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   Non-TechUAN - The variable distribution MLP that could go a long way


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From: Elroy8/26/2021 5:31:49 PM
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This page updates at about 2pm West Coast time each day.

It contains the pricing for the UAN futures contracts that traded during the day.

Q1 is above $330/ton for UAN fertilizer now.

It tells us where fertilizer pricing is going.

We are now in the weakest season for fertilizer. There is no fresh planting now. The current buyers of fertilizer are restocking what they sold in Q2 planting season, in preparation for future sales. Prices are weak, until November when they start to rise as customers buy from spring planting season.

Nevertheless, prices are going up. Above $300/ton for UAN fertilizer, UAN the MLP will shit money like there is no tomorrow.

cmegroup.com

Why the market doesn't see this is also beyond me. I'm not a fertilizer expert, and I know this. Where are the agriculture investment specialists?

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To: Elroy who wrote (169)8/27/2021 9:04:46 PM
From: Area51
   of 352
 
I think it requires more patience. If you are backword looking UAN it doesn't look cheap now (EV = 1.2 billion, 6 month EBIDTA is 56 million and 12 month TTM is lower than that I presume; so EV/EBITDA is > 10). And company doesn't have any decent brokerage coverage. UAN should look cheap by the end of the fiscal year I predict (EV = 1.2 billion, with Publius FY 21 EBIDTA estimate of 337 million would be EV/EBITDA of 3.7 at the current price, and if you annualize second half EBIDTA it should look very cheap at its current price.

But you are right that we need to look forward - the point is that 3Q is the quarter that they will finally print a clean quarter reflecting ALL of higher spot prices. Will the market start to finalize capitalize some of this? Of course totally TBD but I like the setup here. If it pulls back to the 50 area again I'll add a few calls, but if it flies straight to an EV of 8 x 337 million that would make be very happy even with just my current position.

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To: Area51 who wrote (171)8/27/2021 11:01:09 PM
From: Elroy
   of 352
 
If you are backword looking

On what planet is the stock market "backward looking"?

I'm not fertilizer expert, and it's obvious to me that this MLP is going to produce massive distributions over the next four quarters. It's obvious.

Are we to assume that the rest of the market does not know what we know?

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From: Elroy8/29/2021 4:25:20 PM
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I've read this storm Ida is moving right through some of competitor CF's UAN and Urea manufacturing plants.

This coming week could be interesting.....

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From: Elroy8/31/2021 7:02:37 PM
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New survey forecasts 2% increase in 2022 corn planting

farmprogress.com

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From: Elroy9/1/2021 10:24:33 AM
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46% of farmers expected input costs would be worse in the coming year, with only 16% projecting lower input costs





Agriculture Confidence Index Results
Agriculture Confidence Index Shows Farmers Confident, but Concerned About Input Costs







https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2021/08/31/agriculture-confidence-index-shows

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From: Elroy9/1/2021 5:30:33 PM
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Q1 UAN NOLA futures up $15 on average today.......get ready for UAN the MLP to explode upward fairly soon.

cmegroup.com

At $300/ton UAN the MLP can easily pay $20 per year.

It appears 2022 prices are going to be well above $300 ton. The 2022 big buying season starts in November 2021......

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From: Elroy9/2/2021 9:49:02 AM
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The Mosaic Company Announces Hurricane Ida Impacts

finance.yahoo.com

Wind damage to the Faustina and Uncle Sam facilities from the storm is expected to result in reduced production as repairs are completed over the next 8 to 9 weeks. The following expectations also include estimates of production loss from an August equipment failure at the company's New Wales facility in Florida.

In the third quarter, relative to historical averages, production is expected to be down by approximately 300,000 tonnes. Fourth quarter operating rates are expected to improve sequentially, but production may still be down from historical averages. Mosaic plans to provide an update, including estimated financial impacts of the hurricane, when it reports third quarter results.

--

We care about the affect of Ida on CF's UAN manufacturing facilities in the area. I read CF manufactures 50% of the UAN consumed in the US in that region.

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From: Elroy9/2/2021 3:40:31 PM
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More indicators that fertilizer prices are high and perhaps moving higher.....

Strong Corn Prices Come at a Cost

dtnpf.com

oe Sinclair, president of national ag chemical wholesaler Quality Ag Service, recently told DTN's Elizabeth Williams that he advises farmers to check fertilizer prices before making cropping plans. "There will be some sticker shock for producers. Nitrogen and potassium prices are almost double year-ago prices.

Sinclair said the last time fertilizer prices spiked like this was in 2008, but prices fell back the following year.

"Will we see a similar reality check for corn and fertilizer prices in 2022? I think it might take until 2023 before prices come back down," Sinclair said. "World ending stocks are so low, it may take another year to build up a safety net of grain stocks."

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From: Elroy9/2/2021 6:20:26 PM
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CEO of UAN bought 5,000 shares of UAN.

sec.report

Bring on the distributions!!

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