Agree. CF is now free to eat Yara's lunch, while they look for a new CEO, and without the baggage of a govt anchor hanging around their neck. And in a month, the baltic dry index dropped about 20% and henry hub nat gas dropped 5%.
They just announced that the merger talks got cancelled. Good riddance, it was a lousy idea anyway. Whoever bought all those October 18 $295 calls got reamed, though.
This stock has the feel of not getting bought out. I don't think Yara is thrilled with the big loss of the corn buys from China and the overall swoon of the stock market, which appears to have all the indications of entering a bear market. They aren't going to look stupid, pay $350 for something that falls in value down to $200 when the full force of a bear becomes obvious to all.
This GMO burhaha is just getting started and it will create a lot loses for many in the AG market, including the fertilizer sellers, NG low prices not withstanding.
Sentiment: Strong Sell
easy come easy gone = ouch
gaining +15 points yesterday
losing -10 points so far today
gotta learn to exercise those
fast trading fingers to capture
gifted gain/gifted profit daily
Maybe in parts of the USA. Global demand for food is sky high. CF is a wanted company long term. Sister company TNH is about 4/x undervalued right now.
Yara will now have to figure in transportation costs of selling product to China, now that they are growing a substantial portion of their own corn. Their canceling the orders amount to almost 1/3 of US corn production.
Corn prices have gone off a cliff because large foreign buyers don't want the GMO types which covers a lot of the breeds in our grain production. If Yara buys CF, they will find a real problem in the US market despite the allure of lower NG prices to produce the fertilizers. MON and MCD are others that are going to get theirs. Cheerios wasn't changed to have no GMO's as a marketing ploy, there is real fear in the food business about GMO's and it is only going to get worse.
Sentiment: Strong Sell
There were 1,000 calls for the Nov 295 bought yesterday, as well. $300,000 is a pretty big bet. No put option to cover that, as of yesterday. If you listen to the recent earnings call, they are expecting big things from their expansion and a doubling of the dividend. They seem to have little regard for recent market weakness, that has held back other companies in the group.
Listening to 'Coast-to-Coast', George Noory's overnight show, his guest was discussing the GMO problem. He said China and Russia have substantially cutback on US grain purchases. This may explain the collapse in the prices for corn, wheat and soybean. Under normal circumstances, this possible buyout of CF by Yara would occur, but these order cancellations may tank the deal.
If the farmer is selling below cost of production he has to cut cost. Nitrogen today is overpriced relative to the corn price. The farmer will cut back on the use of nitrogen.
the world is kinda want to have food over the years. if this is the lowest cost place to make the fertilizer, then who cares what the daily price of corn in Peoria is??
“he feels there’s a breach of contract by Yara because he agreed to join the company July 18 but was not aware of the CF talks until he was informed Sept. 9,”
Guess Yara Board changed their mind about Svein Richard Brandtzaeg , serving as their CEO. Not telling him about the talks with CF after coming to terms with him taking the helm at Yara is a slap in the face. Seems that he had no choice other than to bail and that's must be what Yara wanted.