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Fertilizer production and raw material costs are at high levels and are expected to rise in the fourth quarter, according to INTL FCStone analyst Fábio Rezende. Natural gas, used to make ammonia, has hit its highest level since 2014 on higher oil prices and strong Asian demand.
Low global inventories and above-average demand are also supporting prices.
Higher natural gas and ammonia costs raise the floor for nitrogen and phosphate prices like urea and DAP, which tightens the cost outlook for fertilizer-dependent crops. Analysts see little chance of significant price declines in the short term.
folhadolitoral.com.brRedaçãoOct 19, 2018After 92 past bullish macro events, Urea moved a median +0.0% over 5 sessions (50% higher; middle half -2.0% to +3.6%), and +4.8% over 20.
After 28 past bullish macro events, DAP moved a median -0.2% over 5 sessions (36% higher; middle half -0.9% to +1.3%), and -0.8% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
