CF Industries Holdings Inc.  (CF) Trade Now »     Rate CF  -  Discuss CF  -  Add to Watch List        

By Dr. Declan Fallon

CXO Advisory Group monitors a lenghty list of Gurus and their related market calls. But the rankings are misleading for the reasons given below. The current list of leading gurus who have an accuracy call of 50% or higher is given below. Click to enlarge:

I was on Fox Business Network’s Happy Hour show last night. Co-host Cody Willard and I discussed the agricultural sector. Cody peppered me with questions about the sector, injecting his opinions that the sector may itself be overgrown.

My response was that I believe that seed companies like Monsanto (MON) are too richly valued and do not make compelling investments at this juncture. For the record, I have traded in and out of MON the past one or two years but have no positions at the current time.

The agriculture bull market is in full swing and the prospects for the industry keep growing stronger. Agriculture is entrenched in supporting the basic needs of humans and is vital to the sustainability of a growing population. In fact, 45% of the world's workers are employed in agriculture. Recently, prices for crops have skyrocketed as farmers produced less food last year than was consumed, and stockpiles have been drawn down to 30-year lows.

I think this might be the busiest day all month for our holdings'' earnings... <!--more-->before we get to that, first a quick note on the market.

Thanks to a reader who sent me one of the 2 analyst reports.

Fertilizer producers and distributors are in a very real bull market trend at this time as one of the only industries to thrive in the current environment.<!--more--> Two of the companies in this sector hit new 52 week highs early last week: Mosaic (MOS) and CF Industries (CF). I am hesitant to put a large portion of a portfolio into one sector, as Bulk Shippers looked great for a period last year and then collapsed, but the fertilizer companies look too attractive at this time to not be a little overweight on them.

On April 4, 2008 MOS will report.

This is what they will say....

"The previous quarter was a record breaking quarter for both revenue and profits. We see this continuing through 2008 and are raising our sales projections for 2009."

The trade report is out. Just as expected with the USA paying 3 times more for natural gas, the USA cannot compete with the world when it comes to fertilizer sales.

Imports of fertilizer iINCREASED by $98 million last month

Exports of fertilizer DECREASED by  $9 million last month

The industry is getting squeezed on both ends. When 90% of the cost to produce fertilizer is 3 times cheaper in many parts of the world this is what is expected. NET SSALES IN 2009 will SLIDE inot the tolitio. By 2010 the industry may very will be dead!!!!