Jan. Data on Potash Inventories Shows Pricing Could Be Pressured Going Forward (MOO)

Ag-related stocks are outperforming the broader stock market Wednesday afternoon despite concerning North American potash inventory data for the month of January and the following cautious analyst comments. While the S&P 500 is down about 0.4 percent, the Market Vectors Agribusiness ETF (NYSE: MOO) is up less than 0.1 percent.

The Fertilizer Institute reported potash inventories were up over 500 kilo metric tons last month, levels which a Dahlman Rose analyst pointed out were "nearly comparable to those seen during the worst of the downturn in demand in 2009." The Dahlman analyst said "with China and India not taking substantial deliveries, US buyers on the sidelines and Brazil mostly out of season, pressure on potash price is likely to build." The analyst warned of continued pressure on shares of Potash (NYSE: POT), Mosaic (NYSE: MOS) and Intrepid Potash (NYSE: IPI).

Elsewhere BMO's Joel Jackson labeled the data "slightly negative," but also noted potash applications which should be "robust" this year given last-minute shopping by farmers.

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