All of a sudden there is a lot of talk about new sources of supply including from China and Egypt as well as some new plants on the drawing board. I guess this is one of the reasons for the recent weakness in UAN as well as some of the other fertilizer stocks. Any thoughts?
I think people are over reacting to those stories. If you listened or read the last couple reports from UAN there has be nothing but pro growth and increased revenues. I believe this is a chance to buy a dip. There is no way that the stock should be below last years numbers. Just wait until Q2 report. Now it may be slightly less than the large original expectations due to the late planting season, but it will be higher than last year by a good margin
We held in there good today, considering the market moves. RNF was up slightly, though UAN is a different animal. I think a lot of the price action has been as much for interest rate concerns as anything else. but the implied yield is so high here that interest rates would have to materially increase from here to create some sort of alternative in bonds of comparable quality.