Roubini has noted that stimulus investment has led to increased commodity prices. That coupled with a poor harvest of corn, wheat, soybeans, cotton, and a few others is leading to higher prices for the core agricultural products. There is a macrotrend that is pointing to significant increases in commodity related assets.
Thus there is basis for the report by the executives of Mosaic when they tell us operating earnings have tripled YOY in Q2 2011, production capacity of potash is running near 100%, the company retired a $455m bond three years early, demand has increased across all markets, demand is set to break record levels, set in 2007, in all market segments.
The author sold Mar 11 $85 puts at $8.50 and Mar 11 $80 puts at $5.50.
The author also initiated a long position in MOS at $79.82.