“Our analysis suggests that if corn and soybean yields drop to last year’s relatively poor levels, global grain stocks-to-use could drop to 66 days, which would be the third-lowest inventory level in the last decade,” National Bank Financial analyst Robert Winslow wrote in a note to clients, describing a key industry measure of supply to demand.
“Under such a scenario, grain prices could, all-else-equal, return to the high levels of mid-2011 when ag equities were driven to recent cyclic peaks.”
Winslow raised his price target for Potash Corp.’s New York stock to US$47.50 from US$35.50 and increased Agrium’s New York target to US$97.50 from US$71. He upgraded both stocks to “sector perform” from “underperform.”
Other fertilizer companies also rose with support from rising corn, a heavy fertilizer user.
