sophocles

Understanding the Dollar's Reversal: Who Will Feel the Pain?

I don't understand your comment on fertilizers. You are saying nat gas may get hit and nitrogen producers can get hit as a result. Nat Gas is an input for nitrogen, so lower NG helps nitrogen-producers.

Chicken Little...er...Morgan Stanley is Worried about Fertilizer

A poster on VT.TO board noticed the irony that MS thinks demand for fertilizer is falling but another one says

Monsanto won't remain this cheap for long.

TraderMark, please send a mail to [e-mail]

Chicken Little...er...Morgan Stanley is Worried about Fertilizer

We made the same argument on the investorvillage VT.TO board. Potash price was rising by $50/t in January, so it would not make POT unhappy if there is a shipment delay in December so that they can ship more in January at a higher price. Vale canclled some iron ore shipping to China driving the spot price up and putting a squeeze on China in the iron ore contract negotiation. POT and MOS could do the same to China. I think potash contract will settle earlier than the iron ore contract.

Chicken Little...er...Morgan Stanley is Worried about Fertilizer

The fertilizer Institute put those inventory nimbers. we discussed it on the investorvillage VT.TO message board. You could see the same inventory numbers on POT website. You can see there is an inventory increase from Nov to Dec but inventory is lower than the 5-year average even after all those production raises by POT, MOS, AGU, etc. POT is opening a new mine in Brunswick and commissioned another one in Saskatchewan. BHP is doing a feasibility study in Saskatchewan. If there is no demand, why so much activity? I think the increase in inventory was NOT demand related. The Cornbelt potash price has increased $100/st in the last 4 weeks.


POT: Potash: Seasonality, rail delays behind potash restocking; buy on pullback- BofA

BofA says an there was an overreaction to inventory data. They see the recent pullback in fertilizer stocks (down 14-22% since 1/15 vs. 3.5% for S&P index) as an opportunity to add to positions in Buy-rated PotashCorp (POT) and Mosaic (MOS) ahead of what is likely to be a break-out year for potash. The firm suspects investors are overreacting to Dec producer inventory data, which showed a sequential increase to 1.8 mln short tons, but down 21% y-y. They think producers needed to replenish Dec stocks ahead of U.S spring planting, thus pushing the normal October/November restocking period out by one month. Potash shipments declined last month, adding to inventories, but railcar delays at C.P Rail rather than a lull in customer orders may be to blame.