Is Corn This Serious For Potash & Fertilizer? Yes, Maybe (MOS, POT, CF, IPI, MOO)

Fertilizer stocks are on skid row after the U.S. Department of Agriculture report showed that the unsold corn supplies from December were down about 1% less than what analysts were expecting.  Like it or not, corn is a key driver and the fertilizer and potash stocks are taking it on the chin.

The Mosaic Co. (NYSE: MOS) is down by about 3.6% at $53.03 on close to 4 million shares, against a 52-week range of $44.86 to $89.24.  The larger rival and former takeover target of Potash Corp. of Saskatchewan Inc. (NYSE: POT) is down by 3.8% at $42.12 versus a 52-week range of $38.42 to $63.97.

CF Industries Holdings Inc. (NYSE: CF) is down by 3.7% at $161.00 and its 52-week trading range is $115.34 to $192.70.

Intrepid Potash Inc. (NYSE: IPI) is down the least with shares down “only 2.6%” on the day at $24.07 and against a 52-week range of $20.75 to $40.22.

Using an exchange traded fund can emphasize just how bad things are and the Market Vectors Agribusiness ETF (NYSE: MOO) is down 1.2% at $49.39 versus a 52-week range of $39.86 to $57.93.

With so much corn used in food for humans, ethanol, and animal feedstocks, corn unfortunately is a key driver for the fertilizer and potash markets. 

Sadly, things brings up the question… Just how much do the potash and fertilizer markets depend upon the taxpayer-funded farm subsidies in America?  Probably more than any of us care to think.

JON C. OGG