DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. 29 April 2019Americas/United StatesEquity ResearchFertilizers Agricultural Sciences Sector QUARTERLYResearch AnalystsChristopher S. Parkinson212 538 6286christopher.parkinson@credit-suisse.comChris Counihan44 20 7883 7618chris.counihan@credit-suisse.comVictor Saragiotto55 11 3701 6303victor.saragiotto@credit-suisse.comAmanda Foo603 2723 2089amanda.foo@credit-suisse.comGraeme Welds212 538 8463graeme.m.welds@credit-suisse.comIan Miller55 11 3701 6336ian.miller@credit-suisse.comKieran de Brun212 538 3440kieran.debrun@credit-suisse.comHarris Fein212 538 3064harris.fein@credit-suisse.comNA Seasonality Doesn't Justify Bullishness…■Awaiting US / China Trade Catalysts, Global Ag Sentiment Mixed: As we head into 2H19, the key catalyst for the ag world remains a US / China trade agreement. The consensus view remains that any announcement will be a positive. We concede the headline will be constructive for global ag markets, but stress substance (or lack thereof) is what's material in the long run. The composition of the publicized ~$30bln increase in cross-border trade should be the focus, specifically anything in relation to soy, coarse grains, ethanol and proteins. In our view, US farmers will eventually be better off (off of a relatively low base), but investors need to be nimble on playing the theme. We favor FMC and/or Corteva (at lower levels), but acknowledge CF will likely gain momentum on the positive headline news flow. On the latter, N is comfortably supplied well into '20 / '21 (even w/ a material demand boost), rendering our neutral view unchanged. From our US Food Team's perspective, the best way to invest in the catalyst is TSN.■African Swine Flu Spreading, But Feed Inflection Awaits in '20: It's our view investors are underestimating the effects of AFS, which will likely drag on Asian feed demand into the 2H. US protein farmers are reaping benefits in the interim due to higher hog / poultry prices, a key stabilizing force to offset regional sluggishness. AFS is already a NT negative, but an eventual containment of the issue will lead to a "snap back" in global feed demand as we head into '20 (requires ~6 months to raise a hog). Bottom line, AFS will continue to mute soy / meal prices into 2H19, but an eventual reversal will likely lead to substantial feed demand, a constructive set-up for '20. ■Spring N Price Rally to Plateau, Still Plenty of Supply Availability: The well anticipated N price seasonality appears to be materializing, as NOLA volumes appear to be "flowing-through" right up river to the Midwest. As the fert group traditionally trades on NT price action, we're not surprised to see recent rallies materialize in N names. We caution recent moves are likely to be short lived as supply availability remains ample in both N&P, while K appears stable until at least Fall (CSe modest EuroChem ramps). On the N front, more than ample global supply availability exists in the $260/t-290/t range, placing a "ceiling" on prices – we cite trade in ammonia and UAN will remain challenging well into 2H19. Turning to global P prices, we argue Chinese DAP FOB prices in the ~$375/t range will be the norm for the NT and stress there is still ample supply to meet stable demand (curtailments only limit further "sloppiness"); we still fail to see a cogent argument for a price deck >$400/t Tampa in the intermediate term. Global K price stability should continue into 2H19, but we're paying close attention to demand and impending EuroChem ramps (Usolskiy on track, Volgakaliy a '20 theme).■New Estimates: FMC ('19 EPS $5.75, TP $96), MOS ('19 EPS $2.15 TP $30), NTR ('19 EPS $2.85, TP $56), and CF ('19 EPS $2.00, TP $45). Risks include: weather, FX, and raw materials.29 April 2019Agricultural Sciences Sector2Table of contentsGlobal Nitrogen Overview7Global Potash Overview15Global Phosphates Overview19Asia Palm Oil Sector23Global Soft Commodity Overview27Global FX Overview28Recommended Reading30CS Global Agriculture Team31CF Industries Holding Inc. (CF)32Mosaic Co. (MOS)34Nutrien Ltd. (NTR)36FMC Corporation (FMC)3829 April 2019Agricultural Sciences Sector3Figure 1: Summary of Estimate ChangesEPS EstimatesPrev. EstimatesFY19FY20FY19FY20NTR$56$55$2.85$3.00$2.95$2.95We see stable potash pricing until 2H19/20 when headwinds should begin to mount. Nitrogen pricing will likely be volatile again in '19 but capital deployment remains key optionality.MOS$30--$2.15$2.15$2.15$2.26Risks to P pricing are ample in '19 as new capacity ramps in M...
发表评论取消回复