Daily Chemical Reactions | Global Agriculture

Chain Smokin’ – Farm Input Sellers Hold Lucky Strikes As Food & Bio-Product Producers Light Up Crop Competition   
May 15, 2024
Commodities Mentioned:
Natural Gas, Potash, Ammonia, Corn, Ethanol, Soybeans, Wheat, Cotton, Canola, Biofuel, LCFS, SAF, Renewable Diesel, Hydrogen, CO2, Renewable Power
Companies Mentioned:
Bayer, Corteva, Nutrien, OCI Global, Fertiglobe, CF Industries, Mosaic, FMC, American Vanguard, BASF, Bunge, ADM, Tesla, Yara

Global Agriculture Monthly Report

Chain Smokin’ – Farm Input Sellers Hold Lucky Strikes As Food & Bio-Product Producers Light Up Crop Competition   

Key Findings

  • General Thoughts: We anticipate increased competition for crops to favor farmer income and spending on inputs, though this setting suggests raw material headwinds and higher prices ahead for many downstream, end-products.
  • Agriculture Inputs: We expected a weaker agriculture economy YoY in 2024 leading to a more constructive setting in 2025, and our views after sector 1Q reports and recent commodity market movements are mostly unchanged.
  • Sustainable Agriculture: We discuss the OCI Global blue ammonia project and its ambition to serve premium priced European markets, and why existing producers shifting to cleaner production face less risk than most new entrants.
  • Biofuels: US ethanol production margins have bounced to YTD highs, after falling from a strong close to 2023, and we discuss challenges facing clean fuel initiatives as consumers factor them into their emission reduction targets.
  • Crop Markets & Demand: We discuss recent crop price strength, reflecting support for farmer income, and recent agriculture industry developments that are likely to lift investor confidence and push their focus to a better 2025.

Exhibit 1: The link between crop prices and crude oil end markets is poised to rise further this decade.

Source: Bloomberg, C-MACC Analysis, May 2024

See PDF below for all charts, tables and diagrams


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