Global Agriculture, Global Market Analysis

Don’t Sell The Farm! Crop Market & Farm Input Health Indicators Turn More Constructive

March 20, 2024

Companies Mentioned: Nutrien, CF Industries, LSB Industries, Yara, FMC, POET, Valero, The Andersons, Green Plains, BASF, Clariant, Casale, EuroChem, Sinopec, Eni, JERA, Freeport LNG, Atlas Agro, ABB, Borealis, Bloom Energy, BP, Hy Stor, Schneider Electric, Jupiter Ionics, Kraton, CIP, LG Chem, Lotte Chemicals, Volt Energy, Petrobras, Wärtsilä
Commodities Mentioned: Nitric Acid, Phosphate, Nitrogen, Corn, Soy, Canola, SAF, Natural Gas, LNG, Ethanol, Naphtha, Crude Oil, Steel, Ammonia, Hydrogen, Nitrogen, Hydrogen, Carbon, Ammonia

Monthly Update – Agriculture – Daily Chemical Reactions

Don’t Sell The Farm! Crop Market & Farm Input Health Indicators Turn More Constructive

Key Findings

General Thoughts: Recent crop price strength, following a period of weakness from multi-year highs in 2022, is signaling farmer income may have found a floor, lifting sentiment toward fertilizer & agricultural chemical equities.
Supply Chain/Commodities: We discuss recent support in US ammonia production margins relative to European levels, our constructive agriculture market takeaways from CERA, and flag a few notable fertilizer market headlines.
Energy and Agriculture: North American ammonia producers hold a sizable cost advantage relative to Europe and Asia, and we highlight regional natural gas prices to display this development at the feedstock level in early 2024.
Sustainability/Energy Transition: We highlight the global ammonia average price relative to gray, blue, and green production costs to display challenges facing the green build-out and separately show US ethanol margin trends.
Downstream, Crop Supply/Demand: We highlight the recent improvement in crop prices following our recent comments on tighter gasoline markets. We note food and fuel price inflation in March may exceed most estimates.

Exhibit 1: In 2023, US Fertilizer equities outperformed the S&P Fertilizer & Agricultural Chemical Index, but both have trended higher YTD amid increasingly positive sentiment toward the 1H24 Northern Hemisphere planting season.