Right now, it is unfortunately the case that potash prices in the U.S. continue to decline despite recent events. You can check AG Web for that data point. My guess is that things will start to turn around when we hear, say, that the U.S. will not allow Russian exports to show up on our shores. Another potentially positive development that would support a decisive change in potash prices would be if Uralkali and Belaruskali agreed to a 50-50 split as far as potash sales were concerned. The reason is that that would mean that Uralkali would be obliged to shelve production which it is currently not doing. Uralkali would never agree to this allocation absent political pressure from the Kremlin. However, that cannot be ruled out given who has now taken over Uralkali and what it will take to smooth relations between Russia and Belarus. The day you hear that either or both of these things have occurred, the share price of POT will be on the rise because the price of potash will likewise be rising.
You are right. One of us is looking at the wrong chart and it wasn't me. Your figure is a composite taken from Yahoo Finance which does not specify the kind of moving average it is talking about so you are in no position to tell me I was wrong. The simple moving average, which is what I mentioned, was $34.82 according to the Street Smart chart I use and this was also the figure mentioned in a recent article pointing out that POT was approaching that cross point. If you still believe the breakout is intact, you can't read a chart. The only "good news" I see from today's decline is that the number of shares changing hands is below average. But down is down and down is not good.
The 1 day breakout looks like it is over. The ramp up was probably the result of a fair amount of short covering but now that the stock has settled back down, that pressure is subsiding. For some, given that the stock is now in technically "overbought" territory, there is reason for traders to get out. So I guess we will have to wait until there is real economic news warranting that the next stock rise has something substantive backing it up.
Add major drought in Brazil causing price spikes in coffee, soybeans and sugar. Couple that with the recent announcement that the new controlling shareholders of Uralkali want to resume the joint marketing arrangement with Belaruskali and there are instant reasons why MOS has picked up in the last few days.
The breakout looks like it is failing. The stock is now way off its high and continues to head lower. When a stock breaks out nicely and then retreats below the breakout point on high volume, it usually does not bode well. Not that far to go before it becomes official. Too bad. I was enjoying this.
Investors like hearing it from the horse's mouth even though they figure that eventually the reunion is going to happen. We know it takes 2 to tango but Belarus is already on record that they want the joint marketing arrangement to be restored. How and when that happens is obviously still up in the air.
The 2 largest shareholders of Uralkali announced today that they advocate the restoration of the joint venture partnership with Belaruskali. A renewal of the BPC cartel would undoubtedly affect potash prices in a positive way. Investors might reasonably have reacted to this news although it only came out 2 hours ago. Officially that is.
You are right of course. BHP was rebuffed on its takeover attempt because it could not meet the 'net benefit to Canada' standard for an acquisition of this type. Perhaps some other company could pass the test but it is unlikely. Besides, an acquisition of POT would require a great deal of scratch which puts it outside the capability of almost all enterprises. I wish more people would consider the difficulties associated with a takeover of this type before casually suggesting that a takeover was the likely explanation for why the stock is having a decent up day for a change.
Barclays raised its price target on Agrium to $113. Could be some sympathetic trading. MOS is also a bit elevated with a 1% positive change. Sometimes stocks go up for no reason. Ditto on the way down. Better when the former occurs than the latter.
I am unaware of any specific news. As of February 14th, there were still over 25 million shares held short with just shy of 4 days to cover. Perhaps there is also some short covering going on today. And don't forget the ongoing buyback of shares by POT.
There is no secret that POT would like to acquire all or at least a controlling interest in SQM, the Chilean potash, iodine and lithium company. In its most recent earnings release, SQM's earnings were down 51%, largely due to declines in the price of potash and iodine.
The Chilean securities regulator has accused the CEO of SQM, Julio Ponce, the former son-in-law of the late dictator, Augusto Pinochet, of market manipulation through executives and traders working under his direction.
It may all come to nothing but one never knows. POT and Ponce each have a 32% stake in SQM. I previously mentioned that Ponce has been reported to have been in some financial trouble which had the potential for him to sell out his interest in SQM to POT. Now added to that is the investigation into market manipulation he is said to be involved in.
Uralkali sells potash in 40 countries, some of which, as you rightly point out, could care less what country Russia invades. They will continue to buy from them. But not necessarily as much as they otherwise might have purchased. And some of the others may now prefer to do business elsewhere. Ditto the Europeans. Still, they will likely get knocked out of the U.S. and lose that 5% market share largely to the members of Canpotex if the U.S. follows through on economic sanctions. All in all, there is nobody at Uralkali celebrating over what the Russians have been doing in the Ukraine. By the way, Uralkali sells so little potash in South Korea and Japan that they don't even indicate a percentage. You can see that clearly on their global sales map.
I bet there is going to be lost business for them even without a 'Do Not Pass Go' sign put up by the relevant countries in North America and Europe. Some folks are just not going to want to do business with them as usual.
The Chinese do not respond to events that do not adversely affect their own, parochial interests. They need oil so they buy it from anybody that has it. End of story. Remember, they are the patrons of North Korea where atrocities are a daily occurrence. If the Russians ever tried to pull on Chinese territory what they have done in the Ukraine, you would not hear any urbane, witty, cosmopolitan chatter from them. They would immediately launch a counterattack. But precisely because they don't kid around, nobody is going to bother them.
If the West were serious, all Russian assets in North America and Europe would be frozen. If you hurt Putin's cronies, his support will vaporize and then he will relent. But that won't happen. And the Europeans need his oil and natural gas so I don't expect much from them. Not now and not when Russia reincorporates all of the Ukraine into its sphere. The price of appeasement is very high. Putin has already taken the measure of everyone who matters so he knows that he can get away with whatever he wants. That is not to say there won't be any economic fallout from his actions. Certainly what he is doing can't but help our investments. I know he is helping mine. The big question now is whether the Ukranians will collectively say "Nuts" and attempt to repulse the invaders. More likely a total cave but stranger things have happened. But should the shooting start, keep a good grip on your gold hoard.
I don't think potash goes to the moon unless Ukranian forces destroy Uralkali's potash mines. Which isn't going to happen. Of course if Uralkali can't sell much product, the effect may prove similar.
Over 25 million shares still held short with 4 days to cover based on average daily volume. Yeah, I guess the current turmoil could move the dial a bit.
I realize that the ongoing Russian invasion of Ukraine has folks wondering what would happen if Uralkali could no longer sell its potash due to an embargo of its goods. Here is the breakdown of where they sell their potash and the percentages associated with those locations:
North America: 5%
SE Asia: 13%
Uralkali currently sells its potash in more than 40 countries. Contrary to what I stated on a previous occasion, it now appears as if Uralkali would be significantly hurt if it were unable to sell potash not only in the U.S. but in Europe as well where they had a larger market share than I previously indicated. One noteworthy thing to keep in mind is that if Uralkali were to be limited in where it could sell potash, say, in the U.S. and Europe, it is not as if this would suddenly be an opportunity for Belaruskali. The reason is that Belarus is already regarded in the US and Europe as a pariah state whose goods cannot be imported.