A Fertilizer Play That Is Dirt Cheap

Agrium has opportunity to grow as fertilizer demand rebounds.

THE PROMISE OF SPRING IS EVERYWHERE -- except in Agrium shares. Like other fertilizer companies, Calgary, Alberta-based Agrium rode the boom in crop prices to unprecedented heights, only to plummet last year when commodities, agricultural and otherwise, went bust. In less than a year, most fertilizer stocks lost more than 60% of their value, which for Agrium meant a nose dive to $22 from $113. The stock (ticker: AGU) now changes hands at 41.

Look closer, however, and it is apparent Agrium's spring awakening is merely delayed. Demand for fertilizer, which tends to track corn prices, is likely to rebound as the global economy improves. In the meantime, the company is expanding its network of more than 870 retail farm centers in North and South America, in order to help reduce its dependence on commodity prices. A pitched battle for fertilizer rival CF Industries (CF) may be distracting investors from Agrium's sunnier prospects, but a victory surely would make Wall Street take notice.

One thing is clear: Based on multiple metrics, Agrium is dirt cheap. The stock trades for just 6.8 times this year's expected earnings of $6.11 a share and 5.8 times Wall Street's 2010 forecast of $7.14, well below other fertilizer stocks -- and the company's historic multiple of 14 times future profits. The shares fetch one to 1.5 times book value, less than half their five-year average.

Look closer, however, and it is apparent Agrium's spring awakening is merely delayed. Demand for fertilizer, which tends to track corn prices, is likely to rebound as the global economy improves. In the meantime, the company is expanding its network of more than 870 retail farm centers in North and South America, in order to help reduce its dependence on commodity prices. A pitched battle for fertilizer rival CF Industries (CF) may be distracting investors from Agrium's sunnier prospects, but a victory surely would make Wall Street take notice.

One thing is clear: Based on multiple metrics, Agrium is dirt cheap. The stock trades for just 6.8 times this year's expected earnings of $6.11 a share and 5.8 times Wall Street's 2010 forecast of $7.14, well below other fertilizer stocks -- and the company's historic multiple of 14 times future profits. The shares fetch one to 1.5 times book value, less than half their five-year average.

Richard A. Kelertas, an analyst at Dundee Capital Markets, cited such discounts when he initiated coverage of Agrium in January with a Buy rating. He later raised his 12-month price target for the Toronto-listed shares (AGU.Canada) to 61 Canadian dollars, some 21% above their recent C$50.47. (One Canadian dollar is about 82 U.S. cents.)

"The world has been on a wild ride, but agriculture probably has been the least wild of the bunch," says 57-year-old Chief Executive Mike Wilson, a chemical engineer who has run Agrium since 2000. Global grain demand has increased steadily in the past 20 years, with consumption rising by about 40 million metric tons a year, he notes. Given a growing taste for grain-fed livestock among the emerging middle classes in countries such as China and India, the trend is apt to continue, Wilson adds.

Tracing its roots to 1931, Agrium is the third-largest potash producer in North America. Agrium also makes and markets nitrogen- and phosphate-based plant nutrients, and is the leading agricultural-products retailer in the U.S. Its farm centers sell, among other products, seeds, insecticides -- and fertilizer. The company isn't "just a bet on fertilizer volume and prices," says Lawrence Franko, a senior equity analyst at Delaware Investments in Philadelphia. "It is kind of a back-door way to piggyback on Monsanto 's [MON] success without paying a high valuation."

Monsanto, a leader in genetically modified seeds, trades for about 20 times forward earnings.

With its purchase last May of distributor UAP, Agrium now owns 15% of the U.S. farm-retail market. Yet the company's retail operations represent just a quarter of last year's record $2.3 billion in earnings before interest, taxes, depreciation and amortization. Agrium aims to have retail plus its tiny advanced-technology business chip in half of Ebitda in the future, and perhaps as much as 70% when fertilizer is in a slump.

Potash Earnings Pounded, CF Results Crushed

Having already gotten a whiff of Mosaic's (NYSE: MOS) earnings, neither the weak results reported by PotashCorp (NYSE: POT) or CF Industries (NYSE: CF) are too big of a surprise. Even some gigantic guidance cuts were taken in stride.

Let's start with fertilizer titan PotashCorp, which missed analyst estimates by a country mile. Without the favorable impact of some tax adjustments, earnings were only $0.47 per share, versus the $1.02 reported.

The firm saw North American and international potash volumes plunge 86% and 78%, respectively. While phosphate and nitrogen volumes held up a bit better, potash really drives the economic engine here, as evidenced by the 73% drop in gross margin and the 71% collapse in cash flow before changes in working capital.

We've documented the recent potash market dynamics here, here, and here. There's not a whole lot to add at this point. While PotashCorp's principals may be beating the same drum when it comes to the longer term supply and demand fundamentals for potash, I have to agree that, as with crude oil, the outlook for this commodity is quite strong. In the meantime, PotashCorp is going to bear some pain, as exemplified by the firm's sharply lowered earnings guidance for the full year.

As for CF, which is locked in a heated takeover tussle-a-trois with Agrium (NYSE: AGU) and Terra Industries (NYSE: TRA), earnings also plunged. Overall, the firm's revenue and sales volume held up quite well, and gross margin in the nitrogen segment fell only 14%. Despite more than doubling export volume, the phosphate business really fizzled, however, reporting negative margins for the quarter.

With spring planting season arriving, hope springs eternal for this CF. The firm's got one of the best balance sheets in the space, even after its blitz of a buyback ($500 million worth at around $59 per share) during the fall meltdown. Investors appear ready to acknowledge green shoots here, as they bid up the stock today, and I'm pretty convinced that CF's got a fertile future as well.

Agrium Shares Are Ripe for Growth - Barron's

Now trading near $40 from a high of $113, fertilizer firm Agrium (AGU) was hit hard by the fall in commodity prices. On closer look, Barron's sees plenty of upside potential as fertilizer demand rebounds.

Fertilizer demand will likely pick up as the global economy improves, and in the meantime the company is expanding its network of over 870 retail farm centers in North and South America. The company is also in the midst of a hostile takeover bid for rival CF Industries (CF). Though CF rejected a sweetened offer by Agrium, proxy-advisory firm RiskMetrics/ISS says the deal may eventually happen.

By any measure, the stock is cheap. Agrium trades for just 6.8 times this year's expected earnings of $6.11/share and 5.8 times Wall Street's 2010 forecast of $7.14. This is well below other fertilizer stocks and significantly lower than the company's historic multiple of 14 times future profits. The shares trade at 1.0-1.5 times book value, less than half their five-year average.

CEO Mike Wilson notes global grain demand has increased steadily over the last 20 years, and the trend is likely to continue as emerging middle classes in countries like India and China develop a taste for grain-fed livestock. Wilson sees plenty of growth opportunity, even if the CF acquisition doesn't go through, and predicts a stronger second half on pent-up farmer demand.

Agrium is the third-largest potash producer in North America, and the leading agricultural-products retailer in the U.S. In addition to fertilizer, its farm centers sell products such as seeds and insecticides, making Agrium more than just a bet on fertilizer demand. The expanded retail network has given Agrium greater earnings stability and has shown management's skill at integrating acquired businesses.

Richard A. Kelertas, an analyst at Dundee Capital Markets, has a Buy rating on Agrium, and expects a 21% rise in the company's Toronto-listed shares over the next twelve months.
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Agrium: Q4 EPS of $0.79 beats by $0.15. Revenue of $1.985B (+33.0%) vs. $1.96B. (PR)
Agrium (AGU) launched a hostile, $72/share all-cash bid for CF Industries in February, representing a 42% premium on CF stock, conditional on CF dropping its bid to buy Terra Industries (TRA). In March, looking to build shareholder backing, Agrium boosted the cash portion of its hostile bid for CF by 10% - to $35/share from $31.70. Including stock, the offer valued CF at $74.90, but CF rejected the offer

Fertilizer Manufacturers Face an Uphill Battle

We continue to see further evidence of weak fertilizer demand, particularly for phosphates and potash products. Potash inventories for North American producers were recorded at 56% above their 5-year average in March. DAP inventory levels (diammonium phosphate)are also running nearly 30% above their 5-year average. These are indeed formidable surplus levels to work through in any market.

Increasing phosphate and potash inventories should come as no surprise to those following the standoff between farmers and nutrient dealers dating back to last fall. These latest inventory readings suggest that high-priced product is still not moving through dealer pipelines as retail price cuts have failed to match the proportional drop in grain prices. The supply increases are even more disturbing when we consider that producers have already substantially cut operating rates in recent months in anticipation of weak demand.

Weather delays to planting progress now have the potential to reduce marginal demand even further. The longer that we see cold and wet conditions persist in the northern regions of the grain belt, the greater the probability that growers will switch corn acres to soybeans or spring wheat. While corn acreage is expected to be flat year-over-year, spring wheat acreage intentions are down 6% from 2008 plantings.
Most growers’ crop insurance policies have locked in a soybeans:corn ratio near 2.2, which historically has favored planting more beans. Since the USDA’s Prospective Plantings report on March 31st, the SX:CZ ratio has actually increased by 11%. The market is telling us that corn is failing to “bid” for more acres this spring – a bearish sign indeed for marginal fertilizer demand.

Implications: as we have noted in previous studies, corn acres typically consume roughly 5.6 times more fertilizer than soybeans (measured by pounds/acre, combined nitrogen + phosphate + potash). Wheat in turn consumes roughly 2.2 times as much fertilizer as soybeans. Therefore a shift to more soybeans at corn’s and spring wheat’s expense will further erode marginal consumption this season.

We will have a clearer picture of actual acres planted by June. Until then, the trade will closely monitor the weather conditions to anticipate where planted acres will cross the finish line.

Terra Industries Down on Low Volume

Terra Industries Inc.'s (NYSE: TRA - News) slipped more than 1% today on low volume of 1.4 million shares, versus the average of 2 million.

In the last month, one analyst raised his forecast, pushing the 2009 consensus earnings estimate up by 13 cents per share to $3.48.

The company has surprised on estimates in each of the last 4 quarters by an average of 30.34%.

Terra Industries is a Zacks #1 Rank ('Strong Buy'). .zacks.com

Agriculture: Follow the Money

The futures markets are giving us further signs of speculative interest returning to the grains. The large speculators substantially increased their net long positions last week in corn, soybeans and wheat futures:

Traders are finding bullish support from multiple fundamental factors:

Reduced supply estimates: The USDA cut its U.S. ending stocks estimates for corn and wheat by roughly 2.2% each, while they cut soybeans a notable 11% from the March estimate. USDA also reduced the world carryover estimates for corn and soybeans, while adding a marginal increase for wheat.

Improving global demand: Weekly export sales came in above expectations once again for corn, continuing to build on recent strength. Soybeans sales cooled somewhat from their torrid pace in 2009, while wheat sales matched expectations. This latter point should be received as a victory for wheat given a weakening global demand picture and healthy global inventories.

Weather risks abound: After witnessing soybean prices move higher on steady South American drought throughout the winter, traders are closely monitoring the drought that is impeding wheat production in the southern US, while flooding and heavy rains delay corn and soybeans planting in the north. If we see the stormy weather persist, these delays could ultimately lead soybeans to gain acres at corn’s expense.

While the fundamentals continue to improve for the grains, the US dollar remains defiant to the Fed’s nuclear monetary policy. The dollar’s strength will work against further short-term upside in grain prices and suggests we may see a sideways trade persist until the dollar breaks down.

Rogers Likes Agriculture Over Oil and Gold

Rogers Likes Agriculture Over Oil and Gold

Famed investor Jim Rogers was on Bloomberg yesterday and had a few thoughts on oil, gold, and his new book - A Gift to My Children: A Father's Lessons for Life and Investing.

For at least the last year or so, he's been pretty consistent about his favorite investment over the short-term and there were no changes today - agricultural commodities.

On market bottoms:


I don't know if this is going to be as bad as the 1930s - it may well be. But a rally is not unusual at a time like this. We've certainly seen a bottom. Is this the bottom? I don't think so. I think we're going to see more bottoms in the next few years.
...
I would expect to see more problems. Probably this fall or next year we're going to see currency problems. We're going to see more bankruptcies, so there are going to be more problems in the financial markets which does not mean that we can't have big rallies.

We're having one.

I don't know how much longer it's going to last. I am not participating - at least in the stock part of the rally. I'm participating by buying commodities because, if the world economy is going to be better, commodities are going to be the best place to be. If the world economy is not going to be better, commodities are still going to be the best place to be, or at least the least bad place to be.

On whether to hold oil or gold through the rest of the year:

Of those two I would rather own oil. The IMF is trying to sell its gold. The IMF is one of the largest holders of gold, so you’ve got this huge supply overhang. Whether they sell it or not, the world is expecting them to sell it, so I'd rather own oil than gold.

I'd rather own agriculture than either.

Apparently he hasn't heard about the willing buyers in Asia for all the IMF gold - that seems to be the consensus opinion of nearly all who have commented on this subject. Interestingly, for as far back as I remember, Rogers has never been real bullish on gold simply because, in his view, central banks have too much of it and are more than happy to continue to sell it.

Potash Corp. /BHT Billiton: Could They Fit?

Rumours have emerged in recent days that mining giant BHP Billiton Ltd. (BHP) could take a run at Potash Corp. of Saskatchewan (POT). Yes, it's far-fetched, and it is hard to imagine any scenario where the Canadian government would approve such a deal (especially following the "hollowing out" debate). But RBC Capital Markets analyst Fai Lee ran the numbers anyway, and he thinks that the merger would make strategic sense.

"We view Potash Corp.'s potash assets as long-life, low-cost assets that can be expanded and are largely export-oriented. As such, we believe Potash Corp.'s potash business would represent a good fit with BHP Billiton's stated business strategy," he wrote in a note to clients.

BHP has stated that it wants to be a "major" player in the potash industry in the next decade, and it is already hard at work on a potash greenfield project in Saskatchewan. But to be a top producer of potash, Mr. Lee believes the company would have to do an acquisition.

He thinks a BHP-Potash Corp. combination could be accretive, depending on the premium paid to Potash Corp.'s shareholders. He assumed just US$25-million of synergies and a transaction financed with 65% debt and 35% equity. He used a potash price of US$625 a tonne in his analysis. If prices are 25% lower, he wrote that BHP could pay a premium of up to 45% on Potash Corp.'s current share price.

However, Mr. Lee also pointed out the obvious: BHP would have to face serious regulatory and financing hurdles to do a transaction like this. BHP would also likely want to retain the management team, he noted. That would make it important to get management's support for a merger, and it is no secret that Potash Corp.'s management thinks the stock price is grossly undervalued at these levels.

3 Reasons to Avoid PotashCorp

A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic never benefits investors, it's still good practice to play devil's advocate with investments from time to time.

In Motley Fool CAPS, more than 130,000 members have weighed in on more than 5,300 stocks, sharing bullish and bearish opinions alike.

In the case of fertilizer producer PotashCorp (NYSE: POT), a total of 4,546 members have weighed in on its chances of success. I've already plucked out some of the bullish rationale backing PotashCorp today, so here are three counterpoints to consider, courtesy of CAPS:

1. Oversupply
Mosaic (NYSE: MOS), Terra Industries (NYSE: TRA), and Agrium (NYSE: AGU) have already slashed production in other fertilizer product groups in response to a saturated supply chain. Recent data from the Fertilizer Institute shows potash inventories at North American producers are 42% higher than the previous five-year average, prompting PotashCorp to further cut its supply by 1.5 million tons.

2. Potash price pressure
Potential longer-term lower potash prices prompted Soleil Securities to downgrade PotashCorp. The company had been holding the line on prices, but a recent 25% price reduction between Belarusian Potash and Brazilian buyers could have a negative effect on PotashCorp's future bargaining power, making it tougher to keep margins steady on its prime mineral.

3. Weak farmer sentiment
The U.S. Department of Agriculture predicts farm income to decline 9% this year as farmers look to plant cheaper crops like soybeans, which require less fertilizer and farming equipment, to help offset the hit from lower commodity prices. This could affect the top lines across the board of companies involved in agriculture, including Monsanto (NYSE: MON), Deere (NYSE: DE), CNH Global, or even Terex (NYSE: TEX).

Of course, Potash has survived and thrived despite dozens of obstacles in the past. Will the company continue its success? When weighing questions such as this, CAPS makes a great resource to augment your own analysis..fool.com

3 Reasons to Buy PotashCorp

Whatever may be going on in the market or a specific company's history, there are always reasons to consider buying shares in a business. After all, some of the best opportunities in stocks are born from historically bloody times.

Motley Fool CAPS hosts a boatload of opinions from more than 130,000 members on more than 5,300 stocks, giving good reasons to own -- or sell -- a stock.

In the case of feed and fertilizer maker PotashCorp (NYSE: POT), a total of 4,546 members have given bullish or bearish opinions on the company. Scouring the detailed information packed in pitches and other comments on the company, I've dug up three of the top reasons to buy Potash today:

1. Cash aplenty
PotashCorp has expanded free cash flow at a rapid clip over the past years, thanks to expanded demand for fertilizer in developing nations. Despite the uncertainties in potash pricing facing PotashCorp and rivals such as Agrium (NYSE: AGU) and Mosaic (NYSE: MOS), many CAPS members believe the company has enough leverage to continue to generate solid cash flow far into the future.

2. Competitive advantage
Interesting changes are afoot in the industry, including BHP Billiton's (NYSE: BHP) new potential potash mine plans, and Rio Tinto's (NYSE: RTP) potash assets sale to Vale (NYSE: RIO). But market leader PotashCorp still runs the show, with annual potential production that represents more than 20% of the world's capacity. The depth of its operations allows the company to expand capacity at its existing mines to bring a much quicker return on investment than many other competitors.

3. Rebound around the corner
Intrepid Potash (NYSE: IPI) has been increasing its production lately, and PotashCorp similarly predicts a strong rebound in potash demand in the second half of this year. It also foresees an increase in potash imports from China. Since potash is a necessary commodity, even in bad times, producers like PotashCorp hold the recipe for long-term success.. fool.com

Fertilizer Winners and Losers: Monsanto

Monsanto(MON Quote - Cramer on MON - Stock Picks) shares were down slightly in late-afternoon trading Friday after it was downgraded in the morning by JPMorgan.

Monsanto was down 70 cents, or 0.9 to $80.71 after it reported a 3.9% decline in fiscal second-quarter profit after Thursday's market close. JPMorgan downgraded the agribusiness giant from overweight to neutral, citing decelerating earnings growth.
Monsanto did see a 19% jump in corn seed sales for the quarter and a 35% jump in soybean sales.

The rise in corn sales came from higher seed prices, said CEO Hugh Grant.

While Monsanto didn't win big market-share advances during the quarter, Grant said higher profit margins on corn seed show the St. Louis-based company is executing its strategy of boosting profits by developing new traits for staple crops like corn and soybeans amid a growing global demand for food and crop-based fuels.

"We've stayed on course because we have maintained our focus," he told investors during a conference call Thursday.

Among shares of other companies engaged in the fertilizer business, Mosaic(MOS Quote - Cramer on MOS - Stock Picks) was up 3.5%, or $1.52 to $45.39.

Intrepid Potash (IPI Quote - Cramer on IPI - Stock Picks) was up 2.5%, or 50 cents to $20.55.

Agrium(AGU Quote - Cramer on AGU - Stock Picks) was higher by $1.41, or 1.9%, at $39.30.

CF Industries(CF Quote - Cramer on CF - Stock Picks) was up 1.9%, or $1.41 to $74.08

Potash(POT Quote - Cramer on POT - Stock Picks) was higher by 1.1%, or 92 cents to $85.68.

Terra Industries(TRA Quote - Cramer on TRA - Stock Picks) was up 24 cents, or 0.9% to $27.89.

Scotts Miracle Gro(GRO Quote - Cramer on GRO - Stock Picks) was down $1, or 2.7%, to $35.78.

Is Monsanto a Template for Agribusiness?

Agricultural giant Monsanto Co.'s (NYSE: MON) second-quarter profits beat analysts' estimates, giving the company's shares a 3.6% boost at Friday morning's opening. The world's biggest seed maker actually reported a 3.2% slippage from year-ago earnings, despite increases in corn and soybean revenues.

Positive earnings surprises are nothing new for the St. Louis, Mo.-based firm. Over the past four quarters, analysts have underestimated Monsanto's earnings per share, on average, by 35%.

Monsanto delivered net earnings of $1.97 per share in its second quarter. Excluding extraordinary acquisition and settlement costs, the company earned $2.16 per share. The green eyeshade set was looking for profits of $2.09 per share.

Monsanto's second-quarter results are usually predictive of the company's overall performance. Orders for spring planting are reflected in the quarter's seed revenues. This time out, Monsanto's soybean sales soared 35%, while revenue from seed corn jumped 19%.

Monsanto's also closely watched as a bellwether of the broader agribusiness sector's direction. The company makes up 7.7% of the Market Vectors Agribusiness ETF's (NYSE Arca: MOO) market capitalization, making it the fund's fourth-largest component.

Monsanto has an outsized impact on the ETF's performance. Over the past year, the correlation between Monsanto's and the Market Vectors fund's performance was clocked at 79%.

Naturally, observers are wondering if Monsanto has more surprises in store and, if so, if that signals better times ahead for holders of the ag ETF. For its part, Monsanto's still looking for full-year profits of $4.40-$4.50 per share.

Both Monsanto and the entire ag sector represented by the fund have been languishing in a trading range since last fall. The Market Vectors ETF has, in fact, bumped up against overhead resistance at the $30-$31 level three times, most recently just last week. The technical momentum for another run at an upside breakout is building now. An encouraging sign is the upside crossover in the moving averages for the MOO/GCC ratio.

The ratio gauges the relative strength of the Market Vectors ETF against the GreenHaven Continuous Commodity Index ETF (NYSE Arca: GCC), much as the GLD/GDX ratio (see "Gold Stocks' Time To Shine") plots bullion against gold mining stocks.

Since the GreenHaven portfolio is based upon futures, not stocks, the resurgent equity market is reflected in the MOO/GCC ratio's gathering strength. With the stock market wind, in part fanned by surprises from issues such as Monsanto, at the Market Vectors fund's back, the likelihood of a breakout run through $31 to the $38 level increases.

MON Beats Estimates on Record Net Sales

Monsanto Co.'s (NYSE: MON - News) second-quarter earnings topped the consensus estimate as the world's leading seed company reported record net sales of $4 billion.

Monsanto's earnings, excluding items, stood at $2.16 a share, beating analysts' estimate of $2.09. However, in the year-ago quarter, the company earned a profit of $1.79.

The company reaffirmed its full-year 2009 estimate for earnings of $4.40 to $4.50 a share while the average forecast is pegged at $4.69 per share.

Monsanto is 'on track for more than 20% growth in earnings for the full fiscal year,' said CEO Hugh Grant in the report.

Shares of MON, a Zacks #2 Rank ('Buy') company, dipped more than 3% in the morning trade..zacks.com

Grain Prices Require Substantial Support to Overcome Bearish Fundamentals

Yesterday morning, the USDA published their annual Prospective Plantings report and their quarterly Grain Stocks report, which provides market participants with key fundamental information to better position themselves for the upcoming season. Here is a summary of the estimates and price implications:

Corn
Corn acreage intentions are down 1% from 2008 plantings to 85 million acres, slightly higher than the trade’s expectation of 84.548 million. While the consensus for a reduction was realized, this is still an impressive number in the face of expensive inputs, tight credit and a locked-in soybeans:corn ratio that favors bean acres for most growers’ crop insurance policies. While total stocks are up only 1% over last year, “on-farm” stocks (held at mills, elevators, warehouses, terminals, and processors) are up 8%, and off-farm stocks are down 7% year-over-year. This tells us that growers will still be looking to sell into price rallies to unload their remaining old crop.

Soybeans
Bean acreage intentions are up marginally from 2008 plantings to a record 76 million acres. This number is 4% lower than the trade’s expectation of 79.251 million. On-farm stocks are up 11% versus last year, while off-farm stocks are down 23% from 2008, reflecting marginal Chinese purchases diverted to the US from South America. This boost in demand is attributable to the farmers’ strike in Argentina and drought impacts for both Argentina and Brazil. The combination of record soybean acres and a return to normal export balances later this year implies a substantial expansion of US supply for 2009/10.

Wheat
Spring wheat acreage intentions are down 6% from 2008 plantings to 13.3 million acres. However, the wheat story is dominated by ever-growing supplies: on-farm stocks are up a whopping 205% over last year, while off-farm storage is running 23% above last year’s levels. The price effect of this supply surplus is exacerbated by the weakening demand picture. The USDA’s recent estimate of wheat-consumption-for-food was reduced to its lowest level since the 2005-06 marketing year. The weather risks to winter wheat and spring wheat this year will have limited impact on prices until renewed consumption can eat through existing supplies.

Bottom line: grain prices will require substantial support from a weaker dollar and institutional investment to overcome bearish fundamentals.