Sector Snap: Agricultural Chemicals

Agricultural Chemicals Decline on Lower Commodities Prices, Analyst Says

NEW YORK (AP) -- Shares of agricultural chemical companies declined on Thursday, following commodities prices mostly lower.

Banc of America Securities analyst Kevin W. McCarthy said agricultural chemical companies have declined recently on a sell-off in commodities like gold, oil, corn and soy.

"Investors sold on the belief that Fed cuts are nearly done, which could support the dollar, with negative implications for dollar-denominated commodities," McCarthy wrote in a client note.

The Federal Reserve on Tuesday lowered interest rates for the sixth time since September.
Monsanto Co., which offers crop protection products and seed traits that protect against bugs and weeds, declined $3.85, or 3.9 percent, to $94.99 in afternoon trading.

Elsewhere, DuPont Co. declined 42 cents to $45.05.

McCarthy, in a client note, said DuPont's earnings per share growth outlook of 7 percent to 9 percent is "ambitious," given the expirations of numerous patents.

On the positive side, McCarthy said DuPont should gain from demand from emerging markets.

In 2007, 61 percent of DuPont's sales came from outside the U.S., and 25 percent of sales were attributed to emerging markets, like Latin America.

Dow Chemical Co. declined 32 cents to $36.09, and Syngenta AG, which is based in Switzerland, lost $1.92, or 3.5 percent, to $52.91. Both companies make crop protection products.

Meanwhile, fertilizer companies Potash Corp. and Mosaic Co. also declined. Canada's Potash lost $2.60 to $141.88, and Mosaic, which makes potash products, shed $7.10, or 7.3 percent, to $90.10. Potash is a fertilizer made from wood ashes used mostly in agriculture to fertilize crops and other plants.