AG COMMODITIES STUMBLE AGAIN

Agricultural materials producers, thwarted by reduced prices for oil and agricultural commodities, accelerated their recent declines in Thursday’s trading. That’s contributed to the broad weakness in the equities market, as it’s deprived the averages of one of its stalwart groups of 2008. More frustratingly, it’s prevented some names from exploiting tremendously constructive quarterly results. Shares of Potash (POT) surrendered modest intraday gains, and amidst a choppy session, have moved back to opening levels. That’s given it little leverage to second-quarter earnings of $2.82 a share that beat forecasts by 21 cents. Its gross margins increased … by 240%. Fertilizer sales increased a little less than 100% on a year-over-year basis. It raised its forecast for the current quarter and the full year. Nevertheless, the price of corn has acted as the effective gatekeeper on investors’ reactions to the results. And corn prices in the commodities markets haven’t been very accommodative. In fact, corn prices have declined 24% in the futures market since the start of July. The declines in the energy market, where crude has retreated as much as $20 a barrel (to the bargain price of $120), has affected the outlook for other commodities. The rise in the dollar, also tied to the energy outlook, has contributed another stress point. Potash shares have declined 22% since the high on June 17. Other fertilizer makers have declined, as well. Agrium (AGU) lost 25% since its June 18 high. Mosiac (MOS) has fallen 30% in that time.