Long term,yes, ag prices provide underlying strength to fertizer prices. Short-term, however, prices can move any which way but loose. Pot inventory is being burned off presently, but we know that long-term ag product demand is what sets the long-term fertiziler demand. During the current inventory burn off one needs to realize that this only leads to demand and prices growing on the next cycle with lower than normal inventories. The bottom line is that set-backs in pricing of ag fertilizer products and POT stock prices are buying opportunities unless you think that ag prices are coming into a weak period.
Well let’s see…These are some of the things I see hurting POT (feel free to add to the list):
1. China has officially declared that it is planning to slow down to fight inflation. That definitely has put a big hurt on POT. 2. Everybody is expecting for 5-10% pullback on S&P500. So investors and MM don’t want to buy now. 3. FOMC meeting is being held tomorrow. Bernanke & Co. will say nothing and will stay on the sidelines (as they should). I believe every trader and his mama knows that nothing is going to come out of this meeting. For some reason tho (which is beyond me) the market will be disappointed in this. The market shouldn’t sell off dramatically on this (non) news. But if it does, POT will get hurt. 4. India’s government took away the subsidy for farmers to purchase fertilizer. I am not sure how badly this hurts POT, since sales to India are very minimal for POT. However small tho, this can’t be good for POT. 5. We have to wait until April 1 for POT to open up all its mines and start operation at 100% capacity. I hope that’s not an April fool’s day kind of thing.
…And the following need to get settled:
1. Solid and positive contract negotiation between Cantoplex, China, Brazil, and Europe. a. Come on China! b. South America’s drought this year has been severe. I hope that means Brazilian farmers will be in the market to buy. c. Europe has had a really bad winter. It hasn’t thawed out from under all the snow yet. When it does, we need farmers there to start buying. 2. No more postponements on opening up the mines! Management has to get all the mines on line and running. After about 6 months or so, that “supply & demand” line should be working for us and not against us! 3. S&P500 to make up its mind. If you want to make a 5-10% correction…do it already!
Being a POT share holder the past few weeks has been very stressful!
sara... if you've only been in this stock, for just "the past few weeks", obviously, you thought it hit a bottom, sooo, you pulled the trigger... understand that... been there, done that... it's a question of timing... we always like to get in it, just before it rises, yet that's real hard to do... the whole past year, news events have dictated where the stock would go... and as of yet, we haven't seen any news events that would suggest, a change in overall direction of the industry sector... your timing was off... been there, done that... nooo need to beat yourself... your analysis is really good, in that you're paying attention to the end user, weather, government policy changes, farm reports, overall market perceptions and cost constraints of the producers... whereas most on POT's board are just traders, looking at charts... sooo, i compliment ya... for us, we've been in POT since its ipo, thus we've gone thru a lot longer time periods, seeing the stock, sitting like a hog in mud, like from year 1996 to year 2004... that's a long time to keep telling yourself, that it's a good buy & hold... sooo, sara, hang in there... it's going to get better... i promise...