Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Fertilizer Outlook and Technology Conference 2010
23 slides from Mosaic Company (the)'s conference presentation, Nov 17, 2010
Slide 1: Near Term Potash Outlook: Demand Pull Pressure (Again)
Near Term Potash Outlook Demand Pull Pressure (Again) Fertilizer Outlook and Technology Conference Savannah, GA November 17, 2010 Dr. Michael R. Rahm Vice President, Market and Strategic Analysis The Mosaic Company Exhibit 99.1
Slide 2: Topics
Topics • Powerful Demand Drivers – Agricultural Commodity Prices – Speculative Exuberance or Fundamental Strength? • Increasingly Tight Potash Fundamentals – Global Shipments – North American Demand – “Perfect Storm” Domestic Fall Season – Global and North American Production – North American Offsho
Slide 3: Strong price signals – an acreage donnybrook shaping up next spring
Strong price signals – an acreage donnybrook shaping up next spring Daily Close of New Crop Options January 1 to November 12, 2010 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 Jan Apr Jul Oct $ BU New Crop Corn Prices Dec 2011 Dec 2012 Source: CBOT 9.00 9.50 10.00 10.50 11.00 11.50 12.00 12.50 13.00
Slide 4: And not just corn
And not just corn Daily Close of Nearby Futures Contract CTS/LB Sugar (#11) Price Source: ICE CTS/LB Cotton Price Source: ICE RM/ Tonne Palm Oil Price Source: Kuala Lumpur Exchange
Slide 5: Speculative exuberance?
Speculative exuberance? -900,000 -800,000 -700,000 -600,000 -500,000 -400,000 -300,000 -200,000 -100,000 100,000 200,000 300,000 400,000 500,000 600,000 1/3/2006 7/3/2006 1/3/2007 7/3/2007 1/3/2008 7/3/2008 1/3/2009 7/3/2009 1/3/2010 7/3/2010 Contracts Source: CFTC Commitments of Traders Weekly Repo
Slide 6: Fundamental strength? World corn stocks
Fundamental strength? Mil Tonnes World Corn Stocks China Rest of World Source: USDA
Slide 7: Fundamental strength? U.S. corn stocks
Key Assumptions for 2011/12 Planted acreage: 92.5 million Trend Yield: 163.2 bu acre Total use: 13.55 bil bu Fundamental strength? 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Pct of Use Bil Bu U.S. Corn Stocks Stocks Pct of Use Source: USDA and Mosaic
Slide 8: Fundamental strength? World wheat stocks
Fundamental strength? MilTonnes World Wheat Stocks China+India Rest of World Source: USDA
Slide 9: Increasingly Tight Potash Fundamentals
Increasingly Tight Potash Fundamentals
Slide 10: Global shipments are back on track
Global shipments are back on track Source: Fertecon and Mosaic (Forecast Range for 2010 and 2011) 10F 11F Mil Tonnes KCL World MOP Shipments
Slide 11: Recovery in most major import markets
Recovery in most major import markets 10F 11F Mil Tonnes KCL China Net MOP Import Demand 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 10F 11F Mil Tonnes KCL India MOP Import Demand 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 10F 11F Mil Tonnes KCL Other Asia MOP Import Demand 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 10F 11F Mil
Slide 12: NA exports projected to increase 34%
NA exports projected to increase 34% 11F Mil Tons KCL North American MOP Exports U.S. Canada Source: IPNI and Mosaic Fertilizer Year Ending June 30
Slide 13: NA exports up 83% FY 2010/11 YTD
NA exports up 83% FY 2010/11 YTD 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Mil Tons KCL North American MOP Exports Source: IPNI
Slide 14: NA shipments forecast to climb another 24%
NA shipments forecast to climb another 24% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 11F Mil Tons KCL Mil Tons K O North American Potash Use and MOP Shipments Ag Use Total Shipments Source: IPNI and Mosaic Fertilizer Year Ending June 30
Slide 15: NA shipments up 125% FY 2010/11 YTD
NA shipments up 125% FY 2010/11 YTD 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Mil Tons KCL North American MOP Domestic Shipments Source: IPNI
Slide 16: U.S. rates expected to return to normal
U.S. rates expected to return to normal Index K Application Rate on Corn Index K Application Rate on Soybean Index K Application Rate on Wheat Estimated national average application rates Source: USDA and Mosaic Index: 10-year average 1995-2004 = 100
Slide 17: “Perfect storm” fall application season in NA
“Perfect storm” fall application season in NA Source: IPNI, US Department of Commerce and Mosaic 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Jul-Dec Jan-Jun Mil Tons KCL Implied North American MOP Shipments 5-Yr Min-Max Range 2010/11 5-Yr Average
Slide 18: Global production climbs in 2010
Global production climbs in 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Mil Tonnes KCL Global MOP Estimated Production Source: Fertecon, Company reports and Mosaic
Slide 19: NA production up 76% FY 2010/11 YTD
NA production up 76% FY 2010/11 YTD 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Mil Tons KCL North American MOP Production Source: IPNI
Slide 20: Record NA imports expected in 2010/11
Record NA imports expected in 2010/11 0.0 0.2 0.4 0.6 0.8 1.0 1.2 11F Mil Tons KCL North American MOP Imports Source: IPNI, USDOC, and Mosaic Fertilizer Year Ending June 30
Slide 21: Demand pulls down NA producer inventories
Demand pulls down NA producer inventories 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Mil Tons KCL North American MOP Producer Stocks Source: IPNI
Slide 22: Bottom Line
Bottom Line • Potash demand drivers are strong – High agricultural commodity prices – Strong speculative interest – But solid underlying agricultural fundamentals – Positive farm economics/income worldwide – Lean K distribution pipeline – Low K levels in soils • Potash shipments are back on track –
Slide 23: Thank You!
Near Term Potash Outlook Demand Pull Pressure (Again) Fertilizer Outlook and Technology Conference Savannah, GA November 17, 2010 Dr. Michael R. Rahm Vice President, Market and Strategic Analysis The Mosaic Company Thank You!
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