Reuters analysis says potash companies sell-off probably overdone

In an analysis that ran on August 17, Reuters said that while falling crops prices have dogged shares of potash producers in recent weeks, the sell-off in these crop nutrient makers appears overdone and their shares look poised for a rebound. The story said global demand for potash remains strong, prices for the crop nutrient will remain at record highs, supply continues to be tight and new capacity is still a few years away. The day after the Reuters story, Citigroup added Potash Corp to its top-picks list and said its current share price is discounting a far worse earnings scenario than fundamentals indicate. Citi also noted that the sell-off in Potash Corp and the sector appears overdone — the exact phrasing used in the Reuters analysis. Shares of Potash Corp were up 5 percent in early trade on the New York Stock Exchange on August 18, while those of rivals Mosaic, Agrium and Intrepid Potash rose 5 percent, 3.5 percent and 3.3 percent respectively.