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.

Urea’s 28% decline isn’t a surprise

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

AdBlue’s affect on Diesel prices

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

More lower prices ahead for Urea

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.

Middle Eastern Urea prices join the Oversold parade

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

More lower prices ahead for Urea

Privately, during 2022 I advised and guided various corporations to lower their input and modelling prices for any future Urea projects.

Publicly, I quipped and eluded to such warnings such as in this post.

Urea’s 28% decline isn’t a surprise

In that January 2021 note, I carried on about parabolic price moves and pending mean reversions.

Back then, I wrote;

“I’m expecting more mean reversion and a $380-$420 price into 2023”

The price of Urea peaked at $935 a year ago.

Today, the price of Middle East delivered Urea is at US$500……

and I think it’s going lower….

and my prediction of a visit to $420 still stands.

The effect of these price moves is that planned projects now seem unfeasible, financing may be withdrawn while with any deficit in development and production, we may see the price of Urea ultimately rise once we see my expected trough.

If I see such price action, it will also influence the share prices of nutrient or fertilizer companies along with grain growers and cereal buyers.

December 22, 2022

by Rob Zdravevski

rob@karriasset.com.au

Urea’s 28% decline isn’t a surprise

The price of Urea fell 28% last night

4 months ago, I posted this about another parabolic price move…this time it was Urea.

https://www.linkedin.com/posts/robzdravevski_another-observation-of-perverse-price-action-activity-6851803815264579584-5in7

More recently, this post correlated the shortage of AdBlue with rising Urea prices.

https://www.linkedin.com/posts/robzdravevski_adblue-diesel-activity-6879698001863032832-t86h

It’s not about whether you buy it or trade it; these type of posts are about when to stay away.

Once again, parabola’s mean revert and markets find a way to either add supply or temper demand, as prices dictate.

I’m expecting more mean reversion and a $380-$420 price into 2023.

January 28, 2022

by Rob Zdravevski

rob@karriasset.com.au