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Friday, March 30, 2012


I have been waiting to start playing the fertilizers again for some time (specifically POT), but always held off because the potash market was going through a bit of a hiccup.  Too much supply for the level of demand.

A few things have contributed to this:

1. over supply
2. more efficient use

Because of these trends, the projected potash price, late last year, was to be relatively flat.  But as the market closes the first quarter, and producers are coming off forced shut downs of production. This may have facilitated a shift in pricing. (Not to mention a lower natural gas price that should help fertilizers in general.)

A cautionary note, Mosaic's recent earnings report, did not insight confidence to the macro shift. But when looking at POT specifically, I get the sense of a potential breakout.  To not mince words, it is still at its 150SMA resistance. The resistance is an important one because the 150SMA usually acts as long-term support/resistance.

If it breaks the 150, it can make a legitimate push toward 50.

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