AgriMinco Corp ETPHF

Potash Corp and Agrium up 4% ?

[STVP]

Markets were all mostly down today yet, Potash Corp and Agrium up 4% today? Thought the USDA monthly report yesterday was suppose to be bearish (at least for this month) for fertilizer? I guess investors are starting to look out long term and see that food shortages are still on it's way no matter what the short term report says. Also, one has to question this report that has major influence in Chicago (after all corn and other Ag commodities trade on the CBOE). The government there certainly don't want food inflation and one of the ways to keep food prices down is make sure this USDA report is bearish for Ag commodities so that prices of grains, corn, soy, meat (feed price lower so meat lower), etc are all kept low.

 

Don't forget what caused the Arab uprising, it all started due to high food prices. As much as governments would like to keep oil prices lower so that the economies can grow, food prices are much more important to be kept low so that uprising in countries don't occur. China, India, etc will have to buy potash no matter how high the price is as there is NO SUBSTITUTE for POTASH and plants must have this nutrient to grow. It's only a matter of time before these food shortages start making news again, that will be the sentiment that drives potash in the future. Indian farmers already can't afford potash due to high prices and depend on government subsidies to buy fertilizer at lower price. India will certainly want to acquire potash assets in Ethiopia or at least have an off take agreement with a supplier from Ethiopia given that they will pay less compared to buying from Saskatchewan.