瑞信美股农业行业农业科学行业SD风险上升201873139页

DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.31July2018Americas/UnitedStatesEquityResearchFertilizersAgriculturalSciencesSectorQUARTERLYResea[e-mail]@[e-mail]@[e-mail]@[e-mail]/DRisksMounting,2HVisibilityDissipatingWithyetanotherpositivecropproductionoutlookin'18,we'reupdatingourviewsonglobalag/fertilizerpricing.Westillfindsentimentacrossthespacetobefartooeuphoric,renderingmoststocksinthegroupfairlytoover-valued.■Risk/RewardStillSkewstotheDownside;Uncertaintyin2H&'19:Thesentimentpendulumstillliescomfortablyinbullterritory,despitelighterthanexpecteddemandtrendsinP&K,deterioratingUSfarmereconomics,logisticalconstraintsandadverseFXmovesdoinglittletowarrantsuchapositivestance.Fromtheagmacroperspective,globaldemandremainsquitehealthy,butinourview,supplywillcontinuetomorethankeeppace,renderinglittleupsidetofarmeconomics(andconsequentinputdemand)intheintermediateterm.TheproverbialagL-Shapedrecoveryisinfulleffect,w/fertilizermarketsremainingsupplydrivenin'18/'19(risksbeingdeferred),andCPCdemandstabletomodestlypositive.Westillarguestagnationisthenewnormal,drivinganeutralviewonthemacroandcautiousviewonfertsgivenwidelybullishexpectations.Wehighlightcropprotectionasourfavoriteavenueforagexposureinthecurrentclimate.■FertPriceDisciplineBuoyedbyProjectDelaysin'18;Risksin'19/'20:Thereisnoquestionpricedisciplineispresentlybest-in-classinP&Kmarkets,butriskscontinuetomount.Thestarsalignedin1H18,includingdisappointingrampsfromnewmines/facilitiesandfairlybroadexistingproductionissues(thelatterbeingmostevidentinK).Priceconquersallforthebullthesis(i.e.-thesolefocus),w/bullsflagginglighter1Hdemandassupportiveofincrementalpriceincreases–wedisagree.Webelievelighterdemandisevidenceof(i.)agmacrouncertainty(trade,etc.),(ii.)FXmovements(strongUSD),(iii.)generaldemanddestruction,and(iv.)skyrocketinglogisticscostsfurtherreducingaffordability(e.g.Brazilfreight).Ifdemanddoesn'tfurtheracceleratein2H18,webelievepreviouslydelayedsupply(nowonline)/healthyinventorieswillchallengethedegreeofindustrydiscipline,likelyleadingtopricedegradationinto'19.■FertSupplyDelaysBalancingMkt,But1H18DemandWeaker:P&Kpricesareholdinginmodestlybettervs.our1Houtlook(Npricesin-line),butthedemandback-dropisn'tassupportiveasinvestorsbelieve.InBrazilJan-MayKimportsare–15%,while1H18MAPimportsare–35%,beggingthequestion–assupplyrampsin2H,towhatdegreecanpricedisciplinehold?IndiaisalsoshowingsignsofweakerKdemandduetotherecentsubsidycut(-10%yr/yr),indicatingthattheprobabilityIndia'snewcontractwillachievethecatch-upin2H18investorsanticipateisinfactquitelow.ChinaDAPexportsarenowup10%yr/yr,followingDDyr/yrincreasesin2Q-incontrasttothebullthesis,whichcalledforsignificantdecreases.■OurupdatedTP's/est'sforouragcoverage:MOS('18EPS$1.60TP$25),NTR('18EPS$2.40,TP$50),CF('18CSe$1.05,TP$41).31July2018AgriculturalSciencesSector2TableofcontentsSummaryofEstimateChanges3GlobalAgMarketUpdates4GlobalMarketSummary..........................................................................................4USCropConditionsHealthierThanBettyWhite…..................................................4ChinaAICrackdownShakingUpCropProtection...................................................5LatinAmericaCropReview......................................................................................6BrazilFreightOutlookStillUnclear..........................................................................8OtherGlobalDataPoints.........................................................................................8GlobalNitrogenOverview10GlobalNitrogenPriceOutlook................................................................................12KeyNitrogenInputPrices......................................................................................14NitrogenPricePerformance...................................................................................15GlobalPotashOverview16GlobalPotashPriceOutlook..................................................................................17GlobalPotashMarketOutlook...............................................................................18PotashPricePerformance.....................................................................................20GlobalPhosphatesOverview21GlobalPhosphatesPriceOutlook....................