Ag Plays Continue to Run

For a time it appeared as if the agricultural plays, which ran wild in 2007, were going to languish as investors snapped up other investments in 2008. Those stocks pulled back in mid-May, along with the rest of the market, but have put together another sharp rally in the last two weeks.

Potash Corp. of Saskatchewan was up by 4.2% Monday after gaining 51% in 2008, while rival Agrium Inc. tacked on 3.9% after a 28% gain in the first five-plus months of the year. Jeffrey Cooper, writing on Minyanville.com, says that Potash “and its entourage surely are reminiscient of hammer-time in the Internets” dating back to 1999. And yet, these stocks continue their surge.

Goldman Sachs analysts raised earnings estimates for two prominent names — Potash and Mosaic, saying they “continue to believe that exposure to companies significant potash exposure will lead to greater rewards for investors because of the superior industry structure of potash compared to the other nutrients.”

Seed giant Monsanto was also doing well, gaining 3.1%; the stock was up nearly 22% headed into today’s trade. Also gaining was Intrepid Potash, which rose 7%, and Mosaic Co., which rose 6.4%.