Ferts pummeled on NYSE, lose as much as 40%

02 October 2008 22:54  [Source: ICIS news]

HOUSTON (ICIS news)--Shares of fertilizer companies were hammered on the New York Stock Exchange on Thursday, losing as much as 40% in what an analyst called one of the industry’s worst trading days in history.

Weaker corn values, uncertainty hovering over the global economy, analyst downgrades and a lower-than-expected earnings all contributed to the woes of US and Canadian fertilizer makers.

“I think it’s the deflationary environment with everything. We can’t have corn prices go down, energy prices go down and the stock market go down and expect the farmer to continue to pay the high price of fertilizer as the price of the product he sells goes down,” said analyst Don Roose of Des Moines, Iowa-based US Commodities.

Leading the decline was Mosaic, which closed at $39.65/share (€28.15/share) after losing $27.86/share or more than 41%. A day earlier, Mosaic released earnings that fell short of estimates of analysts questioned by Thomson Financial, according to Reuters.

CF Industries lost $30.64/share, or nearly 35%, to close at $58.00/share.

Potash Corporation of Saskatchewan (PotashCorp), the industry giant whose shares were worth more than $240 in June, fell $34.53/share, or nearly 27%, to close at $93.51/share. Shares of the company dipped as low as $92.50 in intraday trading, setting a new 52-week low.

Agrium lost $13.29/share, or more than 24%, to close at $41.61/share.

Roose said one of the biggest factors behind Thursday’s collapse was the falling price of corn. The futures contract for December delivery slipped another 30 cents/bushel on the Chicago Board of Trade (CBOT), the exchange’s maximum daily limit.

Including Thursday’s losses on the CBOT, corn for December delivery has now fallen 88 cents/bushel, or more than 16%, in four trading days to $4.54/bushel.

Overall, the Dow Jones Industrial Average plunged nearly 350 points.

The US Senate has since passed a $700bn bailout measure and sent it to the House of Representatives.

Roose said, “Maybe after you get a general vote of confidence across everything, you’ll reach some stability.”

($1 = €0.71)

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Author: David Rosen
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