Fertilizer Companies

[Catalyst_59]

I wanted to try and consolidate information on the fertilizer companies in a newer thread in order to make it more accessible going forward. There has been some great contributions from our community so far concerning our analysis of potential opportunities playing these companies.

Previous threads:

All things Agriculture

I wanted to start a conversation on Ag companies. Grains are surging over the Ukrainian invasion. Machinery companies: DE, AGCO, CNH Materials: CF, NTR, MOS I don’t have a list of grain ETFs handy so feel free to add and comment. AGCO and CNH have production facilities in Europe, DE is mostly North America CF, NTR, MOS mostly North America Sorry this is rushed and mostly a placeholder.

CF Industries potential run-up to earnings and subsequent drop

Greetings folks, first DD so I appreciate any input. Who: CF Industries (ticker CF) NYSE CF Industries refines natural gas into anhydrous ammonia which is the largest source of nitrogen used in agriculture. What: Earnings play When: Earnings are expected to be released 02/16/22 after hours, still subject to confirmation. Why: Recently CF has received an updated earnings estimate of $3.05 compared to an expected $0.40 which is an increase of 662%. CF raised guidance for 2021 citing higher than expected usage of fall nitrogen and higher prices due to increased global demand. CF has bounced off a recent high of $74.77 and is trading in the mid 60s as of 01/19/22. Recent support appears to be around $55.00 with a nice double bottom on the daily going back to December and November. Potential play: First, basic fundamentals as to the usage of nitrogen in agriculture. Nitrogen is a macro-nutrient that crops use to grow and make grain/fruit. The highest usage in the US goes to corn(maize) and wheat production as these crops do not produce their own nitrogen (soybeans do, to a limited extent). There are three form of commercial nitrogen that see the widest usage, anhydrous ammonia in gas form, urea in granular form, and UAN in a liquid solution. Urea and UAN can volatilize and leach due to weather factors which means these forms are usually applied when the growing crops need them, basically spring and early summer. Anhydrous is unique in that it can be injected into the ground and will remain inert with soil temperatures under 56 degrees. The fall of '21 was drier than normal which allowed much of the corn belt to apply anhydrous ammonia to a greater extent than normal. This will result in a net lower amount needed/purchased in the spring. I believe we will see a run-up to earnings and then a subsequent drop following earnings release. CF will have difficulty repeating such a performance with their earnings going forward. On earnings release we may see a strong bullish reaction driven by algos picking up the EPS increase. Following earnings I expect a pullback as traders reason that the above average fall application of nitrogen will lead to lower that average spring application. This is an earnings play so it is definitely a gamble. I would love more looks at this and please tell me what you all think. And it goes without saying, not financial advice. Good luck Valhalla

Thank you to everyone who has commented and added to these threads! There are other mentions of the fertilizer companies throughout the Ukraine Invasion thread( I think, that thing became a monster!) so please forgive me for not combing through that. Also, if I missed anyone’s comments elsewhere do not take that a being dismissive towards it! There’s been so much information compiled by our community in the last few weeks that it becomes difficult to be able to read it all!

If you have played these tickers please add you thoughts on support/resistance, bid/ask, intra-day and overnight movements.

Obviously we have seen these tickers make substantial bullish moves over the last month. Factors for this include supply and workforce disruptions from COVID, natural disasters (Hurricane Ida), the Ukraine War, surging global grain and oilseed prices, and as of 03/21/22 the report of a railroad worker strike in Canada.

These tickers have become captive of both the underlying production factors and the news cycle. On 03/09 there was a substantial sell-off because of the rumor of a peace deal, followed by a recovery a few days later after Russia announced export bans on potash. There is volatility so please try to identify support and resistance before you decide if you want to take a position in these companies.

[Catalyst_59]

Potash Tickers:
MOS
IPI
ICL

Nitrogen Tickers
CF
NTR
UAN

If you play these I suggest having them near each other on a watch-list because they tend to follow each other; if you see divergence it may be an indication of entry and exits.

CF and NTR had been fighting the $100 resistance which they both held yesterday and AH/PM as of 03/22/22

IPI had a 20% bull run yesterday, you may want to see if it cools off a bit.

MOS seems like it has broken near-by resistance at $65, I have been playing this one the most and there seems to be a pretty decent floor at $56-58 (safest). Less safe would be $63-64.

Once again, please add your insight!

[nano]

Posting this here for @T_Milly

TikTok - Make Your Day

[T_Milly]

Good looks :tmillymath:

[Conqueror]

Locking this in favor of: FERTILIZER - Equities Discussion

Used to be able to move merge topics but can’t anymore.