CTVA

Global food prices are at their highest since 2022, driven by a collapse in Brazilian sugar supply and disrupted Russia-Ukraine trade. Farmers worldwide are racing to restore yields. That speeds up demand for the fertilizer and crop chemicals sold by Corteva, CF Industries and Mosaic.

Iran missiles struck a US Navy vessel near Hormuz. Oil is up 2.8% to $111 Brent but the real trade is the gas-to-fertilizer-to-food inflation chain. Middle East LNG disruption spikes ammonia/urea production costs globally while North American producers with cheap Appalachian gas gain massive margin expansion. Long large-cap North American nitrogen fertilizer producers.

Brent surged 7% on Iran military escalation fears, with Hormuz disruption risk now being priced in. The hidden trade isn't oil — it's fertilizer. Gulf LNG disruption would crater ammonia supply from Qatar and UAE, tightening global nitrogen markets and benefiting North American nitrogen fertilizer producers insulated from Gulf gas prices. Long large-cap Canadian and US nitrogen fertilizer names.

Hormuz freeze cuts Middle East gas/naphtha feedstocks for fertilizer, tightening global urea and ammonia supply. North American fertilizer producers using domestic Henry Hub gas gain massive cost advantage as global rivals face feedstock disruption. Long North American large-cap fertilizer producers with domestic gas inputs.

Iran-linked oil shock pushes WTI to $98, but the overlooked transmission is natural gas → fertilizer cost surge → supply curtailment → tight ag input markets. With global fertilizer supply already constrained post-Russia/Ukraine, long large-cap nitrogen and potash producers is the consensus-missed trade.