Price Forecast:

Bullish Case: Strong demand for agricultural products and innovative practices could lead to a robust recovery in NTR prices. Increases in fertilizer usage driven by crop yield needs support this view.

Bearish Case: Regulatory pressures and rising input costs may challenge Nutrien's profitability. Current volatility suggests uncertainty in the market, leading to potential downward price action.

Potential Outcomes:

• 30%: Bullish momentum from increased agricultural demand.
• 40%: Regulatory challenges lead to operational costs, negatively impacting earnings.
• 20%: Supply chain disruptions impacting deliveries.
• 10%: Major breakthrough in sustainable fertilizers boosts market confidence.

Trading Oracle: Implement a bullish long volatility strategy via debit spreads, focusing on high implied volatility strikes. Buy NTR 50 calls and sell 52 calls targeting January expiration. The current implied volatility (around 30%) suggests a favorable risk/reward setup for capturing momentum in an improving market.

November 22, 2024