Potash (POT), Mosaic (MOS), CF (CF), Agrium (AGU) Fall on Corn Price Drop

Shares of Potash (POT), Mosaic (MOS), CF Industries Holdings, (NYSE:CF), Agrium (AGU) are all lower as reports the corn yield for 2010-2011 have been underestimated, which has pushed the price of corn down, along with the fertilizer companies.

Soleil Securities said this concerning the situation:

"2010-11 yield corn under-estimated. Based on recent anecdotal evidence from a number of farm belt contacts, both test weights and corn crop quality is running surprisingly high from the 2010-11 crop;

"Trend reversal. This means that corn carryover stocks could be actually higher than reflected in the latest WASDE report, that corn consumption estimates in future WASDE's could be lower than expected, increasing corn carryover estimates going forward.

Priced for perfection. These data should be negative for corn prices and for ag equities. The near-month corn price of around $7.26/bu reached its mid-June 2008 peak last week before backing off. Many ag equities, especially fertilizer equities, trade in lock-step with the corn price, and could trade off going into the March grain stocks report.

CF Industries was trading at $128.09, dropping $0.81, or 0.63 percent, as of 2:53 PM EST. Potash Corp. was at $58.15, down $0.97, or 1.64 percent. Agrium was trading at $92.62, falling $1.39, or 1.48 percent. Mosaic was at $81.94, down $0.78, or 0.94 percent.