Nutrien Ltd. (NTR.TO)

Let the monthly rumors start. With an 800 lb gorilla entering the field, I expect some hedge funds to play around with the stock, especially during low trading volume months.

BHP said it was going ahead with its Jansen potash project, which is expected to cost $5.7 billion in the first phase, offering the company a route to growth in new "future-facing commodities".
The miner took a $1.3 billion charge for existing infrastructure spending on its potash asset, which analysts said could make it more attractive to any potential partner.
"Giving the go ahead to Jansen is not enough, they should do much more," said a top 20 investor who declined to be named. "They should create a partnership with Nutrien Ltd and even take it over."
The Canadian potash major is seen as an ideal partner to dilute BHP's risk and development costs. BHP says it is open to but not in need of a partner, while Nutrien has said that any tie-up with BHP is not its focus.

FCF going through the roof, but management won't elucidate their plans for capital allocation. No commitments, just wishy-washy statements.

@@@Ben Isaacson

Thank you very much and congrats on the beat and raise. A question for Mayo and Pedro. So you are going to generate $6 billion, %6.5 billion of EBITDA this year. And even if prices moderate a little bit, you will probably do something similar next year. And that's a lot of free cash flow to generate, especially considering you don't have any major capital projects. So in that context and rather than talking about your compete for capital philosophy, can you give us some actual goalpost in terms of what you have planned? How much debt reduction do you want to see over the next 18 months? You have a buyback authorization. Do you expect to be finished with that within a year from now? How did have you earmarked for M&A in retail, whether it's in the U.S. or Brazil? Thank you.

Pedro Farah

Yes. Ben, nice talking to you again. To your point, we will continue our disciplined capital allocation approach which would involve basically sustaining our assets and at this point, we could have guided for a little bit more expenditure as we were a little bit depressed in the past due to COVID restrictions that we couldn't do what we needed to do in our different facilities. We have increased dividends earlier this year and we are looking into the balance sheet now that we are above mid cycle prices in terms of opportunities to delever. That very much will depend on how much we will do. It will depend on how we look through the cycle and we would like to position ourselves to have flexibility in the future. So I don't have a specific number for you as we are looking at our various options for the future. But in terms of the compete for capital approach, as you mentioned, we do have options there too, both organically and inorganically and we already started to deploy that. You have seen us do some acquisitions in Brazil. We are also investing some of it on our ESG projects for nitrogen and we will continue to look at those in the future. And we are, as you pointed out, we can still have the NCIB option that we will be considering together with all the other ones. So it is a fluid environment here. So we are going to be analyzing our options and we will come back to you with more specific points as soon as we have them and we can tell you in more detail.

As I posted a month ago the Belarus sanctions are a big fat waste of time. A little bark and zero bite.

The penalties announced on Monday target Belaruskali OAO, which ships much of its products to China, India and Latin America, along with more than a dozen companies with ties to President Alexander Lukashenko. Yet Belarusian Potash Co., in which Belaruskali owns a 48% stake and which is the sole handler all of the country’s potash exports, wasn’t included in the sanctions list.
While some buyers may turn to other suppliers following the sanctions, China and India might still feel it’s safe to purchase from BPC, the company that signs export deals, according to VTB Capital. The U.S. issued licenses allowing counterparts to wind down transactions with Belaruskali -- or any entity in which it owns at least a 50% interest -- by Dec. 8, giving consumers time to find alternative supplies.

“The penalties against Belaruskali add negative sentiments for the global potash market, but the fact that BPC is not the subject of the sanctions may ease the situation,” said Elena Sakhnova, an analyst at VTB Capital.

BCS Global Markets analyst Kirill Chuyko also said it may be safe to continue dealings with BPC, as long as it’s not added to the sanctions list.

Retail fertilizer prices continue to move higher, led by two products -- Potash and DAP -- according to retailers contacted for the first week of July 2021.Potash was up 9% compared to last month and had an average price of $491/ton. Potash has pushed higher in recent weeks thanks to supply issues and increasing global demand.The other fertilizer that was significantly higher, which DTN designates #$%$ or more, is DAP. The phosphorus fertilizer w#$%$ more expensive compared to the prior month and now has an average price of $690/ton.The remaining six fertilizers saw just slight price increases.The average price for urea was up 4% at $549/ton.