MOS rose 8%, POT 5% last night. Things are turning for the...

MOS rose 8%, POT 5% last night. Things are turning for the fertiliser sector. The following article mostly talks about potash, but taken in conjunction with the outlooks in CRU Fertiliser Week and last weeks FMB Phosphates report the outlook applies to phosphates as well.

"Mosaic, Potash Up on Bouyant Remarks

By Scott Eden

NEW YORK (TheStreet) -- Top executives at fertilizer giants Potash(POT Quote) and Mosaic(MOS Quote), in town Wednesday for a basic-materials conference put together by Citigroup(C Quote), made some sanguine remarks about a recent burst in demand for the crop-nutrient potash.

Investors appear to have responded briskly, bidding up the two companies' shares in hectic Wednesday action. By the Wednesday close, Potash's stock price had gained 5% to $122.38, while Mosaic had leapt nearly 8% to $61.69. Volume in the latter name was intense, approaching 13 million shares, more than double the daily average.
Potash CEO Bill Doyle in particular added fuel to a recent rally in agricultural shares when he said during a luncheon talk that domestic demand for potash in November reached levels not seen since May 2008, before the financial crisis and the depths of the recession. "November is normally a lousy month, but it was the best month in a year and half," Doyle said. "We're seeing a return to a more confident customer out there, not only in North America but around the world."

All year long, the company had been ratcheting down its forecasts for global potash demand as the industry wrestled with a recession-induced collapse in crop growing and, therefore, fertilizer use. "In the history of the fertilizer industry this is the most serious decline in consumption, with the most rapidity," Doyle said. "We've never seen anything quite like this."

Still, optimism otherwise reigned as Doyle addressed a ballroom full of investors and analysts. In his opening remarks, Doyle predicted a return of the potash market to normal levels in 2011 and once again reiterated the long-term narrative that Potash has always trumpeted: that global population growth will eventually require more and higher-yielding crops.

Mosaic, too, contributed to the optimism with a Wednesday presentation by the company's finance chief, Larry Stranghoener. Though he gave no specific financial guidance, Stranghoener echoed the comments out of Potash about a recent pickup in demand from customers, whose inventories have fallen to extreme lows.

As for the relative severtity of the move in Mosaic's stock price Wednesday, the company's shares have lagged those of its Canadian rival, and investors may have been playing catch up, suggested Edlain Rodriguez, a stock analyst at Broadpoint Gleacher. "People are getting more comfortable with the 2010 story," he said."

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