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® July 2018 Agricultural Outlook The June Meltdown and a Tortoise and Hare Tale A combination of factors produced a meltdown of key crop prices in June. The herd of fund managers, spooked by the likelihood of an all-out USA-China trade war, an ideal start to the North American growing season, and a stronger dollar, stampeded to liquidate large long positions. Our assessment is that markets overreacted to these developments. Funds will have fun with trading algorithms, but global grain and oilseed demand remains solid, China is projected to import more than 100 million tonnes of soybeans in 2018/19, hot and dry weather has shriveled the wheat crop in several countries, and it looks a bit premature to trade away all of the U.S. weather premium. Global grain and oilseed stockpiles no doubt have shrunk in 2017/18, and absent a way-off-the-charts global harvest this year, piles of most crops likely will contract again in 2018/19. And, any production hiccup would pull down inventories to the lowest level in five years. Our review of global grain and oilseed fundamentals reminded us of the Aesop fable about the race between the tortoise and hare. The moral of this story is that slow and steady wins the race. Well, we think it is a particularly relevant lesson. Steady tortoise-like demand growth is overtaking the last hare-like sprint in supply. Despite all of the noise in agricultural commodity markets today, the hare at some point in the near future will have to wake up and once again sprint to catch the tortoise. Market Mosaic is a newsletter published for our customers, suppliers and stakeholders by the The June Meltdown Market and Strategic Analysis group of The Mosaic Company. This issue examines the near term The charts illustrate the meltdown of crop prices in June. The November soybean outlook for agricultural commodity markets. contract closed at $8.80 per bushel on June 29, off 16% or $1.74 per bushel in just Note that estimates for the 2017/18 crop year are 24 trading sessions from its May 25 peak of $10.54. The December 2018 corn labeled 17E on the charts. These estimates are well contract ended the month at $3.71 per bushel, down 13% or 55 cents per bushel baked. Northern Hemisphere crops were harvested in 2017 and nearly all Southern Hemisphere crops from $4.27 on May 23. Even with estimates of a smaller 2018/19 crop in several are now safely in bins. Demand surprises also countries, the new crop price of HRW wheat closed at $4.71 per bushel on June 29, are unlikely given that the 2017/18 crop year has off 17% or 97 cents from its May 3 peak of $5.68. ended or will end in a couple of months.. Projections for 2018/19 are shown as gray bars New Crop Soybean Price New Crop Corn Price New Crop HRW Wheat Price and labeled 18F on the charts. These are very $ BU Daily Close Nov 18 Contract $ BU Daily Close Dec 18 Contract $ BU Daily Close Jul 18 Contract preliminary estimates based largely on trend 10.75 4.30 6.25 forecasts. Production and stock projections could differ widely given that most Northern Hemisphere 10.50 4.20 6.00 crops are at a critical stage of development and that Southern Hemisphere planting is several months off. 10.25 4.10 5.75 10.00 4.00 5.50 Michael R. Rahm 9.75 3.90 5.25 Vice President, Market and Strategic Analysis 5.00 Andy J. Jung 9.50 3.80 Sr. Director, Market and Strategic Analysisr 9.25 3.70 4.75 Chris Rodengen 9.00 3.60 4.50 Sr. Market Analyst 8.75 3.50 4.25 Mike Good Sep-17 Dec-17 Mar-18 Jun-18 Sep-17 Dec-17 Mar-18 Jun-18 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Database Analyst Source: CME – continued inside
Commodity fund managers had built record or near-record Bil Tonnes World Grain and Oilseed Production and Use short positions in all three major crops at the end of 2017. The 3.4 combination of several developments including a large stock build Source: USDA 3.2 following the monster harvest of 2016/17, another big Northern Hemisphere harvest in the fall of 2017, and macroeconomic 3.0 factors such as a weaker dollar fueled the bearish sentiment. 2.8 However, the emergence of hot and dry conditions in Argentina, the U.S. Southern Plains, parts of Europe, and the Black Sea 2.6 region coupled with continued strong demand and a view that 2.4 commodities were back in favor caused fund managers to quickly 2.2 build large long positions during the first few months of this year. The escalating threat of an all-out trade war, an ideal start to the U.S. 2.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E 18F growing season (as evidenced by outstanding early crop condition Crop Year Beginning in scores), and a stronger dollar resulted in a rapid liquidation of long Production Stoop 1 (2.2) Stoop 2 (2.4) positions. For example, managed funds were net long 202,427 Stoop 3 (2.7) Stoop 4 (3.1) Use corn contracts (or 1.01 billion bushels) as recently as May 29. shows three big step-ups in production following price spikes in Less than one month later, funds reported a net short position of 2004, 2008 and 2012. For example, farmers had never harvested 60,319 contracts (or 302 million bushels) on June 26. more than 2.8 billion tonnes of these crops prior to 2013, but production has averaged nearly 3.1 billion tonnes per year since 1000 Contracts Net Position of Managed Funds the 2012 drought and price spike, a step-up of 15% from the prior 300 250 five-year stoop. 200 Farmers bring additional land into production and apply more 150 100 technology in the form of higher quality seeds, better plant 50 nutrition, improved equipment, and more advanced cropping 0 practices when prices increase. For example, harvested area for -50 these crops averaged 942 million hectares per year from 2013 to -100 2017, an increase of 4% or 36 million hectares from the average -150 for the previous five years – an increase greater than current -200 Source: CFTC -250 harvested area in Argentina. The average yield also increased Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 more than 9% from 2.98 tonnes per hectare from 2008 to 2012 Corn Soybeans Wheat to 3.26 during the last five years. The Tortoise and Hare Race The Tortoise is Pulling Ahead in 2017/18 Global grain and oilseed use has increased at a compound The tortoise is pulling ahead of the hare this year. USDA estimates annual growth rate of 2.2% since the turn of the century. Like for the 2017/18 crop year released on June 12 show that global the tortoise, demand has advanced at a moderate and steady grain and oilseed demand will exceed supply for the first time pace. In fact, year-over-year percentage changes ranged from a since 2012/13. Demand is projected to increase 1.8% to 3.15 low of 0.3% in 2012/13 to a high of 4.6% in 2013/14. The low billion tonnes while production is pegged at 3.13 billion, a drop of rate occurred after the severe drought in 2012 and corresponding 1.6% from the record-smashing harvest of 3.19 billion in 2016/17. price fly-ups that were required to allocate limited supplies to their As a result, after shooting up during the last four years, global grain highest valued uses. Use surged the following year as a rebound and oilseed inventories are projected to decline 23 million tonnes in production and more moderate prices unleashed large pent-up to 745 million and the stocks-to-use percentage is expected to demand. drop 110 basis points to 23.7% by the end of 2017/18. Global production of the 16 leading grain and oilseed crops also What is even more significant is that all of the inventory drawdown has increased at a compound annual growth rate of 2.2% during is outside China. Chinese grain and oilseed stocks are less visible this period. However, like the hare, gains have come in sprints and typically not a key driver of crop prices – not to mention following run-ups in agricultural commodity prices. The chart that inventory estimates are closely guarded state secrets and private guesstimates vary widely and are revised frequently. The chart shows that inventories outside China are projected to drop 24 million tonnes to 422 million and that the stocks-to-use percentage is expected to decline 130 basis points to 17.1% by the end of 2017/18. “Steady tortoise-like demand growth is overtaking the last hare-like sprint in supply. At some point, the hare will have to wake up and once again sprint to catch the tortoise.” - Dr. Michael R. Rahm
Mil Tonnes World Grain and Oilseed Stocks Mil Tonnes Argentina Corn Production MT HA Mil Tonnes Brazil Corn Production MT HA 850 Source: USDA and Mosaic 45 9.0 100 6.0 800 Source: USDA Source: USDA 750 40 8.5 90 5.5 700 650 35 8.0 80 5.0 600 550 30 7.5 70 4.5 500 25 7.0 60 4.0 450 400 20 6.5 50 3.5 350 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 15 6.0 40 3.0 Actual Mosaic 2018/19 Range Mosaic Likely USDA 10 5.5 30 2.5 This chart also highlights that the stocks-to-use percentage has 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F ranged from about 16% to 19% since 2000. Crop prices have Crop Year Beginning In Crop Year Beginning In increased when the percentage has dropped to the low end of the Production Average Yield Production Average Yield range as it did in 2003/04, 2007/08, and 2012/13. Prices have Soybeans account for another 21% of the projected decline in decreased when the percentage has moved to the high end of the grain and oilseed stocks outside China this year. The latest USDA range. estimates indicate that stocks will decline 5 million tonnes to 72 Mil Tonnes World Less China Grain and Oilseed Stocks Percent million or 31% of projected use by the end of 2017/18. Demand 450 22% Source: USDA 425 21% is forecast to increase 2.6% this year, and record harvests in the 400 20% United States and Brazil were not enough to make up for the plunge 375 19% in Argentine output this year. 350 18% 325 17% Mil Tonnes World Less China Soybean Stocks Percent Mil Tonnes World Less China Soybean Production 300 16% 80 35.0% 350 275 15% Source: USDA Source: USDA 250 14% 70 32.5% 300 225 13% 60 30.0% 250 200 12% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F Crop Year Beginning in 50 27.5% 200 Stocks S:U Percent Low High 40 25.0% Of the 24 million tonne projected drawdown of grain and oilseed 150 inventories outside China this year, the three big crops – corn, wheat 30 22.5% 100 and soybeans -- account for 82% of the drop, and two countries 20 20.0% -- Argentina and Brazil -- account for 78% of the decline. A severe 50 drought shriveled the Argentine corn and soybean crops this year, 10 17.5% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 0 and a late-season dry spell has reduced estimates of Brazil’s second 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F Crop Year Beginning in Crop Year Beginning in crop or Safrinha corn harvest. Stocks S:U Percent USA Brazil Argentina Other Soybeans have captured most of the recent headlines due to the Argentine drought and escalating threats of a trade war, but corn In Argentina, the main soybean and corn producing region accounts for nearly 60% of the projected drawdown of grain and experienced the worst drought since 2008/09. The USDA estimates oilseed inventories outside China this year. The June 12 USDA that production will plummet 20.8 million tonnes to 37.0 million estimates indicate that corn stocks will decline 14 million tonnes to this year. End-June estimates from the Rosario Board of Trade, the 113 million or 13.7% of projected use by the end of 2017/18. The Buenos Aires Grain Exchange and private forecasters are even lower projected decline is due to a 2.3% increase in demand coupled with a drop in production from sky-high records last year. The USDA Mil Tonnes Argentina Soybean Production MT HA estimates that production outside China will drop 40 million tonnes 65 3.4 in 2017/18 with the United States, Brazil and Argentina accounting Source: USDA 60 3.2 for 88% of the decline. 55 3.0 Mil Tonnes World Less China Corn Stocks Percent Mil Tonnes World Less China Corn Production 50 2.8 130 17% 900 Source: USDA Source: USDA 120 16% 800 45 2.6 700 110 15% 40 2.4 600 100 14% 500 35 2.2 90 13% 400 30 2.0 80 12% 300 70 11% 25 1.8 200 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 60 10% 100 Crop Year Beginning In 50 9% 0 Production Average Yield 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E 18F Crop Year Beginning in Crop Year Beginning in Stocks S:U Percent USA Brazil Argentina Other
® in the 35 to 36 million tonne range. Inventories at the end of 2017/18 are forecast to shrink 8.1 million tonnes to 28.2 million, down from a record 36.2 million a year earlier. Wheat accounts for just 3% of the projected decline in grain and grain and oilseed inventories drop 25 million tonnes to 720 oilseed inventories outside China this year. Demand is projected million by the end of the 2018/19 crop year (the gold square). to increase 1.4% or more than 8 million tonnes, but supply gains At the risk of being labeled a two-handed economist, we ran our were about the same even though some regions such as North farming-with-spreadsheets enterprise to estimate the extreme America and Australia produced much smaller crops while other outcomes. The high end of the range or a “farm crisis” scenario regions such as the former Soviet Union (FSU), India and Pakistan assumes that: 1) harvested area increases to 948 million hectares, reaped record harvests last year. As a result, global inventories 2) the average yield jumps to 3.46 tonnes per hectare (equal to are projected to decline only 0.7 million tonnes in 2017/18. The trend plus the largest positive deviation from trend since 2000), 2018/19 crop year is shaping up to be a much different story, and 3) demand increases at a bit slower pace of just 1.5%. In this however. scenario, production climbs to 3.28 billion tonnes and stocks build Mil Tonnes World Less China Wheat Stocks Percent Mil Tonnes World Less China Wheat Production 72 million tonnes to a record 817 million. 650 150 30% Source: USDA Source: USDA 600 The low end of the range or a “food crisis” scenario assumes that: 140 28% 550 1) harvested area stays flat at 943 million hectares, 2) the average 130 26% 500 450 yield declines to 3.26 tonnes per hectare (equal to trend less the 120 24% 400 350 largest negative deviation from trend), and 3) demand increases 110 22% 300 at a more robust rate of 2.0%. In this case, production drops to 100 20% 250 200 3.08 billion tonnes and stocks are pulled down 145 million tonnes 90 18% 150 to just 600 million. 80 16% 100 50 70 14% 0 There clearly is a wide range of potential outcomes in 2018/19. 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E18F 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E 18F Crop Year Beginning in Crop Year Beginning in The USDA estimates released on June 12 no doubt will get revised Stocks S:U Percent NA Russia + Ukraine Australia Other but they at least provide a starting point to handicap the 2018/19 race. If we again exclude China from the analysis, USDA projects The Tortoise Likely Will Stretch Its Lead in 2018/19 that inventories will decrease another 47 million tonnes to 375 Preliminary forecasts indicate that the tortoise likely will stretch million, and the stocks-to-use percentage will drop to 15.0%, just its lead over the hare during the 2018/19 crop year. Although 10 basis points greater than the previous low of 14.9% at the end ending inventories could vary widely depending on the whims of of the 2003/04 crop year. Mother Nature, initial USDA production and use projections result Wheat accounts for nearly 40% of the projected drop in inventories in another drop in global grain and oilseed stocks in 2018/19. outside China in 2018/19. Of the three major crops, estimates of On the demand side of the equation, the latest USDA estimates indicate that global grain and oilseed use will increase a moderate 1.6% or 51 million tonnes to 3.20 billion in 2018/19. This is the first time that global use has breached the 3.20 billion tonne mark, and the projected gain of 51 million tonnes is almost 20% greater than an average Australian harvest of these crops. On the supply side, USDA assumes that harvested area of these 16 crops will increase to a record 950 million hectares in 2018/19, up from 943 million this year, and that the average yield will tick up to 3.33 tonnes per hectare from 3.32 in 2017/18. As a result, global production is projected to increase from 3.13 billion tonnes in 2017/18 to 3.16 billion in 2018/19. That still is shy of the 2016/17 record of 3.19 billion tonnes. The world grain and oilseed stocks chart illustrates the wide range of potential outcomes in 2018/19. The latest UDSA forecasts result in a 54 million tonne drop in global inventories to 692 million tonnes by the end 2018/19 (the red triangle). We operate a farming-with-spreadsheets enterprise in our shop that is much less work than real farming and somewhat useful to illustrate the wide range of potential outcomes for next year. Our likely scenario assumes that: 1) harvested area increases to 946 million hectares, 2) the average yield climbs to 3.38 tonnes per hectare (the trend using 2000-17 yields), and 3) demand increases at a slightly faster pace of 1.75%. In this case, global
the 2018/19 wheat crop are pretty well baked given that the United States is forecast to decline as a result of another drop crop year in many countries began on June 1 and combines in acreage and the assumption of a trend yield that is less than are rolling in many parts of the Northern Hemisphere. The the 2017/18 record. As a result, U.S. inventories are projected latest USDA estimates indicate that stocks will decline 18 million to drop 13 million tonnes or 525 million bushels next year. tonnes to 128 million or 20.3% of projected use, the lowest The table shows the USDA’s latest U.S. corn balance sheet as percentage since 2007/08. The projected drop is due to a well as our likely, bullish and bearish scenarios for 2018/19. The modest 3 million tonne increase in use and a 13 million tonne June 29 Acreage report put planted area at 89.1 million acres, drop in production, the first decline since 2012/13. Several key up from the Prospective Plantings estimate of 88.0 million but exporting regions experienced hot and dry growing conditions down from 90.2 million last year. The U.S. crop is off to a great this year, and the USDA likely will revise down crop estimates start with more than three-quarters of the crop rated good or for several countries in future reports. The combined harvest in excellent on July 1. If rain makes grain and if July and August Russia and Ukraine currently is projected to decline 17 million don’t turn extremely hot and dry, then the U.S. balance sheet tonnes from the record last year, and both the United States likely will tilt toward the bearish scenario. In this case, U.S. corn and Australia are expected to produce below average crops due stocks likely will stay unchanged or even climb back to the high to severe drought conditions in the U.S. Southern Plains and level of 2016/17. Stay tuned – another summer of whiskey and Eastern Australia. The Weather Channel for corn traders. The table shows the USDA’s latest U.S. wheat balance sheet as Soybeans account for just 8% of the projected drop in grain well as likely, bullish and bearish scenarios for 2018/19 from and oilseed inventories outside China in 2018/19. Stocks are our farming-with-spreadsheets enterprise. USDA estimates forecast to decline 4 million tonnes to 68 million or 28.3% of released on June 12 and adjusted for the June 29 acreage projected use. Soybean demand remains a good story. Global report indicate that U.S. stocks will decline 105 million bushels use outside China is projected to increase 2.6% or 6 million or nearly 4 million tonnes in 2018/19. Based on minor tweaks tonnes (and Chinese use is projected to increase 8% or 8 in production and use, each of our scenarios shows a drop in million tonnes with imports growing another 5 million tonnes). U.S. inventories in 2018/19. Production, however, is expected to keep pace with demand. Corn accounts for another 40% of the projected drop in grain The USDA projects that production outside China will increase and oilseed inventories outside China in 2018/19. Stocks are almost 19 million tonnes to a record 341 million in 2018/19 due forecast to decline 19 million tonnes to 94 million or just 11.3% to an expected to rebound in Argentina and near record output of projected use. The agency projects that the 2018/19 harvest in both the United States and Brazil. will increase more than 8 million tonnes and rank as the second The table shows the USDA’s latest U.S. soybean balance sheet largest on record. Production in Brazil and Argentina is projected along with our likely, bullish and bearish scenarios for 2018/19. to rebound close to the record of 2016/17, but output in the
The key take-away is that the U.S. balance sheet likely will snug In big round numbers, China likely will burn around 50 billion a bit next year, but the supply and demand balance is extremely gallons of gasoline by the time the initiative is fully implemented sensitive to relatively small changes in production or use. Our in 2020. China produces about 750 million gallons of ethanol likely scenario includes the June 29 USDA acreage estimate of today, so the incremental production of 4.0 to 4.5 billion gallons 89.6 million acres, up from the Prospective Plantings estimate eventually will require an additional 35 to 40 million tonnes of of 89.0 million acres but down from 90.1 million last year. corn production somewhere, assuming nearly all of the increase Based on recent acreage estimates and current crop condition is from corn-based ethanol. China will need to grow or import scores, the U.S. balance sheet also tilts to the bearish scenario more corn after stocks are depleted or import ethanol to meet at this time. this requirement. Will the Tortoise Pick Up Its Pace? In Brazil, the biodiesel blending mandate was increased from 8% to 10% on March 1. The local vegetable oils industry association Two important demand variables to watch during the next few estimates that the increase will boost the annual soybean crush years are new biofuels initiatives in China and Brazil. These 4.0 million tonnes. RenovBio, the federal program to increase initiatives are not expected to provide as big of a demand boost biofuels use, seeks to double ethanol use by 2030. Corn-based as U.S. biofuels programs during the last decade, but their ethanol is expected to capture a large chuck of this growth, combined impact could be significant. So the tortoise could especially in the Midwest region that produces increasingly pick up its pace. large corn surpluses. The president of the corn-based ethanol China announced last year that it intends to convert all gasoline association indicated that ethanol production in Mato Grosso supplies to E10 blends by 2020. The policy is designed to should increase from about 400 liters today to 3.0 or 4.0 billion achieve the twin goals of reducing levels of air pollution in major liters in the next five years. urban centers as well as using up large government-owned corn inventories, some of which are not fit for animal or human consumption. It looks like this initiative is moving ahead quickly- the port city of Tianjin announced in June that it will begin to use E10 blends by the end of September. ® The Mosaic Company Atria Corporate Center, Suite E490 3033 Campus Drive Plymouth, MN 55441 (800) 918-8270 (763) 577-2700 This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the anticipated benefits and synergies of our acquisition of the global phosphate and potash operations of Vale S.A. conducted through Vale Fertilizantes (which, when combined with our legacy distribution business in Brazil, is now known as Mosaic Fertilizantes) (the “Transaction”), other proposed or pending future transactions or strategic plans and other statements about future financial and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: difficulties with realization of the benefits and synergies of the Transaction, including the risks that the acquired business may not be integrated successfully or that the anticipated synergies or cost or capital expenditure savings from the Transaction may not be fully realized or may take longer to realize than expected, including because of political and economic instability in Brazil or changes in government policy in Brazil; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates, including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the ability of MWSPC to obtain additional planned funding in acceptable amounts and upon acceptable terms, the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; the risk that protests against natural resource companies in Peru extend to or impact the Miski Mayo mine, which is operated by an entity in which we are the majority owner; difficulties with realization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties, or the costs of the MWSPC, its existing or future funding and Mosaic’s commitments in support of such funding; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s Esterhazy, Saskatchewan, potash mine or other potash shaft mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements. Copyright © 2018. The Mosaic Company. All rights reserved.