Fertilizer Update: Weekly Prices for the Week Ended April 29
Fertilizer Update: Weekly Prices for the Week Ended April 29
Weekly update
In the week ended April 29, 2016, the S&P 500 (SPY) fell by 1.1%, continuing its previous week’s streak. The overall week was negative for fertilizer producers. The exceptions were CVR Partners (UAN), which recorded a gain of 14.5%, and Intrepid Potash (IPI), which recorded a gain of 6.7% during the week.
The Market Vectors Agribusiness ETF (MOO), which invests a third of its portfolio in the agricultural chemicals sector, was up slightly by 30 basis points.
Earnings season begins
During the week ended April 29, Terra Nitrogen (TNH) was down the most among fertilizer producers, losing as much as 2.3% of its value during the week.
Israel Chemicals (ICL) lost 1.8% and The Mosaic Company (MOS) lost 1% of its value during the week. CF Industries (CF) and Agrium (AGU) each saw its share price decline by 0.3% during the previous week.
PotashCorp’s earnings
One of the biggest agricultural producers, PotashCorp (POT) reported its earnings on April 28. The company reported $0.15 per share, which missed analysts’ estimates of $0.16 per share. The company’s stock saw a 3% decline following the earnings and was 0.4% down at the end of the week.
During the earnings call, PotashCorp’s CEO, Jochen Tilk, noted, “Price pressure across all three nutrients was a key contributor to weaker first quarter earnings.” This will likely impact other fertilizer producers mentioned above.
Series overview
Because fertilizer prices constitute the biggest factor impacting the performance of fertilizer companies, investors must track fertilizer prices regularly. In this series, we’ll see how the prices of NPK (nitrogen, phosphorous, and potassium) and raw materials changed in the week ended April 29.
Let’s start with ammonia, one of the key products for nitrogen and phosphate fertilizers.
Browse this series on Market Realist: