Wolfe Research finds improving sentiment in agriculture sector

Investing.com -- Wolfe Research said recent channel checks across agricultural wholesalers, cooperatives, retailers and farmers in more than five countries showed a slightly more constructive tone compared to a few weeks ago, driven by rising commodity prices.

The firm conducted checks with agricultural wholesalers, retailers and farmers covering roughly half of U.S. acres. The agricultural community showed noticeably improving sentiment over the past week in the U.S. and Brazil due to rising soft commodity prices versus June lows, the firm said.

Current price levels "need to hold" to make a difference for fall applications, crop protection price discipline and seed order books, according to the research. The U.S. agricultural community remains far from bullish, but the recent tone change to "very cautious optimism" should lead to better fall activity versus prior fears, Wolfe said.

Farmers expressed frustration regarding lack of U.S. policy improvements on biofuels, China trade and conflicts, while retailers and others shared more optimism, particularly in Brazil and Europe. Feedback on the cause of lower U.S. yield outlook was mixed, with most attributing it to both adverse weather and suboptimal input applications.

For U.S. fall fertilizer applications, preliminary evidence suggests farmers will use recent price rallies to monetize inventory, creating a rationale to purchase fall inputs. Affordability hurdles remain evident on phosphates, while potash is stable at worst and nitrogen is back to healthy levels following U.S. summer fill offers well below international parity.

Most distributors said NOLA DAP prices need to fall approximately $150-200 per short ton from a roughly $800 per short ton baseline to spur demand resurgence. Any price point below $600 per short ton should lead to fertility bank replenishment, at levels not seen since February 2025.

Major seed companies including Pioneer, Dekalb and Asgrow plan to release U.S. seed price cards in the coming days, with corn price expectations in the 1% to 2% range and soy flat to roughly 1%, which is fairly normal. One major distributor said recent soft commodity rallies "couldn't have come at a better time" for preliminary 2027 order books.

Farmers view Bayer's Vyconic and Preceon products as a "leveling of the playing field" versus E3 and Pioneer hybrids and trait packages, rather than revolutionary launches, according to most checks.

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