Daily Chemical Reactions

Cornfield Chase – Farm Input Market Fundamentals Find Support, Sustainable Farming Needs Incentives To Sprout
June 8, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Nestle, Nutrien, CF Industries, LSB Industries, OCI Global, Yara, Corteva, BASF, FMC, Bayer, PKN Orlen, Grupa Azoty, Trafigura, Williams, Asahi Kasei, Mitsui, TotalEnergies, Enbridge, Petronas, Ascend Elements, Axens, Clean Energy, Entegris, Croda, Shell, Western Resources, NuStar, Vertex Energy, Talos Energy, Hystar, Repsol, Schneider, Solvay, BAE Systems, Stamicarbon, NuScale Power, Aramco

Daily Chemical Reaction

Cornfield Chase – Farm Input Market Fundamentals Find Support, Sustainable Farming Needs Incentives To Sprout

Key Points:

  • Oversupplied fertilizer and crop input markets have weighed on producer profit YTD, but crop developments suggest farmer spending is unlikely to halt – tighter markets are likely ahead.
  • Sustainable farming practices will be challenging to implement broadly without improvement in incentives flowing directly to farmers – we highlight Nestle’s efforts as a positive development.
  • US Ammonia prices and producer profit have mostly fallen from 2021-2022 highs to the high end of the 2016-2020 range, while most European producers face an unprofitable 2Q23 setting.
  • Long-term demand forecasts for clean ammonia vary significantly, even among ammonia producers – we flag three ammonia producers’ May/June investor presentations as examples.
  • US chemical and grain rail traffic fell last week and is lower YTD than 2022, but there has been improvement in motor vehicles and parts. We also discuss rail trends for North America overall.

See PDF below for all charts, tables and diagrams


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