This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Dicker: Opportunities in Fertilizer Companies

Stocks in this article: POT MOS

NEW YORK ( TheStreet) -- I was talking today to Joe Deaux about the collapse of the fertilizer stocks and whether there was an opportunity being created. I think there is.

What happened overnight was a statement from the CEO of one of the six largest providers of potash in the world, which collectively control 90% of the world market. CEO Vladislav Baumgertner announced his company, Uralkali would be breaking up its sales venture with another of the big seven providers in Belarus -- Belaruskali. He predicted that potash prices would plummet to under $300 a ton by the end of the year, a 25% drop from current prices.

The rumblings between old Soviet states' companies arguing and playing chicken games with price wars has the rest of the potash-producing company stocks, including Potash Corp. of Saskatchewan (POT) and Mosaic (MOS), reeling. A breakup in the cooperation of the Russian potash providers threatens a market flooding designed to destroy the lesser players.

I don't believe it much. The Russian commodity titans created by perestroika are world renowned for big-money hardball threats. The truth is that sales arrangements between the Russian companies have been routinely ignored by many of the bigger players. That overproduction of "quotas" has hurt the price of potash in 2013, angering the smaller producers like Uralkali and leaving them few options besides threats to explode the collective price-fixing arrangement entirely.

Canadian potash giant Potash is down about 20% Tuesday and U.S. potash company Mosaic is down about 19%.

But none of these companies wants a price war, and I think they'll ultimately avoid one. Uralkali is looking for promises from the largest potash producers to stay in line with production limits that they've already defined. With those promises, all will again be well with the potash "cartel."

One way to try and take advantage of this quick downturn in fertilizer shares would be to buy calls in a company like Mosaic.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,779.11 +0.96 0.01%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs