Global Agriculture, Global Market Analysis

Down On the Farm? Most Cautious Views Target Near-Term Trends, Medium-to-Long Term Trends Remain Constructive

November 20, 2024

Companies Mentioned: Yara International, CF Industries, Nutrien, LSB Industries, Koch, Fertiglobe, Bayer, BASF, Corteva Agriscience, Syngenta, CNH, CHS, ADAMA, ADNOC Group, FMC Corporation, ExxonMobil, Green Plains, ADM, Valero, The Andersons, Cargill, McDonald's, The Mosaic Company, Nestlé, John Deere, COOPERNORTE
Commodities Mentioned: Ammonia, Urea, Crops, Fertilizers, Nitrogen, Natural Gas, Soybeans, Potash, Biofuels, Carbon Dioxide, Fuels SAF, Ethanol, Corn, Biostimulants, Biopesticides, Biofertilizers, Soil, Wheat

Global Agriculture Report

Down On the Farm? Most Cautious Views Target Near-Term Trends, Medium-to-Long Term Trends Remain Constructive

Key Findings

General Thoughts: The S&P 500 Fertilizer & Agricultural Chemical Equity index has underperformed YTD, and the highlighting of cautious views for 2025 following expectedly weak 3Q reports may set many up for upside surprises.
Supply Chain/Inputs: We are cautious on the agriculture economy in 2024 but more constructive on 2025/26. We discuss farm-input markets and recent profit outlook cuts preceding a potential sentiment shift to the positive.
Biofuels: We discuss recent downward pressure on US ethanol margins, though we continue to see 2024 as a record year for domestic ethanol exports. We also flag varied biofuel ambitions among new entrants and oil majors.
Sustainability/Transition: We highlight developments in sustainable and regenerative agriculture, focusing on bio-stimulant, bio-crop protection, and bio-fertilizer developments, and farm-input player growth in this area.
Downstream/Other: We look at crop market developments, expectations for farmer income to remain under pressure in 2025, which we agree with, and why positive surprises could develop in the setting of low expectations.

Exhibit 1: S&P 500 Fertilizer & Agriculture sector equities have underperformed the S&P 500 and the S&P 500 Chemical sector YTD, though they have outperformed crop prices. Our sector outlook for 2025/26 is constructive.