Signs look positive for the agricultural and fertilizer industries in 2012, and U.S. companies would likely benefit the most, investor Dennis Gartman said on “Fast Money.”
“It may well be another good year for American agricultural, and if you’re an American farmer you’re looking at prices and you’re thinking, ‘You know what? I’ve got corn prices at levels I really didn’t think I’d see again. I’m planting,’” he said Thursday. “It’s going to be a good demand for fertilizer, good demand for nitrogen specifically.”
The Gartman Letter publisher said it was important to watch Latin American production of corn and soybeans, particularly in Argentina and Brazil. Harsh weather could push U.S. ag prices higher.
Monsanto shares jumped 5.5 percent to close at $76.68, while Mosaic rose almost 2 percent to $53.30.
Trader Tim Seymour liked Monsanto and Dow.
“World fertilizer demand is going to be record 2012,” he said. “We’re back to demand from before pre-crisis.”
Investment pro Joe Terranova was bullish on CF Industries.
“It’s catching a bit. It’s highly volatile,” he said. “Last couple of days, finally elevated above all its moving averages — that’s your play.”
Terranova also liked waste recycler Darling International.
OptionMonster.com cofounder Jon Najarian added that cheaper natural gas would benefit ag plays, as well as a company such as Alcoa.
“Monsanto had a great day,” said Scott Nations on the options desk. “People want to get on board, but they want to define their risk. So that’s why we saw call buying and call-spread buying.”
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Trader disclosure: On Jan. 5, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova owns APC; Terranova owns OXY; Terranova owns XOM; Terranova owns VRTS; Terranova owns IBM; Terranova owns CSCO; Terranova owns AXP; Terranova owns SBUX; Terranova owns CSX; Terranova owns SWN; Terranova owns AXP; Najarian is long call spreads AAPL; Najarian is long call spreads BAC; Najarian is long call spreads C; Najarian is long call spreads JPM; Najarian is long call spreads ORCL; Najarian is long call spreads DNDN; Najarian is long call spreads PNC; Najarian is long call spreads FDO; Najarian is long call spreads DLTR; Najarian is long call spreads DG
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