Now…I fancy some fertiliser

“I’m expecting more mean reversion and a $380-$420 price into 2023” – written in January 2022

This is when I started expressing concern about the parabolic price moves in Urea and advised to not chase it higher, in fact warning of a large mean reversion ahead.

https://robzdravevski.com/2022/01/28/ureas-28-decline-isnt-a-surprise/

Only a month earlier, I was correlating Diesel additive, AdBlue and its effects on the Urea price.

https://robzdravevski.com/2021/12/23/adblues-affect-on-diesel-prices/

One year later, I had a follow up note reciting that call with this note,

https://robzdravevski.com/2022/12/22/6043/

then in January 2023 (only 4 weeks ago), I reprised my commentary that the price target of $380 has been seen (down from $900) and now Buying is on my mind.

https://robzdravevski.com/2023/01/27/middle-eastern-urea-prices-join-the-oversold-parade/

https://robzdravevski.com/2023/01/26/urea-accumulate-signal/

Today, Middle East Urea futures are trading at $358….I’ll give it down to $345 before the first accumulating tranche…but it’s in the ballpark.

$293 may resemble a ’scorched earth’ scenario but a $65 (or 18%) entry variance should be tolerated considering a 65% correction has been seen within 11 months.

February 21, 2023

by Rob Zdravevski

rob@karriasset.com.au