11/7/2024 U.S. CVD Update
Unfortunately, the news that we thought we were going to get came out this morning.
The U.S. Commerce Department has voted to raise both Moroccan and Phosagro (Russia) phosphate import duty rates:
- OCP (Morocco) - raised to 16.81% (preliminary 14.2% so higher on final vote)
- Phosagro (Russia) - raised to 18.21% (preliminary 18.83% so slightly lower on final vote)
...so what does it mean?
Fundamentally, absolutely nothing.
We were already set up in a system that saw very little to no phosphate imports from either country. So from a fundamental POV, nothing changes. You cannot really get lower than 0 imports.
However, the emotion may have a different story. There are some in the industry that will see it as a bullish event as it "stops any hope of imports returning". Obviously that helps the POV moving into the fall season.
Unfortunately, this is fertilizer and sometimes emotion can mean more than the fundamentals.
We will need to watch and see what the reaction is. I still lean bullish on values as all early demand indications are solid. Reports are coming back that farmers are recognizing that a big crop removals big nutrients that need to be replaced to raise another big crop next year.
Always something to keep us on our toes.
This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
Reproduction or use in any format without authorization is forbidden.
© Copyright 2024. All rights reserved.
Discover more insights
