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Trade Update: Fertilizer Stocks

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Fertilizer company Mosaic (MOS) on phosphate outlook:

In Q1, Chinese export actually were reduced 70%, 70 percent, which was 1 million tonnes reduction. What does mean to the market? At the end of the spring season in northern hemisphere market, the major market ended the season with a very low inventory. For India, the inventory at the end of March was down by 28% year-over-year, which is 800,000 tonnes lower than the last year, which was already low. In Brazil, the inventory level was down by 30%, which is 700,000 tonnes year-over-year. So all this very low inventory in the major market are portending a very strong pent-up demand for the rest of the year. So I just want to add that data point on the phosphate market.

Source: Q1 2024 earnings call.

The fertilizer trade has taken time, but Nutrien (NTR) finally took off earlier this month and the other stocks seem to have put the lows behind them. I'm happy with my position in ag futures, Nutrien, and my recently added OCI trade. I tried bottom fishing Mosaic after I got stopped out earlier, and I'll likely target a half position if it can get above $31.61, but avoid re-entering Yara and CF Industries. In any sector trade, I want to find the strongest stocks - my target is a higher IRR, not a higher % gain on any individual trade.

Mosaic (MOS) went above my buy alert, currently at $31.74. Pierced the 50 DMA and 100 DMA in a single candle.

CF Industries (CF) has come out strong. Especially interesting to see fertilizers moving on a down day for commodities.

New buy: European fertilizer company (OCI.AS)

OCI is a past pick of mine, which I wrote about on Twitter/X.

The company has come out of its long consolidation since January and moved above the 50 and 100 DMA. My buy alert was triggered 21st May 2024.

Good Trading!


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