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StoneX analyst Josh Linville expects global phosphate values to stay under pressure into mid-2023 because world demand has been weaker than expected. He also cites China returning to normal export volumes and a high-cost Florida producer seeing its costs fall.
Expected weak demand and rising Chinese supply point to lower phosphate prices, which lowers DAP costs for feed phosphate buyers. Fall and spring demand are seen as cautious, so the pressure may persist.
stonex.comJosh LinvilleApr 27, 2023stonex.comJosh LinvilleApr 27, 2023After 480 past neutral trade events, Corn moved a median +0.2% over 5 sessions (54% higher; middle half -1.1% to +1.6%), and +0.7% over 20.
After 40 past bearish trade events, DAP moved a median -0.1% over 5 sessions (38% higher; middle half -3.7% to +0.5%), and -2.4% 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.
StoneX expects phosphate prices to stay under pressure because global demand is weaker than expected, China is returning to normal export volumes, and a high-cost Florida producer's costs are falling, all of which point to bearish supply and demand fundamentals consistent with a sharp DAP drop.
Dated 2023-04-27, a day before the drop, it signals weak global phosphate demand, China returning to normal export volumes and falling producer costs, all bearish for DAP prices and plausibly feeding a sharp one-day selloff.
StoneX's bearish view on phosphates (weak global demand, China returning to normal export volumes, falling producer costs) published on the move date points to supply-side and sentiment pressure on DAP prices.
StoneX expects phosphate values to stay under pressure due to weaker-than-expected demand and China returning to normal export volumes, which reinforces the bearish supply/demand mechanism.
