Fertilizer Markets and Finance

On this blog I publish posts & news about what's new in the fertilizer industry and how it's markets are affected by geopolitical developments, environmental changes and monetary policies. I also focus on how farmers are affected by government decisions, and economic fundamentals of the market place. I am passionate about agriculture in Trinidad and write about problems farmers face in the agriculture industry especially in rural areas. Thanks for viewing.

Jonathan Mohan


Some of my highlighted work -
The destruction of Trinidad and Tobagos’ local banana market.
http://tinyurl.com/pne2lwv

The geopolitics and economic stratagem of Uralkali’s bombshell will change the global potash oligopoly.
http://tinyurl.com/l57nco8
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KARACHI: The Fauji Fertilizer Company has posted a 28.9% rise in profit to Rs4.9 billion in the January-March 2013 quarter on back of higher sales and stable prices of key agricultural inputs. The company’s earnings have clocked in at Rs3.86 earned for every share of the company. It has also announced a cash dividend of Rs3.5 per share.

Revenues jumped 45% to Rs16 billion, compared to last year, on the back of increasing sales volumes, analysts said.

The company saw a slight decrease of 3.7% in its distribution costs to Rs1.29 billion, but gross margins also came down 2.9 percentage points to 47.5% because of relatively lower urea prices.

Fauji Fertilizer’s other income was lower by 30% year-on-year to Rs1.5 billion as a result of lower dividend income from Fauji Fertilizer Bin Qasim (FFBL).

Read more at The Express Tribune

In late Friday afternoon trading, the Australian Securities Exchange, or ASX, shrugged off weaker-than-expected news out of China and was poised to end the week on a positive note, with the key S&P/ASX 200index up 0.9% in the last hour of trade.

Trading around 4,320, the index was at almost exactly the same level as its pre-Easter close, in a shortened four-day trading week.

Gains were widespread on the ASX, with share-price increases in almost all sectors. Only the telecom and utility sectors missed out, the former because of a weak performance from Telstra and most of the utility sector showing either losses or small gains.

The materials sector led the gains, with a 1.7% advance. Market heavyweights BHP Billiton and Rio Tintowere up 0.5% and 1.6%, respectively, with only three of the index components in the red.

Read more at MSNBC

NEW YORK (AP) — A growing belief that the U.S. economy may be headed toward recession gave the stock market its fourth straight week of losses.

The anxiety in the market was obvious Friday as the major indexes went from moderate gains early in the day to another sharp loss. The Dow Jones industrial average had its 10th move of more than 100 points in 15 trading days this month.

"We just don’t know whether we’re going to have a recession," said John Burke, head of Burke Financial Strategies.

There was little news to help investors determine their next moves. However, JPMorgan Chase & Co. joined other financial firms and cut its forecast for economic growth during the fourth quarter. It’s now predicting growth at annual rate of just 1 percent, down from an earlier forecast of 2.5 percent. That added to the recession fears.

Investors disliked the news late Thursday that Hewlett-Packard Co. is planning to exit most of its consumer businesses, including PCs. HP fell 20 percent to a six-year low. HP plans to transform itself into a company that caters to corporations.

After the market rose early, some investors sold in case bad news comes out of Europe over the weekend. European investors were also cautious — banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily indebted governments.

"These things usually break out over the weekend and then you have a mad dash Monday to react to them," said Mike McGervey, the head of McGervey Wealth Management.

The drop late in the day recalled the 2008 financial crisis. Then, many investors stepped up their selling in the afternoon out of fears about news that might break overnight — or on weekends. Lehman Brothers failed on Sunday, Sept. 15. The government took over mortgage companies Fannie Mae and Freddie Mac the previous weekend.

The Dow lost 172.93, or 1.6 percent, and closed at 10,817.65. It was down 4 percent for the week. Since July 21 — four weeks and one day — the Dow is down 15 percent.

Companies that rely on an expanding economy for higher revenue fell. Caterpillar Inc., International Business Machines and Alcoa Inc. each fell more than 2 percent.

The Standard & Poor’s 500 stock index fell 17.12, or 1.5 percent, to 1,123.53. It was down 4.7 percent for the week. All 10 industry groups that make up the index fell.

The Nasdaq composite fell 38.59, or 1.6 percent, to 2,341.84. It was down 6.6 percent for the week.

Although stocks fell, investors did not continue pushing the price of Treasurys, as they have the last three weeks. The yield on the benchmark 10-year Treasury note was almost unchanged at 2.07 percent, compared with late Thursday’s 2.06 percent. It had been up to 2.11 percent earlier in the day. The yield fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher.

Investors began the week confident after last week’s volatility, the worst the market has had since the 2008 financial crisis. The Dow rose nearly 215 points on Monday when Google, Time Warner Cable and Cargill were among companies announcing multi-billion deals. The market remained relatively calm the next two days. But on Thursday, a stream of bad economic news in the U.S. combined with worries about Europe’s debt problems and sent the Dow plunging 419 points.

Since July 21, the market has gone from one crisis to another, and the weakening U.S. economy has been at the heart of the selling. In late July, the concern was the debt debate going on in Washington. In early August, it was the downgrade of the U.S. debt rating by Standard & Poor’s. Since then, worries about the impact of the downgrade have faded, and growing evidence that the economy is slowing has driven stocks down.

Signs of a slower economy around the world have only made investors more pessimistic about the U.S. Earlier this week, Germany said its economy grew just 0.1 percent in the second quarter. And Germany is the strongest economy in Europe.

Stocks fell Thursday on news of another drop in home sales, weaker manufacturing in the mid-Atlantic states and an increase in the number of people who applied for unemployment benefits.

The stock market tends to reflect the expectations that investors have for the economy and company earnings six to nine months in the future. So traders are interpreting the numbers they’re seeing as part of a slide in the economy that will continue for some time.

financial crisis

NEW YORK (AP) — Just when Wall Street seemed to have settled down, a barrage of bad economic reports collided with fresh worries about European banks Thursday and triggered a global sell-off in stocks.

The Dow Jones industrial average fell 419 points — a return to the wild swings that gripped the stock market last week.

Stocks were only part of a dramatic day across the financial markets. The price of oil fell more than $5, gold set another record, the government’s 10-year Treasury note hit its lowest yield, and the average mortgage rate fell to its lowest in at least 40 years.

The selling began in Asia, where Japanese exports fell for a fifth straight month, and continued in Europe, where bank stocks were hammered because of worries about debt problems there, which have proved hard to contain.

On Wall Street, the losses wiped out much of the roughly 700 points that the Dow had gained over five days. Some investors who bought in the middle of last week decided to sell after they were confronted with a raft of bad news about the economy:

— More people joined the unemployment line last week than at any time in the past month. The number of people filing claims for unemployment benefits rose to 408,000, or 9,000 more than the week before.

— Inflation at the consumer level in July was the highest since March. More expensive gas, food, clothes and other necessities are squeezing household budgets at a time when most people aren’t getting raises.

— Sales of previously occupied homes fell in July for the third time in four months — more trouble for a housing market that can’t seem to turn itself around. This year is on pace to be the worst since 1997 for home sales.

— Manufacturing has sharply weakened in the mid-Atlantic states, according to a report from the Federal Reserve. Manufacturing has been one of the strongest parts of the economy since the recession ended in 2009, but its growth has slowed this year.

The manufacturing news was especially bleak on an already bad day, said Dan Greenhaus, chief global strategist at brokerage BTIG. He called the Fed report “an atrocious set of numbers.”

"That really set the market on its head," he said.

Wall Street and other financial markets have wrestled for several weeks with fears that a new recession might be in the offing. Morgan Stanley economists said in a report Thursday that the U.S. and Europe are “dangerously close to recession.”

"It won’t take much in the form of additional shocks to tip the balance," they wrote.

Worries about European debt also hang over the market. A default by any country would hurt the European banks that hold its bonds, plus American banks that have lent to their European counterparts.

Renewing the fears, The Wall Street Journal reported Thursday that U.S. regulators are looking at the U.S. arms of big European banks to make sure they have enough money for day-to-day operations.

"I don’t want to pretend that the market knows what it’s thinking about too much," said David Kelly, chief market strategist at JPMorgan Funds. "We live in an environment of sell now and ask questions later."

Asian markets started Thursday’s drop. Japan’s Nikkei 225 index fell 1.3 percent. The main stock indexes in South Korea and India each dropped a little more, then Europe more than that — 4.5 percent in Britain and 5.8 percent in Germany.

stock market

— Corn futures are called to open 1 cent to 3 cents a bushel higher on the Chicago Board of Trade on speculation that the hottest July weather since 1955 in parts of the U.S. Midwest damaged yields more than the government estimated last week, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview.

— Soybean futures may open 4 cents to 6 cents a bushel higher in Chicago on speculation that rain this week will miss fields in parts of the central and northwestern Midwest, increasing stress on plants, Gerlach said. Soybean-oil futures are expected to open up 0.15 cent to 0.25 cent a pound, and soybean-meal futures may open 50 cents to $1.50 higher per 2,000 pounds.

— Wheat futures may open 4 cents to 6 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that wet weather during the U.S. planting season and unusually high temperatures in July will curb output in the northern Great Plains, Gerlach said.

commodities

— U.S. stocks climbed as commodities rose and Target Corp. and Staples Inc. earnings beat estimates. The franc gained after the Swiss National Bank refrained from pegging the currency to the euro or adopting a target. {NSN LQ2R456VDKHW <GO>}

— Wholesale costs in the U.S. rose more than forecast in July, led by higher prices for tobacco, trucks and pharmaceuticals, showing declines in commodity expenses have yet to filter to other goods. {NSN LQ2OLX0D9L35 <GO>}

— The latest Franco-German strategy to counter the euro debt crisis stressed ideas already in the works, shunning bolder steps that investors were seeking to calm markets. {NSN LQ2K5O07SXKX <GO>}

— The European Commission said it will draw up proposals for a financial transactions tax in the 27-nation European Union before a summit of world leaders in November, backing calls by French President Nicolas Sarkozy and German Chancellor Angela Merkel for the levy. {NSN LQ2MXM07SXKX <GO>}

— The franc strengthened after the Swiss central bank stopped short of announcing a target rate or temporary peg to the euro in its third attempt in as many weeks to drive down the currency. {NSN LQ2EYM1A1I4H <GO>}

— Companies are paying the most to borrow relative to benchmark government debt since September 2009 as investors shun all but the safest securities on concern that the biggest economies are faltering. {NSN LQ2FI20D9L35 <GO>}

— Commodity markets are being driven by the “severe tension” between investors’ expectations for supply shortages and economic-growth concerns, Barclays Capital said. {NSN LQ29DV1A74E9 <GO>}

— Commodities that were sold off by speculators on futures exchanges are still finding buyers who need raw materials to make phones, cars and washing machines. {NSN LQ2KV01A1I4H <GO>}

— Deere & Co., the world’s largest farm-equipment maker, posted third-quarter profit that topped analysts’ estimates and raised its full-year earnings forecast as global demand improved. {NSN LQ2KKW6VDKHU <GO>}

— Crude oil climbed to the highest in almost two weeks as a report showed U.S. gasoline inventories fell as consumption of the motor fuel increased. {NSN LQ2QFL6VDKHV <GO>}

— Prices in the $150 billion fertilizer market are lagging behind gains in food costs, providing farmers another incentive to boost production as grains and oilseeds advance. {NSN LQ2HKG0UQVI9 <GO>}

— India may consider allowing additional rice exports, Food Minister K.V. Thomas said. {NSN LQ27I86JTSE8 <GO>}

— India aims to pour $60 billion into ports by 2020 under a drive to spur the fastest growth in more than two decades and ease bottlenecks stoking the highest inflation among major economies. {NSN LQ1AGJ6K50YZ <GO>}

— Drought conditions in parts of China will have a limited impact on the autumn grain harvest, the Ministry of Agriculture said. {NSN LQ1XTZ6TTDS1 <GO>}

— Yingluck Shinawatra became Thailand’s first female prime minister by pledging to lift rural incomes through higher rice prices. The rest of Asia may now have to pay for her campaign promise. {NSN LQ2D4J6TTDSB <GO>}

— Palm-oil futures in Kuala Lumpur climbed on speculation that a drop in output this month in Malaysia and Indonesia may lower stockpiles amid a surge in exports. {NSN LQ2JCJ6JTSE8 <GO>}

— U.S. feedlots probably increased cattle purchases in July by the most this year as a record drought in the southern Great Plains dried up pastures, forcing farmers to sell livestock sooner than normal, analysts said. {NSN LQ1JZ06VDKHT <GO>}

— Syria is seeking to buy 100,000 metric tons of soft wheat from all origins. {NSN LQ2P3C6JIJUO <GO>}

— A second year of drought in Russia’s Siberian Altai region may reduce the local grain crop by 13 percent to 3.5 million tons this year. {NSN LQ2KDA07SXKX <GO>}

— SABMiller Plc will take its A$9.5 billion ($10 billion) bid for Foster’s Group Ltd. directly to shareholders, going hostile after the board rejected the price as too low. {NSN LQ2L770UQVI9 <GO>}

Greece’s income producing assets privatized and sold cheaply for the wealth confiscating banks.

Israel Chemicals Ltd. (ICL), which harvests minerals from the Dead Sea to make fertilizer, said second-quarter profit jumped 44 percent on higher potash and phosphate prices.

Net income rose to $426 million from $298 million a year earlier, ICL said in a PR Newswire statement today. Sales climbed 27 percent to $1.9 billion, beating analyst estimates, after the company consolidated results of two businesses it acquired in the first quarter, ICL said. The median sales estimate for the three-month period of five analysts surveyed by Bloomberg was $1.7 billion.

“They beat our expectations across the board,” said Joseph Wolf, equity analyst at Barclays Capital in Tel Aviv. Wolf said he expected the company to show strong results in the second half of the year on Indian and Chinese contracts and “in the absence of any real global macroeconomic issues.” Wolf, who spoke by phone, rates ICL “overweight.”

Potash producers are operating at or near record levels to keep pace with demand as surging crop prices spur farmers to use more fertilizer, Potash Corp. of Saskatchewan Inc. said in a July 28 report. ICL trades at 12 times estimated 2011 earnings, compared with a peer average of 13 times for 12 companies listed by Bloomberg.

dead sea minig

Petrovietnam Fertilizer & Chemical Joint-Stock Co. (DPM VN), the country’s biggest fertilizer producer, rose 2.6 percent to 32,000 dong, the largest increase since July 20. Net profit rose 62 percent to 821.4 billion dong in the second quarter, according to a statement on the company’s website. First-half profit increased 60 percent to 1.44 trillion dong.