What's the Buzz in Basics Volume LXXXVI

Research evidence excerpt

What's the Buzz in Basics Volume LXXXVI

Agriculture

Chemicals

Packaging

What's the Buzz in Basics Volume LXXXVI June 7, 2026

The Wolfe Byte

Post another wk of inconsistent news flow via the prospect for the SoH to fully open and the US interest rate

outlook, investors seem firmly in the "wait and see" mode or outright "risk off". This dynamic is likely to last into

the 2H, driving further volatility.

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Further Volatility Driving Temporary Risk-Off Mentality - Particularly Across Commodities: Over the past wk it's

been clear investors are seeking further (clear-cut) direction across most sub-industries, particularly commodities.

Despite further tensions across the Arabian Gulf, the majority of investors still benchmark de-escalation as the most

probable intermediate term scenario, driving weakness across PE/PP/intermediates and fertilizers. From a fundamental

perspective spot PE/PP/intermediates Pxs are still on the decline (weaker wk/wk and m/m; but still up considerably qtr/

qtr and yr/yr) - while nitrogen Pxs are also further declining (most prevalent in urea). We'd flag that phosphate and

potash Pxs remain stable (recall the SoH has no direct impact to potash trade) - and as long as the SoH remains closed

and S procurement is an issue we expect mkts to be tight. It's our call that the N correction may be a bit overdone as

it relates to the 2H (i.e. - the pendulum over-corrects in both directions), but sense polymer and intermediates Pxs are

likely to further correct negatively.

The next stage will be to evaluate the magnitude of these Px corrections and calibrate relative to the 2Q/3Q FCF