Dan Schmeidler

Today in Commodities: Dollar Sets the Tone

Shoot! The above should read: "It appears ...". Sorry.

Today in Commodities: Dollar Sets the Tone

Thank you, Matthew, for your postings. At appears that China (and other economies with massive amounts of U.S. denominated reserves) are currently (the logical) willing buyers of Oil (in exchange for the greenback) at these levels. But these nations have (at least until recently) been mostly dependent on foreign economic growth (a la the "foreign" consumer) in order to spur their own economic growth. And until we see definitive proof that these nations can economically expand on their own, I would not be betting on continued higher commodity prices all across the board.

P.S. Love the new spell-check feature in the comment section. Thank you Seeking Alpha.

Ten Reasons Why I'm Waiting to Buy PotashCorp

Yes, to some, meat is an essential component of the diet. But there are other ways to feed a global population than to rely soley on expensive fertilizer products. There is a supply story attached to it that has allowed Potash to profit massively from price increases. How high can Potash Corp. continue to push up its prices before countries such as China or India or going to find alternative solutions to feeding their people. Does this theme sound familiar? Look at what happened to the supply side of oil when it hit $140. It took weeks to figure out that inventories were starting to "fill" up, because everyone was so obsessed with the essential necessities to run the world on oil, no matter at what price. Well, price mattered in the end. And as oil dropped, no one wanted to get near it for about $20 to the down side, and still, more to go. I am not sure when potash and other fertilizer makers are going to run into this issue, but eventually, those empty warehouses are going to fill up with fertilizers if the ag group keeps raising their prices. Don't count on Q-3 to deliver on their earnings forecast, and don't count on the next quarter to be revised upwards once again.

Ten Reasons Why I'm Waiting to Buy PotashCorp

Looking at the POT chart, I am going to have to agree with this article with respect to a potential downward POT stock move. A lot of the commodity stocks (granted, outside of the AG group), have recently visited their 200-day moving averages. Many experienced sharp and sudden declines from their 50-day averages. The recent sell-off in POT to just below its 50-day moving average, could be a sign of the markets setting itself up for a further downward move. Certainly, a move back up to $220 is a possibility, but then, market expectations would be to break a new high above $240. If a susbstantial move above $220 fails, look out below: $160. And who is not to say that the world's rampant carnivores, might opt for a healthier diet of fruits and vegetables for a while.