A major story for stocks in 2011 will be the agricultural sector, as the upward cycle has definitely arrived, as stocks like CF Industries (NYSE:CF), Agrium (NYSE:AGU), Potash Corp (NYSE:POT) and Mosaic (NYSE:MOS) all soar in anticipation of major orders.
The only question is if this will be a typical upward swing in the cycle, or the growth and demand in emerging markets will make this something much more long term than usual. I think it's a long-term trend that has arrived, although it's still sure to be a bumpy road at times, based on macroeconomic forces.
Higher grain prices are behind most of the optimism, as farmers are poised to order more fertilizer and machinery in response to a profitable year, after holding off for some time.
Some fertilizers can remain in the ground for more than one year, allowing farmers to order lower amounts, or in some cases, to skip a year. Now they're ready to replenish many things that have been pent up.
Potash Corp. closed Wednesday at $144.93, increasing by $1.18, or 0.82 percent. Mosaic ended the day at $68.49, gaining $0.86, or 1.27 percent. CF Industries surged to $124.04, rising $3.27, or 2.71 percent. Agrium was up to $83.06, gaining $2.83, or 3.53 percent.
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