U.S. employment, Potash Corp.& Agrium, Merrill, Nokia – Vialoux
Posted: September 05, 2008, 9:21 AM by David Pett
Market Call, Manager picks
U.S. equity markets are lower this morning. S&P futures are off another thirteen points following disappointing employment news. The decline in U.S. non-farm payrolls in August rose to 84,000. Consensus was a decline of 75,000. Of greater importance, the unemployment rate rose from 5.7% to 6.1%. Consensus was 5.7%. U.S. equities also are responding to rumors that one or more major hedge fund is liquidating positions following the realization of large losses in August. Atticus, a hedge fund valued at $14 billion denied that it has been liquidating. Speculation about its liquidation has surfaced because many of the equities known to be held by the fund have fallen sharply during the past few days.
Economic news in Canada this morning is more encouraging. Canada added 15,200 jobs in August. Canada’s unemployment rate remained at 6.1%.
Morgan Stanley upgraded Potash Corp and Agrium to its recommended list this morning. On the charts, both stocks have negative technical profiles. They have an intermediate downtrend and trade below their 50 and 200 day moving averages. Agrium broke support yesterday.
Just prior to the closing bell, Joe Terranova (CNBC) said that commodities will probably rise after the bailout is settled, and he noted that the demand in China will resume as well.
Also, MOS will report earnings on 10/1 and the results should give a boost to AGU.
I added shares of AGU today.
My take is that AGU will be considerably higher (e.g., above $72.) in two years. So, I'm adding when AGU is below $40., and I plan to hold until the economy has improved.
As we move through this recessionary period, the earnings for many companies/sectors will continue to decline. However, given the primary role that agriculture plays in the global economy, fertilizer stocks may emerge (as earnings are reported) as relatively stable.
The recent selling of AGU has been merciless, but the overall market has been in sharp decline. I have been nibbling on more shares as we approach Q3 reports in the sector. Look for solid POT earnings in less than two weeks and AGU on 11/4.
Best rewards to those who are patient.
USDA Crop Report
Friday, September 12, 2008
Corn production: "If realized, yield will be the second highest on record, behind 2004, while production will be the second largest, behind last year.
Soybean production: "...is forecast at 2.93 billion bushels, down 1 percent from the August forecast but up 13 percent from last year. If realized, this will be the fourth largest production on record.
USDA left Illinois' crop production figures unchanged from the August report with corn production at 2.030 billion bushels at an average yield of 172 bushels per acre. Soybean production was also stable at 376 million bushels at an average yield of 42 bushels per acre.
Oct. 28 (Bloomberg)
The National Agriculture Statistics Service, a unit of the USDA, will release a revised October crop-production report today with corrected acreage estimates. The USDA didn't provide further details about the report, which will be released at 8:30 a.m. in Washington. The original report was released Oct. 10.
The news came as a surprise to the market, said Doug Whitehead, a soft commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.
``We're seeing gains in corn and soy a result of speculation that the USDA will spring a bullish number in their revision to the October Crop Production report,'' said Toby Hassall, an analyst at Commodity Warrants Australia in Sydney.
The Wall Street Journal
By MARK WHITEHOUSE, SCOTT KILMAN and ALEX FRANGOS
From corn to crude, prices for a wide range of commodities are on the rise across the globe, a trend that underscores -- but could also hinder -- a gathering economic recovery.
In recent months, global food prices have been growing at a rate that rivals some of the wildest months of 2008, when food riots erupted across the developing world. Higher prices could be a positive sign that companies are gearing up for a rebound in consumer spending, or the harbinger of a return to the upward spiral that plagued consumers before the recession took hold.
The surge in commodities "is a reflection of extremely strong demand in the emerging world, and growing hopes of stronger demand in the developed world," said Jim O'Neill, head of global economic research at Goldman Sachs in London. It is "encouraging so long as it isn't too persistent."
But Hugh Grant, chairman and chief executive of St. Louis crop-biotechnology company Monsanto Co., said the recession merely "masked" the 2008 food crisis.
The price of a bushel of corn -- a ubiquitous ingredient in the U.S. diet -- rose 24% since Sept. 1. In Thailand, the price of a metric ton of rice, a staple across the region, stood at $618 in December, up 11% from September, but well below a peak of about $1,000 in April 2008. An index of global food prices compiled by the United Nations jumped 6.9% in November alone from the month before.
From the Street.com Jan. 7 2010
Credit Suisse's Elaine Yip rates Agrium shares at outperform, based on valuation as well as the company's retail presence: throughout the farm belts of the U.S. and parts of Latin America, the company runs a chain of farm-product retail centers -- descendants of the country feed stores of yore.
According to Ms. Yip, this spring -- the first planting season coming out of the depths of the recession -- promises to be a strong one for Agrium's retail business. In a research note issued Tuesday, she set a price target on the stock of $74. The stock set a new 52-weeek high on Wednesday of $67.50.
Dahlman Rose's Mr. Neivert is also bullish on Agrium -- the only large-cap fertilizer name that he rates a buy -- though for a somewhat different reason: With its retail and wholesale businesses, with its phosphate, potash and nitrogen production segments, Agrium is, by far, the most diverse fertilizer concern in North America.
Yesterday, Marketwatch featured a Peter Brimelow article centering on the the "Aden Forecast, edited by Costa Rica-based Mary Anne and Pamela Aden," which Brimelow likes "because of its rational, comprehensive approach."
"Overall, the Adens think there's going to be a huge commodity boom, driven by inflationary deficit financing in the developed world and demand from the emerging countries."
PREVIEW-PotashCorp, Agrium seen posting strong results
By Euan Rocha
TORONTO, Oct 25 (Reuters) - Canada's two big fertilizer companies, Potash Corp (POT.TO) and Agrium Inc (AGU.TO), are expected to report strong quarterly earnings driven largely by big gains in the price of nitrogen and phosphate-based products.
Surging grain prices and an early harvest across North America have given farmers a wider window for fertilizer application this fall. That provides an incentive to boost fertilizer spending ahead of the spring planting season.
Gleacher & Co analyst Edlain Rodriguez expects both companies to issue bullish outlooks, given the strong fundamentals in the agricultural sector.
"A lot of the price increases we've seen will not get captured until the next quarter," said Rodriguez. "The third quarter will be solid for both companies, but the fourth quarter and coming first quarter will be much better."
In September, a broker friend of mine mentioned AGU while we watched our kids play soccer. I've been adding shares since then. In the news:
BMO Upgrades Agrium (AGU) to Outperform, Raises Target to $80
* BMO Upgrades Agrium (AGU) to Outperform, Raises Target to $80
* Ag Stocks Up on UBS' Agrium (AGU) Upgrade
* Agrium Has Withdrawn and Re-Filed Its Hart-Scott-Rodino Notification in Connection With Proposed Acquisition of CF Industries
* BMO Upgrades Agrium (AGU) to Outperform, Raises Target to $80
More News related to Upgrades
December 8, 2009 9:16 AM EST
BMO Capital has upgraded shares of Agrium (NYSE: AGU) from Market Perform to Outperform this morning, also boosting its price target from $55 to $80.
Despite the upgrade to the equivalent of a Buy, Agrium's stock is down in the pre-market session. Agrium shares most recently traded at $60.10, down 0.4% from yesterday's close.
The firm's new price target represents potential upside of 33%.
To see all the market-moving upgrades/downgrades on shares of Agrium, visit our Analyst Ratings page.
Agrium Inc. produces and markets agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South America.
Terra to buy 50 pct stake in Agrium plant on condition that Agrium's CF takeover goes through
11:30 am EDT, Monday October 19, 2009
SIOUX CITY, Iowa (AP) -- Agrium Inc. on Monday said it will sell part of its Carseland nitrogen facility to fertilizer maker Terra Industries Inc. in an effort to deal with regulatory concerns related to its proposed hostile takeover of CF Industries Holdings Inc.
The sale is conditional on Agrium acquiring fertilizer company CF and Terra raising of $600 million of debt capital, the companies said.
Terra will pay $250 million in cash for certain U.S. assets and a 50 percent stake in the facility in Carseland, Alberta, which has an annual capacity of 590,000 short tons of gross ammonia and about 750,000 short tons of granular urea.
Agrium believes this agreement will address regulatory concerns under Canadian competition law related to its offer to acquire CF.
Terra said the purchase will provide greater exposure to cheaper natural gas, a more diverse geographic footprint in North America and ownership in a facility that produces upgraded ammonia-based products, which is part of the company's long-term strategy.
This deal is the latest move in a lengthy acquisition saga between Agrium, CF and Terra.
Since February, Agrium has pursued CF with sweetened offers and extended deadlines, but has only been dealt rejection. Agrium made its offer on the condition that CF drop its bid for Terra.
Deerfield, Ill.-based CF has resisted Agrium's takeover efforts, preferring instead to chase rival Terra Industries, which it has sought to acquire since January. Despite repeated rejections, in September, CF renewed its bid to buy Terra Industries, saying it had acquired 7 percent of Terra's shares and that it has offered to buy the rest of Terra in a deal worth nearly $4 billion. Terra continued to resist the marriage. In October, CF urged Terra shareholders to elect three of its own nominees for Terra's board, in an effort to boost chances for its all-stock takeover bid.
In Monday morning trading, shares of Agrium rose $3.33, or 6.2 percent, to $56.67. Earlier, shares hit a new 52-week high of $56.69. Terra shares fell $1, or 2.7 percent to $35.38. CF shares gained $3.31, or 3.6 percent, to $93.94. Earlier, the stock reached $94.09, a new high for the year.
The current 10-K adds the note: "However, the Company may terminate the merger agreement if a majority of the NAPE shareholders who are not bound by the shareholders' agreement do not approve the merger."
What is the likelihood that NAPE shareholders would terminate the merger?