Well, Donald Coxe (global portfolio strategist for BMO) believes that the grain prices are now greatly underpriced on a supply/demand ratio. He also has been right, and has accurately predicted that global temperatures are cooling due to lack of sun spot activity over the last few years. So, the demand for grains will increase as supplies decrease somewhat due to lower production in various areas of the world. There will be new demand for gold, grains and metal and oil prices should move back to low triple digits. Commodity stocks are way oversold he believes, so taking it all into consideration, potash is probably a safe bet going out over the next year.

However here is another analyst’s take:

“Potash prices are of particular concern… they have been resilient when history suggests

that they can pull back significantly during global economic slowdowns… take note of

potash prices during the commodity market pullback of the 70s, which in our opinion had

similar characteristics to the current market… wishful thinking that we won’t have a sizable correction this cycle…. (remember how met coal prices were bullet proof a month ago?)

Ags and Ag Stocks

These lofty expectations are contributing to lofty earnings forecasts… using Potash Corp asa proxy for the group, you can see that analysts’ earnings expectations are still way too

lofty…especially when compared to a diversified mining name like BHP. The below chart illustrates normalized 2009 analyst annual earnings estimates over the past year… you can see the huge run up in POT estimates relative to the diversified miners… you can also see how they have barely corrected… these are waaaaaaaaaaaaaaay too high…

So earnings are too lofty relative to the diversified miners… Ag names are also trading

technically stretched relative to the mining names… the below graph illustrates the ratio of Ag stocks vs. mining stocks (left margin blue line) and the deviation of this relationship from the 52 wk trend (right margin).”

This may be confusing but I know little of the area as I am sticking with the PMs.

Sorry....I couldn't post the charts and tis last analysis is confidential as it is someone I know. Good luck.