Tag Archives: Agriculture

Morgan Stanley’s #Commodities Outlook – Business Insider


MORGAN STANLEY: This Is What The The World’s 14 Most Important Commodities Will Do

mauritius sugar cane
Sugar cane plantation in Mauritius

With the growing global population increasingly demanding goods, many financial advisors have advised clients to invest in commodities. Morgan Stanley’s commodities team led by Hussein Allidina favors soybeans, corn, and wheat as poor weather conditions slam supplies.
They also like precious metals, particularly gold and silver, as loose monetary policy sends investors seeking something with more stable value.  In fact, Morgan Stanley recently called the Federal Reserve’s latest action a game changer for the yellow metal.
What follows are Morgan Stanley’s opinions and price targets for 14 major commodities.


Brent oil continues to be affected by geopolitical tensions

Projected 2012 average: $110 /bbl
2013 price: $115 /bbl

Middle East unrest and and easy central bank monetary policies continue to support oil prices, though softer fundamentals heading into 4Q12 should weaken year-end crude prices. Risks are skewed to the upside for 2013.

Source: Morgan Stanley

Natural gas supplies will tighten by the end of the year, eventually sending prices higher

Natural gas supplies will tighten by the end of the year, eventually sending prices higher
Natural gas compressor station

Projected 2012 average: $2.74 /mmBtu
2013 price: $4.00 /mmBtu

Oversupply continues to weigh, but slowing gas-directed drilling may begin to help tighten balances by late 2012.
Source: Morgan Stanley

 

Aluminum prices will stay at low levels due to oversupply and too much production

Aluminum prices will stay at low levels due to oversupply and too much production
Sean Gallup/Getty Images
Projected 2012 average: $2,100 /MT
2013 price: $2,200 /MT
Very high global inventory and excessive production capacity will lead to up to two years of headwinds.
Source: Morgan Stanley

Copper prices will lead the industrial metals due to supply concerns

Projected 2012 average: $7,900 /MT
2013 price: $8,300 /MT
Supply difficulties will keep copper prices elevated — the global inventory pipeline remains soft.
Source: Morgan Stanley

Nickel supplies remain high, but price risk is to the upside

Nickel supplies remain high, but price risk is to the upside
Projected 2012 average: $17,800 /MT
2013 price: $18,300 /MT 
Supply risks from any new project delays and the impact of developments in Indonesia will keep the market primed for a price rally.
Source: Morgan Stanley

Zinc will continue to suffer from oversupply for several more quarters

Projected 2012 average: $2,000 /MT
2013 price: $2,100 /MT
Record-high inventories at the current rates of demand weigh on prices, but production is slowing. 
Source: Morgan Stanley

Gold is the best commodity to own right now

Projected 2012 average: $1,677 /oz
2013 price: $1,816 /oz
Interest rates, risk aversion and strong physical market fundamentals will serve as tailwinds.
Source: Morgan Stanley

Silver prices will be supported by the same forces fueling gold’s rally

Projected 2012 average: $32 /oz
2013 price: $35 /oz

Negative real interest rates will limit downside price risk.
Source: Morgan Stanley

Platinum lacks the safe-haven status of gold or silver

Projected 2012 average: $1,554 /oz
2013 price: $1,715 /oz
Platinum lacks safe haven status and has limited investment demand. Slowing global GDP and lower discretionary spending remain headwinds.
Source: Morgan Stanley

>Has Potash lost its Momentum? | Resource Investing News


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Has Potash lost its Momentum?
March 9, 2011 @ 4:52 pm In Feature Articles
By Leia Michele Toovey-Exclusive to Potash Investing News [1]
[2]Financial services firm Citigroup [3] (NYSE:C [4]) believes that the recent rally in stock prices of Potash Corp. of Saskatchewan [5] (NYSE:POT [6]) and Mosaic [7] (NYSE:MOS [8]) is about to lose steam.
On Wednesday, Citi analyst P.J. Juvekar downgraded Potash Corp. and Mosaic to hold, from buy. Citigroup also advised investors to take profits on the fertilizer plays, noting that “much of the good news” in the sector has already been digested by the markets.
“Lacking well-defined near-term catalysts, we see growing risk that the stocks could trade sideways into the summer,” Juvekar wrote. Juvekar is still bullish on fertilizer fundamentals, but thinks that the momentum generated by improving farm commodity prices could slow. “When corn moved from $3.50/bushel to $7/bushel, there was ample incentive to invest in more fertilizers to improve yields. At current corn prices, growers are incentivized to apply all the fertilizer they need to boost yields. If corn prices rose from $7/bushel to $8/bushel, farmers may not apply even more fertilizer. The incremental dollar may be invested elsewhere, such as in new machinery or land.”
However, optimism still reigns over the potash market. Last night, in his Mad Money Lightning Round, Jim Cramer voiced his opinion in regards to the recent sell-off of Potash Corp. stock. “Everyone is selling everything, but it’s not the end of the world. People are still running out of food. Potash needs to be bought,” said Cramer.
Smartrend [9], a trend trading system, pinpointed three fertilizer stocks with high potential upside, including Citi’s downgraded Potash Corp. Smartrend claims Potash Corp. has a potential upside of 25.4% based on a current price of $58.29 and an average consensus analyst price target of $73.08. Smartrend also added CF Industries (NYSE:CF [10]) and Agrium to its stock picks with high upside potential. According to Smartrend, CF Industries has a potential upside of 23.5% based on a current price of $128.94 and an average consensus analyst price target of $159.27. Agrium (NYSE:AGU [11]) has a potential upside of 14.0% based on a current price of $92.84 and an average consensus analyst price target of $105.81.
Meanwhile, Europe’s biggest potash producer, K+S Ag (ETR:SDF [12]) lifted its potash price for the fifth time this week, citing agricultural inflation as the main reason. This upgrade followed a report from the United Nations Food & Agriculture Organization that said record food prices are likely to be sustained this year because of high oil costs and smaller harvests.
Company news
Global X, the New York City-based ETF issuer best known for its suite of emerging market ETFs, is continuing the expansion of its product lineup with a new filing with the SEC. Among these new offerings is a fund covering the Fertilizer/Potash Industry. The Fertilizer & Potash ETF which will seek to track the Solactive Global Fertilizers/Potash Index. This index follows the performance of the largest and most liquid listed companies globally that are active in some aspect of the fertilizer industry. The index is calculated as a total return index in USD and adjusted semi-annually. The stocks are screened for liquidity and weighted according to free-float market capitalization. Global X has cited skyrocketing interest in the fertilizer sector as the main reason for this new offering.
Allana Potash Corp [13]. (CVE:AAA [14]) has reported encouraging drill results from its Danakil Depression project in Ethiopia. Allana drilled to test the southern unexplored limits of its concessions. The drill hole intersected a 1 meter zone of 44.5% potassium chloride (KCI), the highest concentration of potash Allana has struck to date. While not particularly thick, the shallowness of the resource (at less than 120m deep) would be extremely suitable for open pit mining, which the company is considering pursuing and on which we have based our NAV,” said Dundee Capital Markets analyst Richard Kelertas. Kelertas also told his clients that these excellent results of drill hole #11 support the view that Allana is sitting on a potash resource far bigger than its current NI 43-101 resource estimate would suggest.

Article printed from Resource Investing News: http://resourceinvestingnews.com
URL to article: http://resourceinvestingnews.com/13796-has-potash-lost-its-momentum.html
URLs in this post:

[1] Potash Investing News: http://potashinvestingnews.com
[5] Potash Corp. of Saskatchewan: http://potashcorp.com/
Copyright © 2010 Resource Investing News. All rights reserved.

Has Potash lost its Momentum? | Resource Investing News

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Has Potash lost its Momentum? | Resource Investing News


Has Potash lost its Momentum?
March 9, 2011 @ 4:52 pm In Feature Articles
By Leia Michele Toovey-Exclusive to Potash Investing News [1]
[2]Financial services firm Citigroup [3] (NYSE:C [4]) believes that the recent rally in stock prices of Potash Corp. of Saskatchewan [5] (NYSE:POT [6]) and Mosaic [7] (NYSE:MOS [8]) is about to lose steam.
On Wednesday, Citi analyst P.J. Juvekar downgraded Potash Corp. and Mosaic to hold, from buy. Citigroup also advised investors to take profits on the fertilizer plays, noting that “much of the good news” in the sector has already been digested by the markets.
“Lacking well-defined near-term catalysts, we see growing risk that the stocks could trade sideways into the summer,” Juvekar wrote. Juvekar is still bullish on fertilizer fundamentals, but thinks that the momentum generated by improving farm commodity prices could slow. “When corn moved from $3.50/bushel to $7/bushel, there was ample incentive to invest in more fertilizers to improve yields. At current corn prices, growers are incentivized to apply all the fertilizer they need to boost yields. If corn prices rose from $7/bushel to $8/bushel, farmers may not apply even more fertilizer. The incremental dollar may be invested elsewhere, such as in new machinery or land.”
However, optimism still reigns over the potash market. Last night, in his Mad Money Lightning Round, Jim Cramer voiced his opinion in regards to the recent sell-off of Potash Corp. stock. “Everyone is selling everything, but it’s not the end of the world. People are still running out of food. Potash needs to be bought,” said Cramer.
Smartrend [9], a trend trading system, pinpointed three fertilizer stocks with high potential upside, including Citi’s downgraded Potash Corp. Smartrend claims Potash Corp. has a potential upside of 25.4% based on a current price of $58.29 and an average consensus analyst price target of $73.08. Smartrend also added CF Industries (NYSE:CF [10]) and Agrium to its stock picks with high upside potential. According to Smartrend, CF Industries has a potential upside of 23.5% based on a current price of $128.94 and an average consensus analyst price target of $159.27. Agrium (NYSE:AGU [11]) has a potential upside of 14.0% based on a current price of $92.84 and an average consensus analyst price target of $105.81.
Meanwhile, Europe’s biggest potash producer, K+S Ag (ETR:SDF [12]) lifted its potash price for the fifth time this week, citing agricultural inflation as the main reason. This upgrade followed a report from the United Nations Food & Agriculture Organization that said record food prices are likely to be sustained this year because of high oil costs and smaller harvests.
Company news
Global X, the New York City-based ETF issuer best known for its suite of emerging market ETFs, is continuing the expansion of its product lineup with a new filing with the SEC. Among these new offerings is a fund covering the Fertilizer/Potash Industry. The Fertilizer & Potash ETF which will seek to track the Solactive Global Fertilizers/Potash Index. This index follows the performance of the largest and most liquid listed companies globally that are active in some aspect of the fertilizer industry. The index is calculated as a total return index in USD and adjusted semi-annually. The stocks are screened for liquidity and weighted according to free-float market capitalization. Global X has cited skyrocketing interest in the fertilizer sector as the main reason for this new offering.
Allana Potash Corp [13]. (CVE:AAA [14]) has reported encouraging drill results from its Danakil Depression project in Ethiopia. Allana drilled to test the southern unexplored limits of its concessions. The drill hole intersected a 1 meter zone of 44.5% potassium chloride (KCI), the highest concentration of potash Allana has struck to date. While not particularly thick, the shallowness of the resource (at less than 120m deep) would be extremely suitable for open pit mining, which the company is considering pursuing and on which we have based our NAV,” said Dundee Capital Markets analyst Richard Kelertas. Kelertas also told his clients that these excellent results of drill hole #11 support the view that Allana is sitting on a potash resource far bigger than its current NI 43-101 resource estimate would suggest.

Article printed from Resource Investing News: http://resourceinvestingnews.com
URL to article: http://resourceinvestingnews.com/13796-has-potash-lost-its-momentum.html
URLs in this post:

[1] Potash Investing News: http://potashinvestingnews.com
[5] Potash Corp. of Saskatchewan: http://potashcorp.com/
Copyright © 2010 Resource Investing News. All rights reserved.

Has Potash lost its Momentum? | Resource Investing News

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