Agrium (AGU), Potash (POT), Mosaic (MOS) All Near 10-Week Average

Three Canadian fertilizer makers (Agrium (NYSE:AGU), Potash (NYSE:POT), Mosaic (NYSE:MOS)), all on the uptrend, may be building entry points. Yet one of the three must first regain its 10-week moving average, where on Tuesday they all retreated.

Grain prices have been rising for months. Bad crops have restricted supply, while new consumers among the populations of China, India and other emerging markets are boosting demand. Ethanol, too, is a driving force for corn, especially as oil prices move higher.

Those high grain prices translated into bigger demand for fertilizer, even as those prices climbed. Farmers, watching corn, wheat and bean prices double and triple, scrambled to put more acreage into production.

But ag markets suffered a big reversal Tuesday on speculation that Ukraine may remove export restrictions for wheat. Profit taking pushed that market to steep losses, and the urge to purge long positions spread to corn and soybeans.

Are these grains entering a bear market? Is the ride over for fertilizer makers? Maybe, but you're best off letting the market guide you into, or away from, Potash Corp. of Saskatchewan (POT), Mosaic (MOS) and Agrium (AGU).




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