Nowhere to Run, Nowhere to Hide: "Stubborn Ag Bulls Emerge Covered in Fertilizer" (MOO; MON; MOS; POT)

From MarketBeat:

The bubble has burst for fertilizer and agricultural chemical stocks, with former stock-market star Mosaic off by a third Thursday and others hard on their heels, like Monsanto and Potash Corp. of Saskatchewan as excess supply and reduced demand slow the pattern of price increases on farm chemicals.

Mosaic, one of the two largest fertilizer makers by sales, recently fell 32% to $45.89 — and has fallen by more than $117, or over two-thirds, since June 18, even after reporting robust fiscal first-quarter earnings growth after the bell Wednesday. Mosaic’s warning that phosphate, a particular grade of fertilizer, was leveling off in price sent hedge funds and Wall Street brokers fleeing from the sector, where consistent price increases had resulted in great expectations.

The action in fertilizer stocks in particular is comparable to the technology bust of 2000 to 2001, when profitable companies like Microsoft and Intel suffered from speculators’ realization that the sky was not the limit. Farmers could not bear the weight of ever-increasing costs forever, especially as grain prices fell by half and credit tightened....MORE