Lower Fertilizer Prices?

Fertilizer prices have been a topic of conversation with family and friends this past holiday season.

Before Christmas, I developed a thesis that prices would start declining sometime in January based on a vulnerability in the various fertilizer charts and speculation that the lower natural gas prices would lead to that decline.

I developed this thesis more from reading the tea leaves than charts, however, they are beginning to confirm.

I will look at different timeframes in different markets.

This report will be longer than usual. Bear with me.

First up.

Natural Gas Futures Weekly Chart

We can see the price has declined 40% from the October high and is finding resistance at the 0.50 Fibonacci level.

Notice the confluence of the anchored VWAP from the June 2020 low and the Golden Zone of the 0.618 and 0.65 Fib levels and previous supply.

The version of the TD Sequential indicator that I use suggests three more weeks to the downside.

This pullback would fit nicely with the said confluence, and I will be looking for consolidation at that level or a reversal to the upside.

UREA (GRANULAR) FOB US GULF FUTURES DAILY

Price, indicated by the blue line, is now below the green 50 Day Moving Average signalling a short-term trend change.

UREA (GRANULAR) FOB US GULF FUTURES WEEKLY

I prefer candlestick charts.

This one indicates potential support at the 680 level.

UAN NOLA FUTURES DAILY

NOLA Futures are still above the 50- DMA and near the all-time high.

Not much to see on this chart.

UAN NOLA FUTURES WEEKLY

Notice the bearish divergence between the price and RSI.

The RSI is in overbought territory, and the MACD is about to get bearish suggesting lower prices.

UREA (GRANULAR) FOB EGYPT FUTURES WEEKLY

The weekly candle topped on a green TD9 count and has begun a pullback.

The red 2 below a red 1 candle suggests 7 more weeks to the downside.

Will it happen?

UREA (GRANULAR) FOB EGYPT FUTURES MONTHLY

December closed on a green TD9 which signals a potential top and 1-4 month correction.

The chart is parabolic, so…….

UREA (GRANULAR) CFR BRAZIL FUTURES DAILY

The price is below the flattening 50 DMA signalling a short-term downtrend.

UREA (GRANULAR) CFR BRAZIL FUTURES WEEKLY

The red TD5 on the weekly chart suggests another four weeks to the downside.

UREA (GRANULAR) CFR BRAZIL FUTURES MONTHLY

December closed on a green TD9 suggesting a top and 1-4 month correction.

DAP FOB NOLA FUTURES DAILY

Today’s price is crossing below the 50 DMA.

DAP FOB NOLA FUTURES WEEKLY

The weekly is on a red TD3 suggesting six more weeks the downside.

DAP FOB NOLA FUTURES MONTHLY

November closed on a green TD9 bringing anticipation of a pullback.

Lower fertilizer prices will be welcomed by farmers and shift acres.

Will it happen?