Fertilizer Winners & Losers: Potash - TheStreet

Updated to account for closing stock prices.

NEW YORK (

TheStreet

) -- The fertilizer industry grew whiter and hotter Monday following a pair of stock upgrades from sell-side analysts and yet another chapter in the ongoing soap opera that is the three-way takeover battle between

Agrium

(AGU)

,

CF Industries

(CF) - Get Report

and

Terra Industries

(TRA)

.

Pacing the gains in the fertilizer sector Monday were shares of

Agrium

(AGU)

, which rose 4.8% to close the regular session at $60.31, and

Potash

(POT)

, which advanced 3.5% to $121.17, the former upgraded by

UBS

(UBS) - Get Report

and the latter by

Goldman Sachs

(GS) - Get Report

.

The story everyone is telling themselves is simple: Demand for crop nutrients has apparently rebounded from the epic collapse a year ago amid the Great Recession.

Goldman's Robert Koort lifted his rating on Potash to buy from neutral and set a 12-month price target on the stock of $140. With the bullish call, Koort appeared to be referencing

recent remarks

from executives of both Potash and its rival

Mosaic

(MOS) - Get Report

, who were in New York last week to give speeches at a

Citigroup

(C) - Get Report

-sponsored investor conference.

"Over the past few weeks, data points have confirmed returning demand," Koort wrote in his note, "and we believe

Potash offers the most attractive way to play the potash recovery." He added that even though "investor sentiment" surrounding ag stocks has recently improved, driving share prices higher, "we believe we are still in the early phase of this upcycle."

Mosaic, another big miner of potash, also saw its stock price strengthen Monday. Shares of the Minnesota company finished the session at $59.94, up 2.8%.

Agrium shares, meanwhile, touched a new 52-week high earlier in the session, apparently benefiting from the UBS upgrade. The company is locked in a hostile takeover battle with CF Industries -- which has been trying to acquire Terra Industries since January -- a three-way drama sparked when fertilizer share prices fell to their lowest point in years.

But now, a UBS analyst wrote in a research note, "The market appears to view 2010 as a transition to a more normalized level of demand in 2011," adding that word from farmers and ag-product dealers supports the notion that fertilizer demand is strengthening.

Meanwhile, in the latest development in the Fertilizer Wars, CF announced Monday that it had

sweetened its offer for Terra

by 10%.

Terra shares jumped 4.7% Monday to close at $41.27, while CF added 1.1% to $89.56.

-- Written by Scott Eden in New York.

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.