Corn To Be Wild – Low-Cost Ammonia Producers Set to Enjoy the Dancing, As Corn Buyers Brawl Outside!

Companies Mentioned: Corteva, Nutrien, CF Industries, Koch Fertilizer, ExxonMobil, Woodside Energy, Ube, Tosoh, Daicel, Air Products, TotalEnergies, BP, Shell, Rosneft, Versalis, SABIC, Dow, LyondellBasell, Prax, POET, Valero, Green Plains, ADM, Bunge, Gevo, The Andersons, BASF, Blue Biofuels, Scoular, Plug Power, Synthomer, Neste, PCS
Commodities Mentioned: Corn, Ammonia, Biofuels, Natural Gas, Crude Oil, Ethylene, Naphtha, Ethanol, Soybeans, Oilseeds, Hydrogen

Key Findings

General Thoughts: We maintain a more constructive view of crop prices in 1Q25 than agriculture sector equities overall, and we continue to favor crop input (seed, fertilizer, etc.) providers relative to crop consumers in 2025/26.
Supply Chain/Commodities: We flag a few takeaways from the Corteva 4Q24 earnings call and discuss corn price strength and EU natural gas prices rising relative to US levels – positive developments for US ammonia producers.
Energy/Upstream: We flag BP’s efforts to sell its Gelsenkirchen, Germany refinery and petrochemical assets, including ethylene crackers, and show a general view of the global average refinery and ethylene cracker margins.
Sustainability/Energy Transition: US ethanol exports set a record in 2024, but policy uncertainty and low-to-no margins have spurred concerns for 2025 – higher ethanol prices to offset corn costs are needed to lift returns.
Downstream/Other Chemicals: The widening US trade deficit in late 2024 reflects record imports and shifting export trends, with tariff and policy shifts reflecting risk to our commodity, including agriculture, sector view.

Exhibit 1: US ammonia producers could see another year of outsized margins, a plus for domestic investment.