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Updated from 11:34 a.m. EDT

Agriculture stocks have been lighting up trading screens across Wall Street all week. Even when the entire stock market was dropping, this sector was bucking the downtrend and trading sharply to the upside.

Names such as

China Green Agriculture

(CGA) - Get China Green Agriculture, Inc. Report


Potash Corp. of Saskatchewan





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Terra Industries


have all been ripping higher as investors bid up the entire sector off of Tuesday's World Agriculture Supply and Demand Estimates report. The report said U.S. commodities production will drop slightly while consumption will increase in May compared with last month. This drop in production will result in a reduction in world stocks.

Another positive report for the ag sector came out on Wednesday from the USDA. The report said for 2009 and 2010 the USDA expects the second-highest corn yields in history and extremely low stocks-to-use ratios. One more bullish data point for the ag sector was the China trade report that showed a 55% increase in soybean imports since last year.

Potash Corp., the world's largest producer of potash, said on Thursday that the company will continue to curtail output until demand from China increases. Potash's CEO, Bill Doyler, said that the annual talks on pricing between China and global potash producers are expected to conclude by the end of June. Apparently investors are anticipating that the talks with China and the world outlook for pricing are heading in a bullish direction as seen by the strong upside action in the stocks.

With this in mind, let's take a look at a few ag stocks that could be setting up to make a significant move.

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