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Fertilizer Companies Look To Follow The Recent Jump In Soft Commodities

By Michele SchneiderStock MarketsMay 18, 2022 12:57AM ET
www.investing.com/analysis/fertilizer-companies-look-to-follow-the-recent-jump-in-soft-commodities-200624441
Fertilizer Companies Look To Follow The Recent Jump In Soft Commodities
By Michele Schneider   |  May 18, 2022 12:57AM ET
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So far, this week has been huge for wheat via Teucrium Wheat (NYSE:WEAT) and sugar via Teucrium Sugar (NYSE:CANE), with both gapping up on Monday and continuing higher.

Soft commodities have been on the move as supply chain issues involving China’s COVID cases spiking and Ukraine cutting its wheat output have rapidly increased prices.

Many are realizing how delicate the food trade is and how everything looks to be leading back to increasing inflation. Now countries are beginning to cut exports as they focus on their populations' demands first.

WEAT & CANE Daily Charts
WEAT & CANE Daily Charts

As it becomes more important to begin planting for lost supply, fertilizers have become less easy to obtain. With that said, from a trading perspective, not only can we watch for entries into soft commodities, but we should also track fertilizer companies.

Two fertilizer-related companies we’re watching are Mosaic Company (NYSE:MOS), and CF Industries (NYSE:CF).

Mosaic Company (MOS), & CF Industries (CF) Daily Charts
Mosaic Company (MOS), & CF Industries (CF) Daily Charts

At this point, CF will need to break to new highs, while MOS could be watched for a close over the 50-DMA at $65.88. We could also look for a bullish phase confirmation with 2 closes over the 50-DMA in MOS.

With that said, when it comes to the overall market, the major indices are heading into resistance and will need to summon more buying to get through overhead sellers.

Specifically watching the S&P 500 (SPY), it will need to clear and hold over $410 next if the rally is to continue.

If a hard wall of selling is hit in the SPY, stay cautious as even fertilizer companies will get hurt if the market reverses. However, we should keep these symbols on watch since inflation and food prices don’t look to be settling down anytime soon.

  • S&P 500 (SPY) 410 resistance.
  • Russell 2000 (IWM) Watch to hold over 179.27.
  • Dow (DIA) 325.25 the 10-DMA to hold.
  • NASDAQ (QQQ303.93 the 10-DMA to hold.
  • KRE (Regional Banks) Support at 58.75.
  • SMH (Semiconductors) 248.17 next resistance.
  • IYT (Transportation) 235-239 resistance.
  • IBB (Biotechnology) 115-118 resistance area.
  • XRT (Retail) 70 resistance.
  • GLD (Gold) 171.48 the 200-DMA to clear.
  • USO (Oil) Failed to hold 82.41. This is a pivotal price area.
  • DBA (Agriculture) Like soft commodities, but don’t see an entry spot.
Fertilizer Companies Look To Follow The Recent Jump In Soft Commodities
 

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Fertilizer Companies Look To Follow The Recent Jump In Soft Commodities

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Comments (1)
Jeff Page
Jeff Page May 19, 2022 8:31AM ET
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Corn 🤯. Short field (Ethanol) takes up 40% of our plantable corn acreage and is a Nitrogen hog (CF). Washington is now "rethinking" the increase from 10% - 15% as Ethanol is more expensive and less efficient. Some of these soft commodities have been depressed by the strong dollar. Can you make a case for prices if the dollar drops back to 1.00? Where would prices settle?
 
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