megiddo666

The Agriculture Boom Goes Bust

I disagree with the fertilizer thesis as stated above. First of all, higher rates on fertilizer stockas are expected to go into effect on Sept. 1st, additionally, if you look at global pricing -- such as that being planned in Pakistan, for DAP, etc. the prices are going up. Throw in uncertainty of Russian potash production not being disupted again and there is additional catalyst in the stock pricing. The stocks have declined perhaps on the rotation into financials, but the fundamentals fo fertilizer demand have not changed...There is not enough food in the world and fertilizer helps meet that demand.

Disclosure -- Long POT, MOS, AGU, CF, CAGC.OB, SQM.

UBS Raises PotashCorp and Agrium's Price Targets - Again

Another analyst perspective is Moody's whose "sell price" on POT was $410, the last time I checked. Seems like their model may be more aggressive, but given that there is still a global need to grow more grain, etc. It is questionable demand will fall off soon.

The Chinese took the price increase this year from Cantopex, and increases to cover the costs of POT's production boost need factored in...All in all, I agree with the arguement that high demand and limited supply will support pricing for some time.

Only when grain supplies get back to what support global food security and grain prices fall, will you potentially see lower fert. price increases.