Stez

Potash and Agrium: Possible Agriculture Shorts?

This sector is so volatile you need nerves of steel.

Maybe using some option play is best.
The index etf's are obviously not anywhere near as volatile.

Buy-write's come to mind maybe a small position long term on the stock and sell the index. May not earn a lot from it but can just chip away and brings down the aggregate cost of the stock. While potential losses should be kept within discernable limits.

Potash's Negative Price Implications

Slightly counters RBC's call for potash prices to remain elevated.

Pick your analyst and takes your choice is the old adage.

Long term ie five year time horizon POT and AGU at these prices are interesting entry points. We have to be aware of possible further cuts in earnings.

Countering that agricultural inventories are at historical lows and they will proceed to get worse, Malthus's mathmatical formula regarding agriculture and population increases will come into play.

Within the next twenty years we have another billion mouths to feed while the agricultural land available for development even with the felling of the rainforests has decreased by over 8% in twenty year time period. It will decrease further as China and India develop.

Agriculture is most definitely the sector for the long term. It is Green Gold.