Citi Bullish on Ag, Says Buy MON, MOS, POT

[Stocks-to-Watch]

Yesterday, we noted how fertilizer names saw dramatic rebounds in their share prices during the trading day, despite the overall market decline.

Today, Citi analyst P.J. Juvekar put out a research note reiterating his Buy ratings on Monsanto (MON), Potash Corp. of Saskatchewan (POT), and Mosaic (MOS),* “pure-play producers which have the greatest earnings leverage to rising fertilizer prices.”* The note is in response to* the USDA Agricultural Outlook Forum in Washington D.C., where experts projected 20% growth in farm income 2011, and tight inventories that could take several years to restock.

Juvekar noted that while the total planted acreage this year will be at its highest levels since 1998, tight grain supplies, especially for corn and soybeans, should counteract increased crop yields.

“Strengthening demand from China for soybeans and cotton will result in the country overtaking Canada to become the largest destination for US exports in 2011,” he also wrote in a research note out today.

In addition, Juvekar sees the limited acreage available, productivity pressures, and recent regulatory rulings as catalysts for increased use of* biotech in agriculture–beneficial to Monsanto as well as DuPont (DD), which he also rates a Buy.

Monsanto was up 0.4% just before noon, Potash gained 0.7%, and Mosaic rose 1.%. Juvekar notes that of the three, Potash is his top pick.



Original Article Source by Barrons.com