UFVN2025 trade ideas
The strategic ureaurea has dropped almost to the point from where the price lifted 3 years ago.
it may drop further 17 to 28 % .
the pressure for a short may have a fundamental basis that i am unaware of for this strategic commodity, but the companies like Shapdis & Khorasan are producing under their practical capacity, and are further struggling with the financial constraints imposed by the government default of their debts to the companies.
the conversion line 260 must drop below the price level the commodity starts to rise again.
Goldman's Tony Pasquariello.... on Fertilizer: Russia is the world’s largest exporter of fertilizers. I wonder if folks are too complacent about the inherent risks here? As Adam Samuelson in GIR put it to me, “the spike in fertilizer is a major issue underpinning the bullish view on agricultural commodities and why some of the inflationary pressures in the food system won’t abate anytime soon . These kinds of increases don’t fully start flowing to the grocery store until 2H22 and beyond.
The unsung hero of (over)populationMy more frequent readers already know, that aside from the esoteric (gamma), I have a faible for way more existential matters like energy, food, or..urea.
And before the title of this post gets misinterpreted. No, I do not believe in overpopulation, quite the opposite. I am on absolutely the same page as Elon Musk and I believe people/markets will eventually wake up to the fact that demographics are about to nosedive fast and soon, but anyways.
Currently about 8-9 billion people live on earth and one of the major factors that make this number even possible is urea, which is produced from natural gas and which is a fertilizer. If energy is cheap, food is therefore plentiful, if energy is scarce, food will be too, and people vanish. Simple mechanics.
Check out the chart. The red line maps the european urea spot future, the green line the US equivalent. Since the beginning of the year both benchmarks went up over 200 percent and it is a whole bunch of catalysts that is responsible for this problematic trend.
The list is certainly not exhaustive, but it's a start:
1) China started cornering the global grain market way before the pandemic to prepare for turmoil and stepped up those efforts in 2021. End of January it ramped up its imports of US grains which caused fertilizers to jump about 50%.
2) Early summer: Europe's stance towards Belarus became increasingly confrontational.
3) Late summer: Chinese coal prices went through the roof and dragged european prices higher as well shortly after.
4) Early October: Europe imposes sanctions on Belarus.
5) Late October: Ukraine crisis flares up.
6) Early November: Europe imposes sanctions on Lukashenko himself, who threatened to shut down gas supplies in response.
Europe was a big exporter of urea before becoming an importer I guess 2014 and is now highly dependent on russian supplies. Currently prices are coming down in Europe a bit thanks to Putin's goodwill before upcoming talks with Biden (and the "US tanker armada" of course), but this could change easily again if his demands get rejected.
Food producers are hedged for the coming months, but if this trend spirals out of control once again, then it is not far fetched, that even the developed world could face much higher food prices if not outright scarcity of certain items. Let's hope for the best, but supply lines might be much more vulnerable than people tend to think.
Bearish on pissMy deep fundamental analysis of PISS leads me to believe piss will continue to go up and reject resistance with strength.
Somewhere, someone, FOMO'd on piss. And people are going to FOMO on PISS again, but when profit is taking/hedges are reduced in size (or new opened higher) the price of PISSSSS will retrace violently.
Hey anyone want to join me and pump PISS? Piss has been around for millenia and it is the future of mankind, let's create a PISS bubble and laugh ad idiots are taking debt to speculate on PISS.
PISS IS AN AWESOME RENEWABLE ENERGY AND HUMANITY DEPENDS ON IT!
Gosh I would enjoy my life so much if we go to a "renewable energy" bubble in the next years. And I just know it will happen.
