HARTFORD, Conn. (AP) ¿ Investors sold shares of several farm equipment makers Wednesday after the group logged large gains since March, analysts said, with one analyst saying there is some concern that projected low prices in the upcoming crop season could hurt equipment sales. Caterpillar Inc., Deere & Co. and AGCO Corp. have risen as much as 74 percent since early March and shares of CNH Global NV more than doubled in the same period. Wednesday, the companies' shares were down between 3 percent and 5 percent as the broader market sank by about 2 percent. "These stocks had pretty big runs so there's some profit taking," said Eli Lustgarten, an analyst at Longbow Research. In addition to cashing in on recent gains, investors are also expressing "general fear of a continued economic slowdown," Gabelli & Co. analyst Heiko Ihle said. A U.S. Department of Agriculture report issued Tuesday on world agricultural supply and demand estimates for the 2009-2010 crop year shows that crop supplies will be ample, resulting in some commodity prices that will be between flat and down from the previous year. If farmers bring in less revenue they are less likely to buy as much new equipment.
The outlook for farm equipment sales also will be "flat to downish in the next year," Lustgarten said. Caterpillar slipped $1.98, or 5 percent, to $36.08 in afternoon trading and Deere and Co. fell $2.61, or about 6 percent, to $41.10. Still, analyst Stephen Volkmann of Jefferies & Co. Inc. said in a note to investors that proposals to increase ethanol blending for fuel could boost agriculture markets. He said he expects equipment sales to hold up much better than most other machinery sectors. "Longer term, we believe reinvestment in ag infrastructure will be required to bring global supply/demand back into balance," he said. Volkmann also said Monsanto Co. herbicide sales could fall if rainfall is heavy in the north, reducing the time available to plant corn and also accelerating crop growth that could cut down on the number of herbicide applications. Monsanto was down 8 cents, to $90 in afternoon trading. DuPont, which was down 96 cents, or 3 percent, to $26.74, would be less at risk than Monsanto by excessive rain because it will likely offset lower herbicide sales in wet regions with more fungicide sales, Volkmann said.
Shares of farm suppliers declined. AGCO Corp. fell $1.10, or 4.3 percent, to $24.37 in afternoon trading and CNH dropped 96 cents, or nearly 6 percent, to $15.46.