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Pressure from potash pricing. Are you a buyer here?
i guess not... lol, what happened to MOS here?
maybe CF is good
Want a broader perspective.. read this closely
http://www.earningsimpact.com/Transcript/81932/MOS/The-Mosaic-Company---Q4-2013-Earnings-Call
Potash makers getting creamed after lowered price outlook
July 30, 2013, 8:07 AM
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Shutterstock
It’s shaping up to be a pretty ugly day for potash makers. On both sides of the Atlantic, companies are getting creamed with double-digit losses after Uralkali URALL , one of the world’s largest potash producers, cut its outlook for prices this year. The Russian company says it now expects increased competition, which could add pressure to prices, to the extent they’re likely to fall to $300 a ton by the end of the year — a drop of around 25%.
While potash isn’t something most people come across in everyday life, it’s an important component in crop fertilizers.
That prediction wasn’t taken lightly by investors, who responded by heavily selling anything with a potash tag on it. Shares of Uralkali itself sank 23%, Germany’s K+S DE:SDF -21.64% tanked 24% and ICL-Israel Chemicals slid 18%.
The downward dip rolled over U.S. potash businesses too. In U.S. premarket trade, shares of Mosaic MOS -26.48% slumped 23%, Agrium AGU -7.03% lost 13%, while Canada’s Potash Corp. of Saskatchewan POT -23.35% dropped a whopping 24%.
- Sara Sjolin
- Follow Sara on @sarasjolin
- Follow The Tell blog on @thetellblog
UPDATE 2-Russia's Uralkali quits top potash cartel, sees global price fall
Tue Jul 30, 2013 4:30am EDT
* Uralkali pulls out of Belarus venture after "deadlock"
* Leaves Canpotex as world's top potash exporter
* Expects prices to fall to $300 a tonne from $400 a tonne
* Uralkali's shares plunge 15 pct
By Polina Devitt and Natalia Shurmina
MOSCOW, July 30 (Reuters) - Russia's Uralkali has dismantled one of the world's largest potash partnerships by pulling out of a venture with its partner in Belarus, a move it expects will cause global prices to plunge by 25 percent.
The break-up of the Belarus Potash Company (BPC) leaves North America's Canpotex as the ruling potash export venture. BPC and Canpotex had accounted for 70 percent of global trade in potash, an important ingredient for fertilizer, and the duopoly had set identical prices in key markets such as China and India.
Uralkali said it was pulling out after reaching "deadlock" over sales and would export all potash via its Swiss-based Uralkali Trading.
The decision may lead to a fall in the global potash price to below $300 per tonne in the second half of 2013, from the current $400 per tonne, it said. Lower fertilizer prices could result in rising demand from price-sensitive farmers in Asia.
Shares of Uralkali plunged 15 percent. Rival fertilizer firms also fell, with Germany's K+S down nearly 16 percent.
Uralkali and Belarus potash maker Belaruskali were partners for eight years in BPC, which accounts for 43 percent of the global potash export market. Uralkali said it had left the venture because Belaruskali made a number of key fertilizer ingredient deliveries outside the partnership.
The break-up of the venture means Belaruskali can now sell its potash at a discount, said Dmitry Ryzhkov, equity sales trader at Renaissance Capital.
"It is as if Saudi Arabia decided to leave OPEC - oil prices would fall immediately," Ryzhkov said.
It leaves the Canpotex partnership - which unites Potash Corp of Saskatchewan, Agrium and Mosaic - as the world's largest potash exporter.
The duopoly had also been threatened by miner BHP Billiton's plans for an 8-million-tonne-per-year mine in western Canada, which would be the world's largest potash mine if it opens as scheduled in 2017.
Potash enhances water retention of plants, and increases crop yields.
DEADLOCK
Uralkali chief executive Vladislav Baumgertner said in a statement the partners had reached an unfortunate "deadlock".
The company will now focus on increasing sales.
"In the near future we expect (global) competition to become stronger - that will push prices down," Baumgertner told reporters in a conference call on Tuesday.
"This decision came as a surprise for us," a top manager of Belaruskali, who asked not to be identified, said.
Belaruskali declined official comment. Uralkali's CEO said the company had informed Belaruskali verbally on Monday and then formally on Tuesday. BPC was not available for immediate comment.
Uralkali plans to boost its potash sales to 13 million tonnes in 2014 and 14 million tonnes in 2015 from 10.5 million tonnes in 2013, Baumgertner said. The company will try to expand its market share in China, India and Brazil.
It has concluded an option agreement with CNAMPGC, a major Chinese fertiliser importer, on potash supply, Uralkali said. This would aim to supply 500,000 tonnes of potash to China by the end of 2013.
Uralkali said it hopes that increase in sales volumes would compensate for the expected fall in the potash price, allowing it to keep its current dividend policy.
The company expects its shares and those of other producers to be volatile in the near future and has decided to freeze its current buy-back programme, the CEO added.
Potash, Mosaic sink after Uralkali stops sales through Belarusian
Russia’s Uralkali, one of the world’s largest potash producers, said this morning that its board has decided to stop its export sales through Belarusian Potash Company and direct all export volumes through Uralkali Trading.
The company said, "Unfortunately, we should state that our cooperation with our Belarusian partners within BPC framework has come to a deadlock. It has always been Uralkali’s position that export activities of both producers should go through the unified sales network. This fundamental principle of partnership was violated by the Decree No.566 issued by the Belarusian President on 22 December 2012, which cancelled the exclusive right of BPC to export Belarusian potash. Following the issue of the Decree, Belaruskali has made a number of deliveries outside BPC."
Uralkali expects global potash prices to drop below $300 a ton following the changes to its trading policy, Bloomberg reported, citing comments from CEO Vladislav Baumgertner on a phone call. Shares of Potash (POT) and Mosaic (MOS) are trading significantly lower in pre-market trading following the news, while Agrium (AGU) and CF Industries (CF) are down as well.
Is now the time to start buying shares of the ag fertz? MOS did beat on rev estimates.
Q4 2013 Earnings Call transcript
Coming up here
http://www.earningsimpact.com/
I knew you were right, im always here
If I weren't so tied up elsewhere I'd get some here.
I think MOS is going to go way up. Just look at my recent posts here...
Hey Ill,
Do you think $MOS's PPS will drop a bit ex dividen? What might b a good point to write some June call option? I am thinking $65 strike price for June call. What does the chart tell you?
$MOS bull flag pattern...
$MOS big wedge pattern...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=87197856
$MOS great bullish signal... ready to BOOOOOOM
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=87288276
IIIIIIIIVERSON!!!!!!!!!!!!!!!!!
$MOS looks good to go, BREAKING OUT today, with volume. The way I see it, short term this is breaking out of the bull flag going back to late 2012. Also longer term, the stock is breaking out of a very large and heavily consolidated wedge pattern.Together making one BIG BASE for BOOOOOM BOOOOOOOOOM!
Again... Thanks for your insight/analysis on the whole Ag sector.
Here are the charts I am looking at...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86671172
PS... This is the icing on the cake, IMO...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=87288276
IIIIIIIIIVERSON!
$MOS, III think it's time to...
$MOS starting to BOOOM... Big pattern on $MOS charts, BREAKOUT coming, IMO. I am loaded on call options. Here are the $MOS charts.... http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86671172
Here is the Major $MOS pattern.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86712552
Yea, Karin, I bought a bunch of May $65s the other day. I think $MOS could easily get over $70 in the short term (if not $100!) on this breakout.
Best of luck and blessings!
IIIIIIVERSON
Oh, I had been reading one of the charts wrong and didn't realize it was for a longer term. Scratch what I said a bit ago.
I'm toying with options for this.
That sure was a nice run from 37 to 63. I missed it since I haven't been watching it these days.
Mosaic Announces Third Quarter Fiscal Year 2013 Earnings Release And Conference Call
Date : 03/11/2013 @ 4:00PM
Source : PR Newswire (US)
Stock : Mosaic Company (The) (MOS)
Quote : 61.5 1.28 (2.13%) @ 8:00PM
Mosaic Announces Third Quarter Fiscal Year 2013 Earnings Release And Conference Call
Mosaic (NYSE:MOS)
Today : Monday 11 March 2013
PLYMOUTH, Minn., March 11, 2013 /PRNewswire/ -- The Mosaic Company (NYSE: MOS) plans to release third quarter fiscal year 2013 earnings results on Thursday, March 28, 2013, before the market opening of the New York Stock Exchange.
Mosaic expects to release the results at approximately 7:00 a.m. Eastern Daylight Time (6:00 a.m. Central Daylight Time), simultaneously posting performance data on its website in a tabular form. Historical performance data for Mosaic's past eight quarters is currently available at www.mosaicco.com/investor/financialdata.
The Company will host a conference call to discuss the results also on Thursday, March 28, 2013, beginning at 9:00 a.m. Eastern Daylight Time (8:00 a.m. Central Daylight Time).
A webcast of the conference call including the presentation slides can be accessed by visiting Mosaic's website. An audio replay of the call will be available up to one year from the time of the earnings call.
The Mosaic Company Wins 2013 Excellence Award In Corporate Philanthropy
It's been a strong mover.
Mosaic is still a buy. The company has a lot of catalysts this spring; perhaps a major buyback and or buyout will come then which is why Goldman Sachs, a great firm, is so favorable on the company...
MOS 2Q earnings 1-04-13 BMO
Mosaic Announces Second Quarter Fiscal Year 2013 Earnings Release And Conference Call
PLYMOUTH, Minn., Dec. 12, 2012 /PRNewswire/ -- The Mosaic Company (NYSE: MOS) plans to release second quarter fiscal year 2013 earnings results on Friday, January 4, 2013, before the market opening of the New York Stock Exchange.
Mosaic expects to release the results at approximately 7:00 a.m. Eastern Standard Time (6:00 a.m. Central Standard Time), simultaneously posting performance data on its website in a tabular form. Historical performance data for Mosaic's past eight quarters is currently available at www.mosaicco.com/investor/financialdata.
The Company will also host a conference call to discuss the results on Friday, January 4, 2013, beginning at 9:00 a.m. Eastern Standard Time (8:00 a.m. Central Standard Time).
Atlantic Equities Upgrades Mosaic (MOS) to Overweight
http://www.streetinsider.com/Upgrades/Atlantic+Equities+Upgrades+Mosaic+%28MOS%29+to+Overweight/7901194.html
Atlantic Equities upgraded Mosaic (NYSE: MOS) from Neutral to Overweight with a $63 price target (up from $58).
Mosaic Updates Fiscal Second Quarter 2013 Guidance
Wednesday 14 November 2012
PLYMOUTH, Minn., Nov. 13, 2012 /PRNewswire/ -- In advance of upcoming investor conferences, The Mosaic Company (NYSE: MOS) announced today an update of the near-term price and volume guidance, as well as an update of the Company's full year effective tax rate guidance.
Since the Company announced its fiscal second quarter guidance on October 2, 2012, international crop nutrient market demand has weakened, primarily as a result of distributors delaying purchases to avoid price risk. The Company believes this demand is simply delayed, but that sales volumes may not pick up until calendar 2013.
"The long-term positive outlook for crop nutrient demand has not changed; high commodity prices are driving record farm returns and making our products more affordable than ever before. These strong fundamentals are expected to drive record global phosphate and potash shipments in calendar 2013," said Jim Prokopanko, President and Chief Executive Officer. "In the short term, however, we are seeing lower than expected shipments to the export market, in spite of very strong demand in North America for the fall application season. As a result, we have lowered our volume guidance for both the Phosphates and Potash segments in the second fiscal quarter of 2013 while also tightening the price forecasts to the upper end of the previously announced ranges."
In potash, the delay in signing long-term supply contracts with China and India has resulted in weakening price expectations, leading other international buyers to delay purchases to avoid price risk. The midpoint of the Company's previous guidance for second quarter potash volumes of 1.6 to 1.9 million tonnes already excluded shipments to China and India. The current guidance range of 1.3 to 1.4 million tonnes reflects lower near-term demand in other international countries as well. In part because of the decline in international shipments and changes in product mix, our realized price expectations are now at the high end of the prior range, at $435 to $450 per tonne.
In phosphates, international distributors' cautious sentiment with respect to potash is spilling over as buyers are avoiding phosphate price risk, and delaying purchases in spite of low reported producer inventories. The Company has lowered second quarter volume guidance to 2.9 to 3.1 million tonnes from 3.0 to 3.4 million tonnes. Realized prices are expected to be in the upper end of the prior range, at $535 to $550 per tonne.
Additionally, the Company will decrease the amount of unrecognized tax benefits reported on the balance sheet by approximately $200 million in the second fiscal quarter, due to the resolution of tax audit activity. As a result, the Company now expects its effective tax rate for full year fiscal 2013 to be in the mid-teens, including the impact of this benefit, and in the mid 20 percent range for the second half of fiscal 2013.
The Company continues to expect the gross margin rate for phosphates to be approximately flat with the first fiscal quarter. Assuming no benefit from foreign exchange in the potash segment cost of goods sold, low operating rates will continue to pressure the gross margin rate in the second quarter, currently expected to be in the low to mid 40 percent range.
All other guidance is unchanged.
Larry Stranghoener, Mosaic's Executive Vice President and Chief Financial Officer, will discuss the updated guidance and other items when he presents at the Dahlman Rose & Co. Global Metals, Mining & Materials Conference in New York City on Wednesday, November 14, at 9:20 a.m. Eastern Standard Time. The presentation will also be webcast on Mosaic's website at www.mosaicco.com/investors.
Mosaic To Present At Upcoming Investor Conferences
Date : 11/01/2012 @ 4:45PM
Source : PR Newswire (US)
Stock : Mosaic Company (The) (MOS)
Quote : 52.77 -0.36 (-0.68%) @ 10:44AM
Mosaic To Present At Upcoming Investor Conferences
Mosaic (NYSE:MOS)
Today : Friday 2 November 2012
PLYMOUTH, Minn., Nov. 1, 2012 /PRNewswire/ -- The Mosaic Company (NYSE: MOS) has announced it will participate in upcoming conferences in November.
Larry Stranghoener, Mosaic's Executive Vice President and Chief Financial Officer, will present at the Dahlman Rose & Co. Global Metals, Mining & Materials Conference in New York City on Wednesday, November 14, at 9:20 a.m. Eastern Standard Time.
On Thursday, November 15, at 8:00 a.m. Eastern Standard Time, Jim Prokopanko, Mosaic's President and Chief Executive Officer will speak at the Morgan Stanley Global Chemicals Conference in Boston.
Both presentations will be webcast at the time of the presentation and will be available on the Company's website at www.mosaicco.com/investors. Questions can be directed to Mosaic's Investor Relations Department via e-mail to investor@mosaicco.com.
And this afternoon, the houses all reiterate their stance, hmmmmmmm...what gives?
Interesting chart here. Gap filled from July and 200 dma at 54.4. Lightning Round is bothersome (he just annoys me), but the department of ag reports suggest this sector is the place to be. 5 houses came out with 'maintain' ratings this morning. Like they're a lot of help! Can it drop another 10 points? Sure, why not. Watching!
MOS: Q1 EPS $1.01 vs $1.17 Misses $1.15 Est
Tuesday , October 02, 2012 08:03ET
QUARTER RESULTS
Mosaic Company (The) (MOS) reported Q1 results ended August 2012. Q1 Revenues were $2,505.10M; -18.75% vs yr-ago; MISSING revenue consensus by -6.58%. Q1 EPS was $1.01; -13.68% vs yr-ago; MISSING earnings consensus by -12.17%.
Q1 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $2,505.10M $3,083.30M -18.75% $2,681.53M -6.58%
---------- ------------ ------------ ---------- ------------ ----------
EPS: $1.01 $1.17 -13.68% $1.15 -12.17%
---------- ------------ ------------ ---------- ------------ ----------
The Mosaic Company Reports First Quarter Fiscal 2013 Results
Tuesday , October 02, 2012 07:00ET
PLYMOUTH, Minn., Oct. 2, 2012 /PRNewswire/ -- The Mosaic Company (NYSE: MOS) reported first quarter fiscal 2013 net earnings of $429 million, compared to $526 million a year ago. Earnings per diluted share were $1.01 in the quarter compared to $1.17 last year. The year-over-year decline was primarily driven by lower phosphate volumes and prices. In the first quarter of 2013, earnings per diluted share were negatively impacted by notable items totaling $0.02. Mosaic's net sales in the first quarter of fiscal 2013 were $2.5 billion, down from $3.1 billion last year also primarily driven by lower phosphate volumes and prices.
"The long-term outlook for crop nutrition is outstanding, and Mosaic is well positioned as the world's largest potash and phosphates producer," said Jim Prokopanko, President and Chief Executive Officer of Mosaic. "Drought and other weather-related issues in several of the world's key agricultural regions severely impacted this year's corn, soybean and wheat crops and provided a vivid reminder of just how tenuous global food security is. Our products are essential in helping the world grow the food it needs."
Mosaic's gross margin for the first quarter of fiscal 2013 was $747 million, or 30 percent of net sales, compared to $848 million, or 28 percent of net sales, a year ago. First quarter operating earnings were $610 million, a decrease of 16 percent compared to $730 million a year ago. The decreases in gross margin and operating earnings were primarily driven by lower phosphate net sales. Cash flow provided by operating activities in the first quarter of fiscal 2013 was $339 million compared to $554 million in the prior year. Cash flow in the current quarter was negatively impacted by higher inventories and a sequential decline in customer prepayments. Capital expenditures totaled $449 million in the quarter. Mosaic's total cash and cash equivalents were $3.6 billion and long-term debt was $1.0 billion as of August 31, 2012.
Quarterly Business Highlights
-- Potash expansion projects continue to be on time and on budget with
expenditures of $158 million in the quarter.
-- Mosaic achieved a record low quarterly recordable injury frequency rate
during the quarter, continuing to build upon the improvements made last
year.
-- Mosaic ramped up production at South Fort Meade to full capacity,
replenished phosphate rock inventory and plans to resume shipping rock
to its facilities in Louisiana in the second fiscal quarter.
-- The Company made substantial operational improvements related to water
use at the Riverview phosphates plant, avoiding a planned $50 million
capital improvement in a reverse osmosis water treatment plant, which
resulted in a $7 million write off of investments to date.
-- The Company has committed additional capital to continue the feasibility
work to expand the Company's ammonia production capacity.
-- Mosaic launched "Pursuit of 300(SM):The Road To Higher Yields", a
program that uses farmers' real-world experiences as a launch pad for
agronomists, researchers, retailers and industry stakeholders to create
the next generation of cropping systems.
Phosphates
Phosphates Results 1Q FY13 Actual 1Q FY13 Guidance
AverageDAPselling price $529 $510 to $535
Sales volume 2.7 million tonnes 2.5 to 2.8 million tonnes
Processed phosphate production 81% of operational capacity 75%+ of operational capacity
Potash Results 1Q FY13 Actual 1Q FY13 Guidance
Average MOP selling price $444 $415 to $440
Sales volume 1.9 million tonnes 1.8 to 2.2 million tonnes
Potash production 65% of operational capacity 70+% of operational capacity
MOS 1Q/FY earnings 10-2-12 BMO
Mosaic Announces First Quarter Fiscal Year 2013 Earnings Release And Conference Call
Mosaic (NYSE:MOS)
Intraday Stock Chart
Today : Tuesday 18 September 2012
The Mosaic Company (NYSE: MOS) plans to release first quarter fiscal year 2013 earnings results on Tuesday, October 2, 2012, before the market opening of the New York Stock Exchange. Please note the timing of the earnings release has changed from past quarters.
Mosaic expects to release the results at approximately 7:00 a.m. Eastern Daylight Time (6:00 a.m. Central Daylight Time), simultaneously posting performance data on its website in a tabular form. Historical performance data for Mosaic's past eight quarters is currently available at www.mosaicco.com/investor/financialdata.
The Company will also host a conference call to discuss the results on Tuesday, October 2, 2012, beginning at 9:00 a.m. Eastern Daylight Time (8:00 a.m. Central Daylight Time).
Breakout or a fakeout. I'd say resistance but I hope I'm wrong. Need more data...
Mosaic $MOS Provides Hurricane Relief
http://ih.advfn.com/p.php?pid=nmona&article=54060191&symbol=MOS
Grow your portfolio with fertilizer stocks
http://www.marketwatch.com/story/grow-your-portfolio-with-fertilizer-stocks-2012-08-01?siteid=yhoof2
Commentary: Drought’s fallout is not over yet
By Michael Kahn
NEW YORK (MarketWatch) — Thanks to the worst drought in years in the nation’s growing regions, corn, wheat and soybean prices are soaring. Stocks of companies that use grains as inputs, such as cereal and other food makers, are plunging.
But stocks of companies that supply some of the raw materials needed for growers to recover, namely fertilizer and seeds, are doing quite well. With the drought’s fallout destined to last into next year, investors looking to own stocks should have exposure to this group.
To be sure, the run-up in agricultural commodities we saw last month was fast and furious. Corn, for example, gained roughly 40% from mid-June to mi-July and was quite overbought, technically. That means sharp corrections can happen at any time.
But with corn and soybeans at all-time highs and wheat at four-year highs, the long-term trends are to the upside.
From the fundamental side, both farmers and the U.S. Department of Agriculture estimate steep crop losses that will keep the upward pressure on prices. John Person, president of NationalFutures.com and 32-year veteran of the futures industry, was even more bullish on grains prices. He believes that 38-50 % of the corn crop from Iowa, Illinois and Indiana will be lost. Adding, “It is possible we will trade $10.00 corn by end of March 2013 expiration, no joke.”
Corn was trading near $8 when he was interviewed in late July. That means Person sees a 20% gain from here into early next year.
The average investor, however, is likely better off with stocks of companies that sell products needed to overcome the pending grains shortage then the grains themselves. Short of literal rain makers, fertilizer and seed stocks fit this bill.
For example, fertilizer maker Mosaic Co. has been rising since late May and in June it broke out to the upside through a 16-month trendline (see chart 1). As of the time of this writing, it was pausing just below chart resistance at 60. If it clears that level then a run at last year’s high of 90 is not out of the question.
Potash Corp. of Saskatchewan is another fertilizer stock with further upside potential. Unlike peer leaders such as Agrium Inc., Potash is closer to its 52-week low than its 52-week high. That makes it ideal for investors preferring to buy emerging stocks in strong industries, rather than hopping on the bandwagon of stocks that have already had a nice run.
Specifically, Potash broke out through its one-year trendline in June and above its 200-day moving average in July (see chart 2). It was trading in the mid $40s when this was written with important resistance just overhead at roughly $47.50.
If it can breach resistance then a return to last year’s high above $60 would be possible.
Again, both grains and fertilizer/seed stocks have had big rallies and are prone to corrections. For stocks, important technical features such as 200-day averages and falling trendlines have been broken so the path of least resistance is up
Mosaic Continues Higher Despite Weak Q4 And Soft Q1 Guidance
July 23, 2012 | by: The Mays Report |
http://seekingalpha.com/article/741171-mosaic-continues-higher-despite-weak-q4-and-soft-q1-guidance?source=yahoo
When Mosaic (MOS) reported its 4th quarter and full year earnings last week the stock popped just over 5 percent despite lower operating and net earnings. For the full year company EPS was $4.42 versus $5.62 a year ago. However, it is important to note that in fiscal 2011 the company had a gain from the sale of investments of $685.6 million. If we lower 2011 earnings by the same amount and recalculate taxes paid based on the 23 percent effective rate paid in fiscal 2011 we wind up with net earnings of $1.98 billion or $4.43 per fully diluted share versus fiscal 2012 net earnings of $1.93 billion.
Phosphate
The company's phosphate operating segment earned $1.8 billion during the quarter, which was 5 percent lower than a year ago. The decline was due in large part to lower prices as tons sold, at 2.89 million, were at the high-end of company expectations and marginally higher than year ago totals. However prices slid from $536 per ton in the 3rd quarter and $574 a year earlier to $494 per ton in the 4th quarter of fiscal 2012.
Source: The Mays Report
Lower prices received also caused gross margins to decline to 18 percent as operating capacity remained at 86 percent versus a year ago. In the 3rd quarter operating capacity fell to 81 percent, which resulted in gross margins tumbling to 15.7 percent. Gross margins are very sensitive to operating capacity as well as sulfur and ammonia costs. Operating earnings tumbled 39 percent compared to a year ago to $224.1 million.
Potash
Potash sales volumes in the 4th quarter were 6 percent lower than a year ago as distributors kept inventory levels low during the quarter. This was not unexpected. The lower sales volumes were offset by higher prices as net sales from the potash operating segment totaled $1.04 billion during the quarter versus $982 million during the same period a year ago.
Source: The Mays Report
At $455 per ton, potash pricing was basically flat with the prior quarter but higher than the $404 per ton received during the same period a year ago. Operating margins were lower year over year in part due to lower operating rates as they slumped from 95 percent of capacity during the 4th quarter of fiscal 2011 to 85 percent. However, operating capacity improved from 81 percent in the 3rd quarter as the company ramped up production slightly. This helped margins to improve from 15.7% in the 3rd quarter to a still anemic 18 percent in Q4. The company also cited higher unrealized derivative mark-to-market losses, brine management costs, and depreciation costs as contributors to lower gross margins.
The company guided lower moving into their fiscal 2013 as they expect lower phosphate pricing and tons sold during their first quarter. Price estimates range between $510 - $535 a ton, which is 7 - 11 percent lower than a year ago. Phosphate sales volume estimates of 2.5 to 2.8 million tons are 12 - 21 percent below year ago levels.
FY 2013 potash sales volume estimates are roughly in line with year ago levels. However, the company is mum on price, which is not surprising as this has been a bone of contention between producers and dealers since late in Calendar year 2011. I have written for a while now that in my opinion the fertilizer companies were at the top of the current business cycle. So why is Mosaic moving higher? Drought and wheat (WEAT).
The drought has severely limited corn production in the current growing season as there was insufficient moisture during the crop's key pollination period. This has stirred up well founded fears of a supply shortage and this fear has caused more wheat feed purchases. Both corn and wheat prices have surged as a result, with corn climbing to a recent high of $7.95 for December delivery while wheat prices have soared to a recent price of $9.43 a bushel for delivery in September. Since June 26th the correlation between wheat and the stock prices of both Mosaic and Potash Corp (POT) have surged from almost no correlation of 0.14 and 0.03 to 0.94 each, respectively.
Source: The Mays Report
Over the same period the stock prices of Mosaic Co and Potash Corp are up 10.8 and 12.5 percent, respectively. As I have written recently, these gains are a gift as they are not based on business fundamentals. This gift may in fact keep on giving through the August crop report. Should traders choose to continue to ride the rally prudence to protect short-term gains with trailing stops is in order. Longer-term investors could use long-dated puts to offset some of the inevitable decline that will occur once the US and global corn supply situation becomes clearer and the market begins to look at fertilizer business fundamentals again.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Record High Soybean And Corn Prices In Next 18 Months Will Create Bull Market In Agricultural Chemicals Sector States Miller + Tabak Expert
http://finance.yahoo.com/news/record-high-soybean-corn-prices-020700941.html
Analyst Note: Mosaic
Citi analyst raises rating for Mosaic to 'Buy" citing valuation, farmer demand, cash reserves
Associated Press –
http://finance.yahoo.com/news/analyst-note-mosaic-161544425.html
NEW YORK (AP) -- A Citi analyst on Monday raised his rating for The Mosaic Co. to "Buy" from "Neutral" and added it to his firm's top picks list, saying that the fertilizer company should get a boost from an increase in corn prices, higher farmer demand for its products and a possible stock buyback program down the road.
THE OPINION: P.J. Juvekar also set a $66 price target for Mosaic. He noted that the company's shares haven't mirrored the 50 percent jump in corn prices since the start of June, rising just 21 percent, possibility partially because of the uncertainty surrounding fertilizer demand outside of North America.
But he said there's no reason to believe that the strong correlation between corn prices and fertilizer stocks has changed and predicted that Mosaic shares will reflect the strength in the grain markets over the next six to 12 months.
In addition, Juvekar said that investors shouldn't be overly concerned about a potential drop in North American demand stemming from drought conditions in the Midwest, pointing out that after past drought years, fertilizer use has increased.
Meanwhile, the company has about $3.8 billion in cash on its balance sheets that it hasn't been able to spend as a result of Cargill Inc.'s sale of its stake in the company last year. After the restrictions on the cash start to drop off next year, the company could launch a stock buyback program that could significantly boost its profits, Juvekar said.
THE STOCK: Down 15 cents to $57.35 in midday trading. At the same time, the overall market tumbled, with the Dow Jones industrial average plunging more than 200 points on fears about European debt.
Over the past 52 weeks, Mosaic shares have traded between $44.43 and $74.31. Since the beginning of this year, the shares have risen about 14 percent.
Among other fertilizer makers, shares of Agrium Inc. fell $1.36, or 1.4 percent, to $95.36; CF Industries Holdings Inc. lost $3.87, or 1.9 percent, to $198.90; and Potash Corp. of Saskatchewan Inc. dropped 90 cents, or 2 percent, to $45.11.
Drought will not affect fertilizer demand in the US: Citi
Reuters –
http://finance.yahoo.com/news/drought-not-affect-fertilizer-demand-140157438.html
(Reuters) - Fertilizer consumption in the United States is unlikely to decline after the current drought in the Midwest, Citi Investment Research said, upgrading Mosaic Co (MOS) to "buy".
Citi also raised its target price on shares of fellow fertilizer producers CF Industries (CF) and Agrium Inc (AGU.TO) (AGU.N).
"We think investors are over-estimating the potential for demand destruction in North America due to the ongoing Midwest drought," analyst P.J. Juvekar wrote in a note.
Severe heat blanketed much of the U.S. Midwest last week, exacerbating the region's worst drought in more than 50 years and devastating corn, soy and other vital crops.
The drought is the worst since 1956, the National Oceanic and Atmospheric Administration said in a report posted on its website.
Mosaic last week said the drought would not likely dent fertilizer sales, as the drop in agricultural production this year will force farmers to plant more next year.
Analyst Juvekar said that fertilizer demand on average went up following the two recent drought years in 1983 and 1988.
"Total North American phosphate consumption grew about 8 percent and potash about 2 percent on average in the year following these droughts," Juvekar said.
Juvekar is rated four stars for the accuracy of his earnings estimates on Mosaic, according to Thomson Reuters StarMine.
The company could also launch a major share buyback program once the restrictions from the Cargill (CARG.UL) split-off are lifted in 2013, Juvekar said. U.S. agribusiness and trading firm Cargill sold its stake in Mosaic in 2011.
Mosaic shares, which have risen about 1 percent since it reported fourth-quarter results last week, were down slightly at $57.06 on Monday morning on the New York Stock Exchange.
Citigroup raised its target price on the stock of CF Industries to $209 from $193. It raised its target price on Agrium Inc to $100 from $95.
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The Mosaic Company (MOS)
Company Address:
3033 Campus Drive
Suite E490
Plymouth, MN, 55441
Phone: (800) 918-8270
CIK: 0001285785
Mosaic is the world's leading producer and marketer of concentrated phosphate and potash, two of the primary nutrients required to grow the food the world needs. Our business engages in every phase of crop nutrition development, from the mining of resources to the production of crop nutrients, feed and industrial products for customers around the globe. Our customer base includes wholesalers, retail dealers and individual growers in more than 40 countries.
Mosaic was formed in 2004 through the combination of IMC Global Inc. and the crop nutrition business of Cargill, Incorporated. Headquartered in Plymouth, Minnesota, we employ approximately 7,400 people in eight countries. Our shares trade on the New York Stock Exchange under the ticker symbol MOS.
Company Overview: http://www.mosaicco.com/about/company_overview.htm
Management: http://www.mosaicco.com/about/company_overview_management_team.htm
Products and Services News: http://www.mosaicco.com/about/news_and_media_center_products_and_services_news.htm
Recent News:
http://finance.yahoo.com/q/h?s=MOS+Headlines
Share Structure:
Outstanding Shares
446,148,025 as of Dec 31, 2010
Authorized Shares
700,000,000 as of Nov 30, 2010
Investors: http://phx.corporate-ir.net/phoenix.zhtml?c=70455&p=irol-irhome
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