Potash Pops on Surprise Profit Outlook

Meanwhile, after a long recession-induced slide during 2009, it appears that global prices for potash have bottomed. Friday morning, as expected, the big Russian potash-marketing consortium, BPC, agreed to a contract price with India to sell potash to distributors there for $370 a ton -- $20 more than the prices agreed to with buyers in China late last year and last month.

In North America, as the spring planting season approaches, agriculture pros expect potash prices to reach more than $400 a ton.

That's still far less than the $1,000 a ton fetched by the nutrient at the peak of the boom, but analysts and investors are apparently betting that the long-awaited bounce in potash prices has arrived, which would usher in another cycle of stair-step profit-guidance revisions by potash producers. "That always gets people excited," Rodriguez said.

All the optimism comes a little more than two months after Potash spooked the market by issuing first-quarter and 2010 financial forecasts far below what Wall Street analysts had expected. But that warning, which the company included in its fourth-quarter report on Jan. 28, appeared to have a cathartic effect, resetting what some observers believed had been unrealistically bullish expectations for potash prices this year.

After Thursday's market close, Potash said it now foresees first-quarter earnings of $1.30 to $1.50 a share -- much higher than the scaled-back targets (70 cents to $1.00 a share) the company told the market to expect in January. Evidently, new evidence from its customers suggested to Potash that it had gone too pessimistic with its earlier predictions.

Potash also said it expects to take in "record" sales volumes in North America in the first quarter.

Other fertilizer companies were popping early Friday on the buoyant news out of Saskatchewan. Shares of Mosaic(MOS), the U.S.'s biggest potash miner, jumped 6.4% in morning trading to $63.75.

Intrepid Potash(IPI) shares were surging 8% to $30.73.

Shares of Agrium(AGU), which also made news Thursday evening by giving up its yearlong pursuit of rival fertilizer producer CF Industries(CF), were up 7.5% to $71.77.

-- Written by Scott Eden in New York

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