Four Fertilizer Income Investments to Purchase After Russia Agrees to Stop Blockade
By: Paul Dykewicz,
Four fertilizer income investments to purchase after Russia’s agreement to stop its blockade of grain and food shipments from Ukraine temporarily offer one of the first rays of hope in the region since Feb. 24 when President Vladimir Putin ordered more than 100,000 troops to invade his neighboring nation.
Russia’s sustained attack and its blockade of Black Sea ports in Ukraine worsened famine conditions in Africa, leading the United Nations (UN) and Turkey to broker a pact for ships to be allowed to leave the war-torn area under military escort, with the cargo inspected, to ensure only food, fertilizer or grain is carried, not any other commodities. The agreement would create a protected shipping corridor to help alleviate global food shortages for Ukraine’s customers who include some of the world’s poorest nations, such as Eritrea in Africa.
A problem is that corn, the key export since the agreement took effect on July 22, typically is used for animal feed or to produce biofuel ethanol rather than for human consumption. Implementation could aid food supply and reduce prices if shipments quicken, but Russia showed the pact’s vulnerability by firing missiles at Ukraine’s biggest seaport hours after formally consenting for grain, fertilizer and food to be transported from there.
Four Fertilizer Income Investments to Purchase Should Gain from Fragile Deal
The fragile shipping deal reveals the precariousness of any commitments from Russia due to its propensity to violate international law with acts that have been characterized as “war crimes” by independent observers based on documented evidence. After Russia invaded Ukraine at the direction of its President Vladimir Putin, the orders reportedly led to atrocities committed by his troops.
Russia’s unrelenting attacks against Ukraine, described by Putin as a “special military operation,” has shelled hospitals, schools, residential areas, churches, nuclear power plants, oil refineries, a theater used as a shelter, cultural sites and even a train transporting food for World Central Kitchen. Russia’s military attacks on civilians in Ukraine have led to reports of alleged war crimes committed by invading soldiers for raping, torturing, kidnapping and executing people who were trapped in territory seized by Putin’s army.
Putin’s perilous policies for his countrymen triggered economic sanctions enacted by many nations and companies that have objected to the former KGB agent orchestrating the invasion of his neighboring nation. The purpose of the sanctions is to restore peace in Ukraine, a country that prior to the attack on its sovereign borders and people, combined with Russia to produce 57% of sunflower seed, safflower and cotton seed oil, 26% of wheat and Meslin and 24% of barley worldwide.
Shipping Agreement Should Aid Four Fertilizer Income Investments to Purchase
Russia’s invasion of Ukraine by land, air and sea caused the European Union, the United States, Japan, South Korea, Australia and others to limit the attacking country’s exports and financial transactions. The nearly six-month transportation delay caused by Russia’s blockade of Black Sea ports is far from solved by the agreement, since the first cargo ship to carry crops from the Ukraine lost its initial buyer and is floating in the Mediterranean Sea seeking a new purchaser and destination for its load.
There also is an “incredible amount of uncertainty” with commodity prices, inflation, interest rates, energy prices and geopolitical situations that could flare up at any time, seasoned Wall Street veteran Bryan Perry warned subscribers of his Cash Machine investment newsletter. As these metrics become clear, Perry, who tracks commodity trading opportunities closely as the head of the Quick Income Trader, Breakout Options Alert, Premium Income Pro and Hi-Tech Trader advisory services, wrote that he would weigh adding to the number of holdings in his newsletter that offers a blended yield of 9%.
Paul Dykewicz interviews Bryan Perry, leader of the Cash Machine newsletter.
An all-time high of up to 49 million people in 46 countries could be at risk of falling into famine or famine-like conditions, a recent UN report warned. The needs are extreme in 20 “hunger hotspots” worldwide where heightened food prices, COVID-related conditions and violent conflicts are pushing populations toward hunger or starvation, according to the United States Institute of Peace.
In 2021, most of the 140 million people suffering acute hunger around the world lived in just 10 countries: Afghanistan, the Democratic Republic of the Congo (DRC), Ethiopia, Haiti, Nigeria, Pakistan, South Sudan, Sudan, Syria and Yemen. Now, 276 million people are struggling to find food, the UN reported.
Four Fertilizer Income Investments to Purchase Amid Alleged ‘War Crimes’
The United Nations General Assembly in New York held a rare emergency session on March 2 that voted to demand an immediate end to Russia’s infiltration of Ukraine. The UN motion, supported by 141 countries in the 193-member body, called for Russia to “immediately, completely and unconditionally withdraw all of its military forces from the territory of Ukraine.”
Another 35 nations abstained and only Russia, its invasion partner Belarus, North Korea, Eritrea and Syria voted no. Russia has shown no indication of pulling back from Ukraine. Instead, Putin and his comrades have talked about trying to push their invasion beyond the borders of Ukraine to other Central European countries, such as Poland.
“The territorial integrity and sovereignty of Ukraine must be respected in line with the UN Charter,” cautioned UN Secretary-General Antonio Guterres, following the vote.
Perry Picks Three of Four Fertilizer Income Investments to Purchase
Efforts to sway Putin to stop shelling Kyiv and other key cities in Ukraine, as well as resolve differences nonviolently through negotiations, have not succeeded. Despite heavy sanctions and “financial chokeholds” on Russia’s banking system, Putin and the Kremlin seem intent on taking full control of Ukraine and maintaining it as a non-NATO buffer nation between Russia and Europe, Perry said.
“The global reaction is one of shock and amazement that such nation-on-nation aggression could still take place in this day and age, but Putin’s incursions into Georgia, Crimea and Belarus show a clear pattern of his desire to rebuild Russia back to the pre-1991 split-up of the Soviet Union,” Perry wrote to his Cash Machine subscribers. “He is a man of tyrannical character and rules though fear and violence. Sadly, the current generation of young Ukrainians and Russians are bewildered this is all happening like something out of the 1979-1985 cold war when Russia invaded Afghanistan under sharp criticism from the West.”
Against this surreal backdrop, it is uncertain how the Ukraine situation will end, as well as the impact on global supply chains, since Russia remains a global powerhouse in commodities, Perry cautioned.
Four Fertilizer Income Investments to Purchase Could Profit from Putin’s Policies
Fertilizer manufacturers appear likely to profit from Russia’s attack against Ukraine, Perry said. While there may be “demand destruction” in the energy sector, there won’t be in the global food supply, he advised his Cash Machine subscribers.
Wheat, corn and soybean prices jumped since the full revelation of the attack on Ukraine by Russia, Perry continued. One of the big winners from pure demand and sanctions will be CF Industries Holdings, Inc. (NYSE: CF), a dividend-paying manufacturer and distributor of agricultural fertilizers, including ammonia.
However, the company, based in Deerfield, Illinois, a suburb of Chicago, also is facing increased distribution costs, particularly for transportation. Those extra expenses likely will be passed along to customers.
In addition, the expense of producing nitrogen fertilizers is highly dependent on the cost of natural gas, which is the principal raw material and primary fuel source used in ammonia production at the company’s manufacturing facilities. For many global producers, more than 70% of the total cost to produce ammonia is based on the expense of natural gas.
The cost of natural gas varies significantly between geographic locations. European customers may see their financial burden grow, since natural gas prices have been surging there and Russia has cut the export of that commodity in an apparent attempt to squeeze energy-needy nations into weakening their opposition to Putin’s invasion of Ukraine.
Chart courtesy of www.stockcharts.com
Another fan of CF Industries Holdings is Mark Skousen, PhD, who recently recommended it profitably in his Five Star Trader advisory service. Skousen follows commodities closely as the head of the Forecasts & Strategies investment newsletter, as well as additional trading services such as Fast Money Alert, Home Run Trader, Five Star Trader and TNT Trader.
Mark Skousen, a descendent of Benjamin Franklin and head of Forecasts & Strategies, meets with Paul Dykewicz.
Four Fertilizer Income Investments to Purchase Feature Nutrien
Nutrien Ltd. (NYSE: NTR), a dividend-paying Canadian fertilizer company based in Saskatoon, Saskatchewan, is the largest producer of potash and the third-largest maker of nitrogen fertilizer in the world. Its management said Nutrien will boost potash production if supply problems worsen in Russia and Belarus, the world’s second- and third-largest potash-producing countries, respectively, after Canada.
The economic sanctions imposed by the United States, the European Union and other countries against Russia may hurt the country’s export of natural gas, potash and nitrogen. Belarus, a puppet state of Russia, has joined the invasion of Ukraine and also must adjust to economic sanctions that have restricted its potash exports.
The decision by Putin to wage war against Ukraine further has raised concerns about wheat, corn and vegetable oil supply problems in the Black Sea region. The result has been increased world prices for such agricultural products.
Chart courtesy of www.stockcharts.com
CVR Partners LP Earns Berth Among Four Fertilizer Income Investments to Purchase
CVR Partners LP (NYSE: UAN), of Sugar Land, Texas, manufactures and provides nitrogen fertilizer products as a subsidiary of Coffeyville Resources, a unit of CVR Energy Inc. UAN, another recommendation of Perry, offers a 16.4% dividend yield that should entice income seekers.
The company’s nitrogen fertilizer manufacturing facility includes a 1,300-ton-per-day ammonia unit, a 3,000 ton-per-day urea ammonium nitrate (UAN) unit and a dual-train gasifier complex that can produce 89 million standard cubic feet of hydrogen per day. The UAN solution, produced by combining urea, nitric acid and ammonia, is a liquid fertilizer product with a nitrogen content that typically ranges from 28-32%.
UAN can be applied more uniformly than non-liquid forms of fertilizer. The solution also can be mixed with herbicides, pesticides and other nutrients to let farmers cut costs by applying several materials simultaneously rather than using separate applications.
Chart courtesy of www.stockcharts.com
Mosaic Rounds out Four Fertilizer Income Investments to Purchase
Mosaic Company (NYSE: MOS), a dividend-paying Fortune 500 company headquartered in Tampa, Florida, mines phosphate, potash and urea. The largest U.S. producer of potash and phosphate fertilizer, Mosaic operates through segments such as international distribution and Mosaic Fertilizantes.
Russia is a big producer of potash, a key crop nutrient that is used in agricultural production. Robust growth in the company’s year-over-year earnings per share (EPS) and rising prices for fertilizer from constricted supply out of Russia led to a surge in the value of MOS call options that recently were recommended by Jim Woods in his High Velocity Options trading service.
Woods recommended in March that his in High Velocity Options that his subscribers take profits of more than 150% in just one week. That triple-digit-percentage gain exemplifies how options can be a huge money maker.
Chart courtesy of www.stockcharts.com
Pension Fund Chair Champions Agricultural Fund
Despite the evils of war, investors can profit from the jump in agriculture prices through the futures markets. Instead of buying futures directly, investors could invest in diversified agricultural commodities through Invesco DB Agriculture (DBA), a non-dividend-paying exchange-traded fund, said Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter.
Chart courtesy of www.stockcharts.com
Ukraine’s democratically elected President Volodymyr Zelensky has been trying to inspire his countrymen since Russia’s Feb. 24 invasion to repel the attackers of their nation courageously. He also has successfully obtained guns, advanced weapons and ammunition for defenders of his country’s freedom by reaching out to their allies around the world. The cost in life and limb has been high for the Ukrainians, along with the Russians, whose troops of consisted of many conscripts, who in some cases have objected to fighting against their country’s neighbors.
While many commodities prices have already increased substantially, there may still be more such pressure in the months ahead with fertilizer due to what is happening in Ukraine. Oil, natural gas, grains and some metals may incur further price hikes.
U.S. COVID Deaths Near 1.037 Million
COVID-19 cases and deaths have interfered with supply chains for products such as fertilizer. As a result, investors should monitor the latest trends.
U.S. COVID-19 deaths climbed for the fourth consecutive week by more than 3,000 to 1,036,589 as of Aug. 12, according to Johns Hopkins University. The past week showed the biggest rise in the last month with more than 4,000 deaths. Cases in the United States rose more than 750,000 in the past week to reach 92,781,519, showing a slight decline in the rate of increase that had risen about 900,000 for the prior three weeks. America still holds the dreaded distinction as the country with the largest number of COVID-19 deaths and cases.
Worldwide COVID-19 deaths in the last week surged more than 8,300, totaling 6,432,134 as of Aug. 12, according to Johns Hopkins. Global COVID-19 cases rose more than 7.0 million in the past week, reaching 588,916,540 by Aug. 10.
Roughly 78.9% of the U.S. population, or 261,981,612, have received at least one dose of a COVID-19 vaccine, as of Aug. 10, the CDC reported. Fully vaccinated people total 223,457,170, or 67.3%, of America’s population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to 107.9 million people.
The four fertilizer income investments to purchase offer an avenue to profit from Russia’s continued assault on Ukraine’s pre-war economic role as an agricultural power. Despite the highest inflation in 42 years, a second consecutive 0.75% Fed rate hike and other rate increases that may follow, the outlook for the four fertilizer income investments to purchase is up as Russia keeps attacking Ukraine and its grain supply, while not yet proving it will allow the transport of food and fertilizer at the levels needed to meet global demand.