UPDATE: Sector Update: Crop Producers Potash, Agrium, Viterra All Lower; But May Soon Grow Some Gains, says report
Even with strong grain prices and a surge in crop nutrient prices, shares of Potash Corp (POT.TO), Agrium Inc (AGU.TO) and Viterra (VT.TO) have had a dismal run over the last six months, largely due to an uncertain global economic outlook, Reuters said in an article over the weekend. On average, the shares have fallen about 8% in the period, it added.
Indeed, AGU is down 60 cents today at around $84.60, POT is 80 cents lower at $56.30 and VT is down 15 cents at $10.47.
But the trio may soon enjoy a nice pop, according to Reuters. Forecasts point to further reductions in corn yields across the United States. That suggests corn prices will rise, encouraging farmers to plant more acreage and use more fertilizer this fall. This trend is sure to benefit companies that either produce crop nutrients or sell them at a retail level, it said.
"Farm economies are still in an optimal position," Morningstar analyst Min Tang-Varner reportedly said. "At the end of the day, the fertilizer stocks have their own inherent cyclicalities that are not fully co-related to the North American economy, so they should still have space to run."
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