Corn is All the Rage Again (CF, POT, MOS, AGU, MON, SYT, IPI, CORN)
June 19, 2012 by Paul Ausick
Warmer and drier weather in the US Midwest is raising concerns about the corn and soybean crops. If such weather continues, it could reduce the harvest and drive crop prices up. Corn prices fell to an 12-month low in early June, but have jumped more than $0.60/bushel since then.
Adding to the bad news is a forecast that US corn stockpiles will reach a 16-year low this summer. Before the unusually hot and dry weather became a factor, the US Department of Agriculture was expecting a record harvest for this year and doubling of US stockpiles by next year. That prediction is now in jeopardy, and corn prices keep rising.
Aside from raising commodity prices, though, a weak harvest typically means that fertilizer company stocks get a boost. CF Industries Holdings Inc. (NYSE: CF) is up more than 4.75% today, Potash Corp. of Saskatchewan Inc. (NYSE: POT) is up 5.3%, The Mosaic Co. (NYSE: MOS) is up 4.4%, Agrium Inc. (NYSE: AGU) is up about 4.3%, and Syngenta AG (NYSE: SYT) is up 3.8%.
Other fertilizer makers including Monsanto Co. (NYSE: MON) and Intrepid Potash Inc. (NYSE: IPI) are up around 2%, but trail the others for different reasons. Monsanto’s fertilizer business does not drive the company, and Intrepid is still too illiquid.
The Teucrium Corn Fund (AMEX: CORN) is also up about 4% today, at $38.52 in a 52-week range of $35.23-$50.69.
Paul Ausick
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.