Ag and Nat Gas Can Be Bought Up Here

It doesn't seem right that Potash (POT - commentary - Cramer's Take) could hit $200. That Agrium's (AGU - commentary - Cramer's Take) now over $80. Monsanto (MON - commentary - Cramer's Take) is back, and at all-time highs. Or Devon (DVN - commentary - Cramer's Take) and Apache (APA - commentary - Cramer's Take) and Anadarko (APC - commentary - Cramer's Take) and Southwestern (SWN - commentary - Cramer's Take) and XTO (XTO - commentary - Cramer's Take) and Chesapeake (CHK - commentary - Cramer's Take) are just rolling up again. It seems almost ridiculous that you could see that kind of momentum. These are multiyear moves being put in on in a matter of months.

But these moves speak to something so fundamental as to be outrageously obvious: Oil is not going back to $70, where ag plantings might be unclear and nat gas might be just a bit better than oil. It is not going back to $80, where it made good economic sense to get more fertilizer or drill for more natural gas. It may not even go back to $90, where food for oil is outrageously profitable and natural gas is a shoo-in.

A retreat to $100 seems hard now.

As someone who has been saying that oil is headed to $125 -- been my thought now for two years -- I have to say that these prices for these ag and nat gas companies are NOT TOO HIGH to pay.

Sure, everyone should wait for a pullback in every commodity. But as you wait for the pullback, remember that the underlying thesis is about as solid a thesis I can remember: Oil as too high with no supply coming out.

You have to remember that oil is like Treasury bonds. Everything is priced off of it. There are total aberrations out there, including the price of natural gas, which is just way too cheap and has to head higher. The natural gas companies I listed above predicted this, got it right, and are making fortunes. The fertilizer companies simply don't have a lot of competition. It is nirvana time for both.

Do I think oil can retreat to $110? Yes. But you will have to buy these stocks if it does, and it will feel horrible when you do.

As horrible as it has every other time that oil has dropped and everyone calls the big oil move OVER!

At the time of publication, Cramer was long XTO.

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