The perceived short-term impact of the Prospective Plantings report can be seen in fertilizer stocks. For example, CF Industries and Terra Nitrogen are focused on the production of nitrogen fertilizers. Potash Corp. and Mosaic are more diversified. Industrial corn farming requires intense nitrogen usage. Given the dive in prospective corn plantings, investors have concluded CF Industries and Terra Nitrogen will experience moderately less revenue growth versus their less nitrogen-dependent peers.
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Over a period of months, this short-term divergence will diminish. With worldwide warehouse stores of grains at multi-decade lows and rising incomes in Asia creating a sharp increase in the demand for grains, we expect to see a multi-year upward price spiral for nearly all agricultural products. High wheat and soybean prices and crop rotation needs are attracting American farmers today, but corn prices blasted higher leading up to and following the Prospective Plantings report. We're happy with the Investor Intelligentsia model portfolio weightings, but we view the pull-back in CF Industries and Terra Nitrogen as opportunities for fresh capital.
Over a period of months, this short-term divergence will diminish. With worldwide warehouse stores of grains at multi-decade lows and rising incomes in Asia creating a sharp increase in the demand for grains, we expect to see a multi-year upward price spiral for nearly all agricultural products. High wheat and soybean prices and crop rotation needs are attracting American farmers today, but corn prices blasted higher leading up to and following the Prospective Plantings report. We're happy with the Investor Intelligentsia model portfolio weightings, but we view the pull-back in CF Industries and Terra Nitrogen as opportunities for fresh capital.
Rising agriculture prices will be with us for years to come. Companies that provide the inputs to increase efficiency and expand production are absolutely essential in meeting the needs of escalating crop prices. These agriculture stocks have witnessed huge moves, but this is not a bubble and the industry leaders will continue to see tremendous growth for years to come.
Model Portfolio Update
Model Portfolio Update
On the open, we're going to up our exposure to the solar power industry. We will add another 350 shares to our SunTech position, along with 500 shares of Trina Solar and 400 shares of LDK Solar. Last year, these stocks moved through a full bubble and crash. They're now attractively valued and under accumulation.
We're going to experiment with Google's "Documents" website. We have uploaded the portfolio spreadsheet and you can click here to see the portfolio. Previously, we used an image file. Now that the portfolio is much larger, an image file is not very practical. We'll give Google a try for a while.
All March 25th positions were established at the market open prices in the US and Canada. Silvercorp Metals' is recorded using the opening price on the Toronto Stock Exchange times the US/Canadian exchange rate open on the same morning: 0.985. We use the primary exchange listings for holdings and adjust for currency exchange rates in order to display as realistic as possible US dollar accounting of the model portfolio. However, to reiterate for our US-based readers, it's possible to buy the same securities in their over-the-counter versions and quotations. The tickers are usually five letters, and you can look them up at Pinksheets.com or fine quote servers such as StockWatch.com during non-market hours.
We will return this week with promised analysis on the wild swings in precious metals prices. Thank you for reading, and do enter your email address into the subscription box above. We don't sell addresses. We only use your address to send an alert when something new has been posted to Investor Intelligentsia.
