Canadian potash suppliers boosted by improved earnings forecasts
Canadian potash suppliers Agrium Inc (NYSE:AGU) and Potash Corp. (NYSE:POT) both closed higher on the NYSE following the release of improved second-quarter earnings forecasts by Agrium on Wednesday.
Agrium announced that Q2 adjusted EPS would be within the range of $5.40 and $5.50, compared to prior forecasts of $4.18 to $4.78 per share. The company imputed the raised forecasts to strong results for the entire range of its crop input business.
Agrium shares surged to a four year high on the bullish news.
The improvements have investors eagerly anticipating the release of quarterly results by Agrium's bigger compatriot rival, Potash Corp, which is the world's largest potash producer and the third largest producer of nitrogen and phosphate.
According to Reuters, the fertilizer sector has been one of few areas of optimism for investors over the past several weeks, due to drought conditions in the key corn growing areas of the United States which will boost nutrient demand prior to next year's planting season.
The Ottawa Citizen also reports that fertilizer inventories are low across North America, and that even if farmer demand remains weak distribution channels will still need to be restocked.