When we saw the news regarding Kazakhstan’s announcement that some foreign uranium deals were illegal, and named one of Uranium One’s (SXRZF.PK) mines in their probe we simply shook our heads. It was hardly surprising considering all that we have been through before. Although it's one of our favorite companies because of its commitment to bringing supply online and aggressively expanding its operations, it conducts business in risky areas and seems to consistently bet the farm.

This all brings us to today. The Kazakhstan government has said that they will not renegotiate any contracts after talking with their partners in the country, but investors seemed hardly moved by this announcement and the damage was done. Many still felt that the government was going to somehow increase its grip on the mines in the country and that its previous announcement indicated that the Kazakhs were interested in not only being the world’s largest producer of uranium, but owning the production as well.

Over the past few weeks it seems that volume has slowed on the potash stocks we follow as the share prices have taken a breather. Interest has waned yet share prices have found themselves in a bit of a trading range, especially when one consults a chart of Potash Corporation of Saskatchewan (POT), The Mosaic Company (MOS) and Agrium Incorporated (AGU). Not much has changed in the past few weeks, and investors understand that the fertilizer stocks will be around for a while. Right now we have some sideways movement, which could soon end.

The Wall Street Journal wrote this past week a somewhat negative story of the "cartels" which control the world's potash market. They noted that they are legalized entities in both Canada and the United States, and we all know from experience and past history that the Russians will let you do just about anything as long as you play by their rules and scratch their back at the end of the day. Farmers across the world are getting angry with prices for potash and other fertilizers, but truth be told they could not achieve anywhere close to the yields they do without it so it all falls under the category of "you gotta spend money to make money" in our book. We highly doubt that either the Canadian or United States' governments will seriously consider, let alone implement, any price caps on fertilizers. Their tunnel vision in the states is focused on oil prices and the oil majors and shall remain there as prices around the country cross the US$4.00 a gallon mark.

Over the past few weeks, we here at theinvestar.com had speculated that uranium equities could be poised to rise higher if only they could hold recent gains and stay above support levels established in April and subsequently rise above previously established resistance levels. Our reasoning was due to the sideways trading seen in April, as depicted by TICUA our uranium equities index, the numerous charts flowing from the upper left hand corner to the lower right with very low volume near the end and the fact that when we had our first upwards movement it appeared the market "moved on a dime" accompanied by very high volume.

We also watch the financing markets very closely and had noted the recent financing news was regarding cancelled offerings and those which came in lower than expected or on unfavorable terms. When we saw companies willing to go shopping for competitors we knew something was up, and it seems to be a rising tide. Currently we have Frontier Pacific (FRPMF.PK) as the target of a buyout and Khan Resources (KHRIF.PK) attempting a takeover of Western Prospector (WEPGF.PK). In Australia, where there are numerous uranium explorers with market caps under A$20 million, many companies have been selling stakes at or above 10% of the shares outstanding to outside investors.

The big news today in the potash arena has to be the fact that BHP Billiton (BHP- NYSE) has purchased their joint venture partner, Anglo Potash Limited (AGP- Vancouver), at C$8.15 per share for a total of C$284 million in cash. For those not familiar with the situation, Anglo Potash owned 25% of a joint venture with BHP Billiton Diamonds Inc., a subsidiary of BHP Billiton. With this transaction, BHP has placed a value on the project of roughly C$1.136 Billion for a project which may come into production in 2014 at the earliest assuming smooth sailing from here on out.

The shareholders of Anglo Potash are being cashed out and thus have no further equity involved in this project unless they reinvest their proceeds from the sale of their shares into BHP, which does not provide the potash exposure that Anglo Potash did. This buyout has the potential to push shares in the junior potash firms much higher now that a firm will cease trading, is being acquired for cash, and the purchasing company has very little exposure to the overall potash market.

Uranium equities have continued their downturn after a period where it appeared we may have been flat-lining. Unfortunately for those still holding, many of these stocks dipped further in recent trading days resulting in a new all-time low for theinvestar's Canadian Uranium Average [TICUA]. We noticed during those down days that volume spiked on many of the smaller uranium stocks included in the average as well as those which we follow on the side. Some of these stocks reversed course during high volume days and finished up after being down 5-10% which brought to mind the word capitulation. Even if the uranium mining stocks have reached a bottom, it will take some time to achieve the highs set in previous years as many stocks would need to triple just to get back in the neighborhood of their old highs.

For all the good "spin" and taxpayer dollars funneled to ethanol and biofuel production over the past decade, it is time to seriously consider the ramifications of this policy on futures markets, the environment, and most of all our food supply. We here at theinvestar.com, LLC have continually argued against burning food rather than drilling for further oil supplies and are convinced that this is an issue which must be confronted sooner rather than later.

The past week was packed full with potash/fertilizer industry news. First, we had Potash Corp. of Saskatchewan (POT) eclipsing the $200 benchmark, culminating in POT becoming the largest company in Canada by market capitalization. The very next day, Intrepid Potash (IPI), an IPO we have been talking about for some time, debuted on the New York Stock Exchange finishing up 58% for the day.

This is on top of raising the number of shares offered in the IPO, as well as the pricing of the issue by roughly 50%.

We must state for the record that we are as surprised as anyone by the rapid price appreciation experienced by Potash Corp. of Saskatchewan (POT) shareholders over the past ten years. We started following the stock back in 1998 and were intrigued by its dominate market position, large amount of reserves and potential future resources, as well as their business dealings abroad with foreign entities. Make no mistake, at the time the industry was in troubled times as they could not sell all of their production and relied heavily upon controlling supply into the market to get by.

The Mosaic Company (MOS) reported blowout earnings on April 4 due to strong demand from farmers for their agriculture fertilizer products. Earnings increased twelve-fold from the same quarter of last year with the company also increasing its gross margin to 33.9% of net sales from the previous year's gross margin of 8.8%. The market was quite pleased with this and subsequently pushed Mosaic's share price up 20% to new all-time highs.

Mosaic shares broke out to new highs after an extremely positive earnings report where earnings increased twelve-fold over the previous year's quarter.

The past few months have been very hard on the uranium mining industry's equity investors. Many uranium companies' shares are trading near 52-week lows after a handful of problems have crept up for many in the industry. Now that the market seems to have priced in the mining problems at a handful of companies, the fact that many drill results are going to take longer than expected to be examined, and the fact that some companies' treasuries were struck by the sub-prime CDOs which have ravaged many balance sheets, it appears that a bottom may have been reached.

The low prices set by the uranium equities lately have attracted the attention of a few prospective buyers. It seems that the Chinese have finally arrived to the market- as some have expected for years now - much as the French did during the American Revolution. That was a pivotal moment during that war, and if the Chinese are serious about locking up supplies through agreements and acquisitions, then this will be a watershed moment for the uranium mining industry as a whole. This market has been waiting for a catalyst to reverse the current trend, and that moment has potentially arrived as Bloomberg has reported that Chinese officials with China National Nuclear "met with their counterparts" at Cameco Corporation (CCJ). These same officials were quoted as saying that they were looking for deals in the range from, "several hundred million dollars to more than a billion."

As markets have continued to be weak over the past few weeks, there has been one sector which continues to stand out among the leaders: Agriculture Stocks. Potash Corporation of Saskatchewan (POT), The Mosaic Company (MOS), and Agrium Incorporated (AGU) have powered forward and continued their bullish uptrends. In bear markets, equities which continue higher have serious momentum and legitimate businesses behind them. For the past two years it has been nothing but good news for the North American potash producers, and for the foreseeable future it appears that this trend will continue. Potash Corp. of Saskatchewan, the largest potash producer in the world, has risen to the $160 level once again and still looks cheap relative to the market using forward earnings. If you were to look at the trailing twelve months earnings and do a price-to-earnings, the stock would look expensive. Not so though if factoring in that the company is able to now sell the potash it mines at approximately $413/tonne as well as the fact that they are to increase capacity in 2008 by an estimated 15%. Also helping propel the group higher is the fact that we are now burning corn to power our vehicles. By burning our "extra" or surplus corn the market is left in a very tight supply/demand ratio which provides serious ammunition to the bulls. Currently we are seeing all grains headed higher, which is obviously bullish for fertilizer stocks, especially potash stocks, as it is necessary for fertilizers and itself is reaching a very tight supply/demand ratio. For 2007 the market is estimated to be at about 88% utilization, and the more acres that farmers plant next year, the higher that utilization will go. (Also do not forget that some of this utilization will also be increased due to POT adding to its output next year from capacity not being utilized). According to the United States Department of Agriculture, the two crops which are the largest consumers of potash on a per acres basis are corn and soybeans. Cotton is the third most potash intense crop. However many predict that farmers will plant less cotton acreage in the next season, as it is labor and time intensive (much work is required to keep the plants productive and in good shape), but in its place more corn should be substituted according to these experts. So if the experts are correct, each acre which farmers switch from cotton to corn would increase potash use by approximately 8.97%. Suppose that instead of corn, those farmers instead chose to plant soybeans (a substitute for corn and likely if crop rotation was being used as it should), that would leave a net increase of 2.56% per acre converted. This simply looks at the United States' production and does not factor in that farmers around the world would have to pick up the dropped acreage of cotton, because around the world in the developing countries it is a known fact that they use far less of the suggested, and in many cases the needed, fertilizers.

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The past nine months have been very rough for investors in uranium equities, and our long-term chart for the Canadian Uranium Average fully supports this statement, but it appears as though the industry has bottomed and is now on its way up.

Our index fell all the way down to 141.87 on February 8, 2008 from a high of 325.915 on August 9, 2007 and the losses were across the board with only a few winners in that time-frame.

The past few weeks have been quite difficult for uranium investors as the market in general remains reluctant to take on risk. This risk aversion has led uranium equities downwards with some companies' stocks either at or approaching multi-year lows and our uranium index once again near this year's lows. Until the market as a whole has a good feeling for what to expect with the mortgage related write-downs, volatility will most certainly surround such high risk, high reward situations such as our junior uranium mining stocks.

Some stocks have faired quite poorly this year as investor's shore up their cash positions and lock in gains before they have the opportunity to lose them. On the other hand, there are some stocks which have certainly delivered stellar returns to their shareholders during this market downturn. The difference between these companies, the winners and the losers, is that those who are up have provided good news to the investment community while the losers have reported poor news or no news at all. In these types of markets it IS possible for no news to be bad news. UEX (UEXCF.PK) has reported very good grades as they continue to drill with AREVA at Shea Creek which has provided the fuel to power the stock up to new all-time highs recently. Paladin [PDN.TO] and Uranium One [UUU.TO] have not been so fortunate. Both have failed to meet their production goals and been taken to the woodshed by investors for their poor performance. In markets such as the one we are currently in, investors do not like surprises and are less willing to allow a pass for poor performance as they may during a powerful bull market plowing forward.

As we continue to favor the nuclear renaissance over many other investment themes out there, we would also like to revisit our favorite non-uranium company: Oilsands Quest (BQI). The stock has been in a strong uptrend over the past few months; in fact the stock has more than doubled off of its lows set in July of this year.