Wednesday, June 17, 2009

Potash and Fertilizer Stocks Skunked By News From Germany (POT, MOS, MON, AGU, CF, IPI, MOO, SYT)

From 24/7 Wall Street:
If you thought European stock news from companies doesn’t matter, this morning is proof against that notion. A German company called K+S warned of weak potash demand and announced price cuts and a drop in sales expectations. It is calling Q2 demand very weak ahead of the fall fertilization. This news has not yet been issued by US and Canadian fertilizer and potash players, but shares of Mosaic Co. (MOS), Potash Corp. of Saskatchewan, Inc. (NYSE: POT), Monsanto Co. (NYSE: MON), Agrium Inc. (NYSE: AGU), CF Industries Holdings, Inc. (NYSE: CF), and Intrepid Potash, Inc. (NYSE: IPI) are getting hammered. Even the agriculture ETF such as the Market Vectors Agribusiness ETF (NYSE: MOO) is getting hit along with Syngenta AG (NYSE: SYT).

K+S has cut its targets for all of 2009 down to 4.0 to 4.5 million tonnes. That figure was expected to be about 6 million not that long ago. The company also noted severe price weakness and unsustainability for large quantity pricing that was being seen earlier on. Imagine what that does to dash the hopes of a fertilizer recovery in the U.S. and Canada if we start seeing 25% to 33% of the forecasts suddenly cut....MORE