Food for Thought: Global Agriculture Market Improvement In 2025 Likely, Low-Carbon Transition Challenges to Stay High

Daily Chemical Reaction

Food for Thought: Global Agriculture Market Improvement In 2025 Likely, Low-Carbon Transition Challenges to Stay High

Key Findings

• General Thoughts: We are more confident that agricultural sector conditions will improve in 2025/26 relative to 2024 than in the rapid formation of price premiums for low-carbon on-farm inputs/products.
• Supply Chain/Commodities: We highlight FMC and Syngenta 2H24 global crop protection market views, and we give our view of global ammonia markets following Yara, CF, and LSB 3Q24 business updates.
• Energy/Upstream: We highlight the Shell 3Q24 report showing strength in indicative chemical margins relative to refining margins, though base chemical margins now reflect relative declines, as we expected.
• Sustainability/Energy Transition: We discuss the development of US low-carbon ethanol and ammonia markets, flagging two US projects relying on CCS when production starts and a few global policy shifts.
• Downstream/Other Chemicals: We comment on agriculture sector equity performance, give our view, and highlight our CEO Cooley May attending the upcoming Ammonia Energy Association conference.

Exhibit 1: US ammonia production margins have increased YTD in absolute terms and relative to Europe.

Source: Bloomberg, C-MACC Analysis, October 2024

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