瑞信-美股-农业行业-美国农业科技：生物燃料逆风使农业防御力更为悲观正式版.pdf

27 May 2020 Equity Research Americas | United States Agricultural Sciences Sector Biofuel Headwinds Negating the Defensibility of the Ag Sector, But Fert Cost Curves Should Eventually Re-Connect vs. Low Expectations Fertilizers | Sector Review More to Global Ag Story than US Corn – Though Aid is Necessary: The vast majority Research Analysts of investors don’t want to “touch” ag due to ’21 corn acre risk, but we stress that’s ignoring 90% of the equation. We retain significant concerns re: (i.) biofuel demand (US corn, SE Christopher S. Parkinson Asia Palm Oil, Brazilian sugar), (ii.) further China / US political hostility (lack of trade flows, 212 538 6286 RMB depreciation), (iii.) 2H seed price competition (esp. Retail channel), (iv.) ongoing US christopher.parkinson@ uncertainty for ’21 given carry concerns (biofuels, feed, etc.), and (v.) EM FX volatility. As Kieran de Brun much as that’s a lot to keep one up at night, we note: (i.) all three macro fertilizers are fairly 212 538 3440 close to their respective global cost curves (N is below parity, P is close K slightly above), kieran.debrun@ (ii.) the initial ~$19bln of farmer aid is an incredible safety net (esp. as many farmers’ crop Harris Fein inventories are “under water”), (iii.) ’21 global input demand should still grow off of a lower 212 538 3064 base (despite lingering crop inventory headwinds), (iv.) CPC demand is still poised to be harris.fein@ healthy in certain regions / crops, and (v.) China replenishing inventories of corn and / or soy could be the positive catalyst the industry desperately needs on the global demand front.