric tons of potash at the same rate to India, one of the world's top buyers of the material.
- ICL's decision could pressure other key producers such as Russia's Uralkali and the Canpotex trading group owned by Potash Corp. (NYSE:POT), Mosaic (NYSE:MOS) and Agrium (NYSE:AGU) to consider offering potash at similar prices.
Wed, Jul. 6, 12:42 PM
- Agrium (AGU +0.6%) agrees to acquire Cargill's U.S. ag-retail business for an undisclosed sum, though AGU says the businesses have annual revenues exceeding $150M.
- AGU, North America's largest retail seller of crop inputs such as seed, fertilizer and pesticides, will acquire 18 ag-retail locations in Nebraska, South Dakota, Minnesota, Wisconsin, Michigan and Indiana.
- AGU says the deal demonstrates its focus on growing its North American ag-retail business, and strengthens its presence in the U.S. Corn Belt.
Mon, Jun. 27, 2:32 PM
- Belarusian Potash Co. says it signed a deal to supply 700K metric tons of potash to India for $227/ton, a price that analysts say beats expectations and indicates renewed demand for the product.
- It is the first time since 2009 that India reached an agreement before China, which may affect the price of the Chinese contract; last year, China agreed to buy at $315/ton and India later signed a deal for $332/ton.
- India’s signing price was “generally in line” with expectations, RBC Capital's Andrew Wong says, adding that having a contract in place" will help the potash market form a bottom for prices, although we see limited potential for upside improvement."
- North American potash producers are trading lower: POT -6.7%, AGU -4.3%, MOS -8.3%, IPI -11.4%.
Thu, Jun. 23, 8:58 AM
- Potash Corp. (NYSE:POT) +3.2% and Mosaic (NYSE:MOS) +2.6% premarket following reports that Belarus may cooperate with Russian potash producer Uralkali for the first time since a dispute ended the alliance between the world's two biggest potash producers in 2013, triggering a fall in global prices that have not yet fully recovered.
- Belarus Pres. Lukashenko hinted at cooperation during an event in Minsk but did not discuss his conditions; the previous joint venture was based in Minsk, at that time a crucial condition for Belarus and the main concern for Uralkali.
- Lukashenko also said Belaruskali had signed a new potash supply contract with India, although the company later said it was still finalizing the deal; aside from Belaruskali and Uralkali, POT, MOS and Germany's K+S (OTCQX:KPLUY) supply potash to India.
- Other relevant tickers: AGU, CF, IPI, ICL, CNHI, SQM, UAN, IPHS, EVGN
Fri, Jun. 17, 5:19 PM
- Canpotex - the North American potash cartel jointly owned by Potash Corp. (NYSE:POT), Mosaic (NYSE:MOS) and Agrium (NYSE:AGU) says it will not build a planned shipping terminal at Prince Rupert in British Columbia after determining that there is not enough demand to move forward.
- Canpotex says the decision was based on economic and commercial considerations, and that its export capacity in Vancouver, Saint John and Portland was sufficient.
- The new terminal was aimed at boosting Canpotex's export capacity while serving Chinese buyers more quickly than other facilities along the west coast.
Tue, Jun. 14, 6:05 PM
- Agrium (NYSE:AGU) is reiterated with a Buy rating and a new $102 price target, lifted from $93, at UBS, which believes fertilizer markets are bottoming as agriculture fundamentals and crop prices improve.
- The firm says the recent run-up in crop prices has improved sentiment on ag-related names and could bode well for farmers' income and willingness to spend on fertilizers going forward.
- AGU hosted an investor day last week, and UBS sees the data provided by the company as a proxy for the state of the broader fertilizer industry, given that the company is a large player in nitrogen, phosphate and potash markets.
- Related tickers: POT, MOS, CF, IPI.
Thu, Jun. 9, 3:38 PM
- Agrium (AGU -1.1%) is downgraded to Sell from Underperform with an $86 price target at CLSA, which says retail's turnaround is taking longer than expected and the transformation to a hub-and-spoke system will not be done for another five years.
- The firm says another reason for the downgrade is that there are "no levers left to pull," since there are few ways to keep up with new targets after nitrogen plants have stabilized and getting Vanscoy working.
- CLSA says one piece of good news is that AGU's assets are functioning well and urea prices will move up soon, thus helping margins, but the company has yet to revise its guidance to incorporate a wide potential of outcomes.
Wed, Jun. 8, 9:26 PM
- Agrium (NYSE:AGU) CEO Chuck Magro says his company could benefit if some of the biggest makers of seed and agricultural chemicals merge.
- Responding to a question during a company investor day in Toronto about how possible tie-ups of ChemChina and Syngenta or Bayer and Monsanto could affect AGU, Magro said assets could become available if the companies need to raise capital or satisfy anti-trust concerns, perhaps providing some "very good opportunities."
- AGU also plans to build up to 30 North American retail stores for crop farming products by 2020 and is looking for acquisitions of more stores, with plans to claim 25% of the U.S. market over time vs. its current market leading 17% share, the CEO says.
Fri, Jun. 3, 11:59 AM
- China may delay signing potash deals with producers until August or skip the contract for the first time since 2009 after building up inventories and raising domestic output, Bloomberg reports, citing fertilizer producers.
- "China sits on above-normal inventories of up to 5M tons, domestic production is running at full speed and railway deliveries from Russia as high as 120K tons/month continue, so the country is not in a rush,” says a VTB Capital analyst in Moscow.
- The price that China usually agrees at the start of each year with Russian, Belarusian and North American suppliers is a benchmark for suppliers and customers around the world, including Potash Corp. (POT +0.6%), Agrium (AGU +0.4%) and Mosaic (MOS +3%).
- China agreed to buy the soil nutrient at $315/ton for 2015, but the market is in oversupply and if no contract is signed by autumn, the prices might go below the $200 “psychological level,” the VTB analyst says.
Thu, Jun. 2, 12:58 PM
- North America's top potash producing triumvirate of Potash Corp. (POT +2.3%), Mosaic (MOS +2.5%) and Agrium (AGU +0.6%) are doubling down on a production cut strategy they hope will lift prices from their lowest levels since mid-2007, even as some industry observers warn that the strategy threatens their long-term profitability and props up weaker rivals.
- POT CEO Jochen Tilk tells Reuters the miner is sticking with its tighter supply strategy, saying "the reason it works well is the resources in potash are more concentrated than any other commodity."
- Some suggest the group should adopt Saudi Arabia's oil strategy, boosting production to drive out higher-cost competitors, with the goal of maximizing profit over time - "that's more sustainable than trying to artificially maintain the price by closing [low-cost] facilities," says Bryan Agbabian, head of agricultural equities at Allianz Global Investors.
- "What I fear for some of these companies with high dividend payout ratios, is that they can curb production for a brief period of time, but if they do it in perpetuity they're going to have to face another dividend cut," says Stone Asset Management's Moshin Bashir.
Tue, May 31, 3:39 PM
- Agrium (AGU -0.9%) is upgraded to Buy from Hold at Stifel, which believes the stock is defensive as crop nutrient prices decrease, while the company's growth could enjoy a boost from the continuing consolidation of the sector.
- Meanwhile, Stifel downgrades Potash Corp. (POT -1.2%) and Mosaic (MOS -0.7%) to Hold from Buy, with the firm citing overcapacity of fertilizer production as well as pressure on fertilizer prices caused by oil price declines and the rising U.S. dollar.
Thu, May 19, 12:41 PM
- Potash supply contracts with Chinese buyers should be settled in 2-4 weeks, setting a much-needed global price floor, Potash Corp. (POT +2.6%) CEO Jochen Tilk tells Reuters.
- The CEO expects Chinese buyers to settle first with Belaruskali and Russia's Uralkali, as is typical, followed by a contract with the Canpotex group owned by POT, Mosaic (MOS +1.5%) and Agrium (AGU -0.6%).
- Tilk also says POT's $1 annual dividend is sustainable, noting that the company's capital spending is set to decline next year.
- Now read Potash Corp.: Is this a buy point?
Tue, May 3, 5:33 PM
Tue, May 3, 12:13 PM
Mon, May 2, 5:35 PM
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Agrium, Inc. is a retail supplier of agricultural products and services in North America, South America and Australia and a global wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America. The company operates... More
Sector: Basic Materials
Industry: Agricultural Chemicals
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