CF Industries May Be Cut to Junk by Moody’s on Weak Prices

[SASKFARMER3]

Not much banding happening anywhere as ground is fracking mud.

Moody’s Investor Services lowered its rating on CF Industries Inc., the U.S. nitrogen-fertilizer maker, and said it may be cut to junk as a slump in the fertilizer industry is seen persisting.
CF’s rating was lowered to Baa3 from Baa2, as deteriorating industry conditions are seen lasting “for longer than previously expected,” Moody’s said in a statement on Friday. Lower nitrogen prices and new capacity in North America is seen pressuring the company’s credit. A further reduction of as much as two levels is possible, and CF’s actions to manage through the weak operating environment are under review, Moody’s said.
“While Moody’s had anticipated that nitrogen fertilizer prices would decline as new capacity expansions at CF and other producers come on line in 2016 and 2017, the low prices over the past several months have persisted far longer than previously anticipated,” Moody’s said. “The negative impact of weaker prices and volumes will likely cause CF’s credit metrics to well exceed Moody’s prior estimates.”
CF shares slid 3.2 percent to $22.30 at 2:10 p.m. in New York, on pace for a 6.9 percent drop this week. The stock is down 45 percent this year.
Spot prices for urea at the U.S. Gulf tumbled to a 12-year low in recent months, according to Green Markets data. Global nitrogen capacity is seen continuing to climb, keeping pressure on prices into 2017, according to a Bloomberg Intelligence report. A slump in grain futures has added to weakness in fertilizer prices, with corn futures on pace for a fourth straight annual decline.

So when your shit for brains Fertilizer dealers come walking and try to get you to buy fertilizer realize the market is in trouble and needs cash and you Mr. Farmer control the final outcome. Buy to early gives them the upper hand buy later or spring and you win.

Its a dog eat dog world. Because they don't give a shit if you have crop out they couldn't care at all thats your problem. In reality they need you but will never say it.

[farmaholic]

Oh I know they know it. The Independents I deal with know who buys their lunch. There seems to be a level of appreciation. They are only the retail level.... then there's wholesale. I doubt the retails want to be long on expensive fertilizer either.... and are wondering what to do as well. Good thing there won't be the blood-bath of (what year was it) when urea was in the range of $8-900/tonne and then it dropped significantly. I was caught in that shit show!

I don't think there is much upside to fert prices other than the "seasonal rip-off".... but how much lower could it go? There will be little fall applied this year,,, some areas can't get on the fields because of crop still out or too wet.

[Oliver88]

Nitrogen sliding down.

Interesting to see how much NH3 goes on this fall at the reduced price and how the supply is in May 2017.

[4GFarms]

Wonder when the word"shortage" will come out??

[bucket]

The term ...maintenence shutdown.....might be a clue.

[WiltonRanch]

Or a plant fire.

[ajl]

Local independent here saw this coming an sold out to CPS. So they didn't need us, they needed CPS which is the only buyer for used fertilizer dealerships.