Potash Stocks are on the Move
Potash stocks are on the move again. The recent heat wave and drought hitting the Midwestern United States has seen corn prices jump 38% since June 1st.
The Obama administration identified the current drought plaguing farmers across the U.S. as the worst in 25 years. Agriculture Secretary Tom Vilsack said on Wednesday, "Part of the problem we're facing is that weather conditions were so good at the beginning of the season that farmers got in the field early and as a result this drought comes at a very difficult and painful time in their ability to have their crops have good yield."
According to Vilsack, three-fifths of the U.S. land mass and much of the country's corn and soybean crops have been affected by the lack of rain.
As a result of the crisis, Citi Investment Research analyst P.J. Juvekar wrote,"We think North American fertilizer producers are poised to benefit from higher grain prices and the growing likelihood that the U.S. will need to plant another large corn and soybean crop in 2013."
All this evidently bodes well for potash companies. Today, the MiningFeeds Potash Index is the only mining stock index in the green, up 0.25% at publication time.
Shares of Agrium (Stock Profile - TSX:AGU & NYSE:AGU) have moved higher this week. On Wednesday, the company increased their estimates for the second quarter: earnings are now expected to be in the range of $5.40 to $5.50 per share. "The increase in expected earnings is due to excellent results across our entire crop input business, resulting from the continuation of robust demand through June," said Mike Wilson, Agrium President and CEO.
And shares of the world's leading potash producer, Potash Corp. (Stock Profile - TSX: POT & NYSE: POT), have also been edging higher. The company is scheduled to release their second quarter 2012 earnings on Thursday, July 26 at 6 am ET. Based in Saskatchewan, Potash Corp. is responsible for about 20 percent of global potash supply.
For the related article: 5 Potash Stocks to Watch - CLICK HERE.