Ag Woes & Fertilizer Fears Creep Higher (POT, AGU, CF, MOS, MOO, JPM, GS)

Two different reports from analysts in the agriculture and fertilizer segment have the global growth and the “move to two meals a day for the emerging world” arguments a bit under fire today.  Potash Corp. of Saskatchewan (NYSE: POT) was downgraded to Neutral from Overweight over at J.P. Morgan (NYSE: JPM).  Goldman Sachs Group Inc. (NYSE: GS) lowered its 2012 earnings expectations for some fertilizer companies due to the growing concern that international demand along with a large corn harvest in the United States might actually work against the earnings for this sector in the year ahead.  Goldman’s cut pertained to estimates of Potash Corp., CF Industries Holdings Inc. (NYSE: CF), and Agrium Inc. (NYSE: AGU).

Potash Corp. is down 2.4% at $44.45 against a 52-week range of $38.42 to $63.97, Agrium is down 1.5% at $79.30 against a 52-week range of $60.15 to $99.14, and finally CF Industries is down 0.7% at $172.30 against a 52-week range of $115.34 to $192.70.

The Mosaic Co. (NYSE: MOS) is down only 0.4% as it was not a big focus of the calls but the share price of $54.87 compares to a 52-week range of $44.86 to $89.24.  Even the Market Vectors Agribusiness ETF (NYSE: MOO) is down 0.4% at $51.11 against a 52-week range of $38.86 to $57.93.

As you can tell, many of these stocks have already been sold off extensively ahead of today’s double-cuts.  At some point we would ask that the stock market act like the discounting mechanism that it is supposed to be rather than the headline voting mechanism it is presently.

JON C. OGG