Potash (NYSE:POT) Poised for Strong volumes, Demand, Pricing

The agriculture sector continues to have a strong outlook, including fertilizer giant Potash Corp. (NYSE:POT), which is expected to have a strong year in 2011.

Gleacher noted, "while management is confident that global spot prices are likely to rise on strong demand, their guidance did not include higher potash prices, though they do see the potential for prices to move higher as the gap between US and offshore prices narrows. In our view, US prices of $515/st ($565/mt) are likely to stabilize at current levels throughout the spring season as the focus will be on international prices. We believe producers will soon be targeting a $25-$30/mt price increase in Brazil and Southeast Asia as they believe farmers are focusing more on the current strong crop prices rather than the price of potash. Our total gross profit assumption of $4.0bil is in-line with the top-end of the guidance of $3.5-$4.0bil."

They raised full year 2011 and 2012 EPS estimates from $9.00 and $9.55 to $9.70 and $10.25.

Even so, Gleacher continues to keep their "Neutral" rating in place on Potash for now.

Potash was trading at $174.81, gaining $0.67, or 0.38 percent, as of 2:59 PM EST.