Potash of Sasatchewan (POT) should benefit from a strong fall fertilization season, as farmers make up for a late start to the spring planting season, notes Citi analyst PJ Juvekar, who added Potash to Citi’s Top Picks list.
“While corn prices have pulled back from their early June highs, grain prices are elevated enough to incentivize farmers to fully fertilize in order to attempt to maximize yields,” Juvekar writes.
Juvekar thinks potash prices are on the upswing, and supply could tighten for various fertilizers. China’s tariff policies will likely limit exports of urea, for instance, Juvekar contends. And demand for potash is also rising.
“Strong global demand has kept the market tight, even in the absence of an India contract settlement,” Juvekar writes.