Fertilizer and Grain Merchandiser Stocks Fall on News of UN Facilitating Russia and Ukraine Exports

On May 18, fertilizer and grain merchandiser stocks under our coverage generally fell more than the broader market decline on the news of the United Nations' plan to facilitate grain and fertilizer exports from Russia, Ukraine, and Belarus. Since the Russia-Ukraine conflict began, Russia and Belarus have exported limited fertilizer, while Russia and Ukraine have stopped grain exports. With the U.S. backing the UN's plan, we think the exports will likely resume later this year for both grains and fertilizers. In turn, this will reduce the impact of the supply shocks that have led to multiyear high grain prices and record high fertilizer prices.