This week or next will see a bid from China for Potash Corp. of Saskatchewan (POT), Canada’s Globe and Mail is reporting.

The newspaper’s sources say Beijing is now deciding which of the proposed bids from China’s state-owned companies it should back. Pending Chinese national holidays beginning on October 1 argue for a decision this week or next.

Among the Chinese companies interested in topping the $38.6 billion bid by Australia’s BHP Billiton (BHP) for the Canadian fertilizer company are, according to the Globe and Mail, the state-owned chemical group Sinochem, which has proposed paying as much as $60 billion, and China Blue Chemical, a division of China National Offshore Oil Corp.

A Chinese bid has become more likely in recent weeks, in my opinion, as news reports have confirmed China’s swing this year to a corn importer from previous self-sufficiency in corn, and as the price of corn has climbed to $5 a bushel on forecasts of a slightly smaller harvest in the United States. Read more

Update Thompson Creek Metals (TC)

Thompson Creek Metals (TC) announced earnings of 15 cents a share for the fourth quarter last night (February 25) after the market close. Revenue for the quarter came to $106 million. Both beat Wall Street projections for 8 cents a share in earnings and $94 million in revenue.

Those numbers represent a 42% decline in revenue from the fourth quarter of 2008 and an 86% drop from earnings per share of 56 cents in that same quarter. These numbers are Thompson Creek’s first financial report under U.S. accounting rules (required since more than 50% of the shares of the Canadian company are now owned by U.S. citizens.)  If the company were still reporting under Canadian accounting rules earnings per share for the fourth quarter would have been 17 cents.

In its guidance the company said that it continues to see signs of recovering demand for molybdenum in 2010. The company’s mines are currently operating at full capacity and it expects molybdenum production in 2010 to reach a record 29 to 32 million pounds. Cash costs are expected to remain low in a range of $6 to $7 a pound.

Now there’s just the question of price of molybdenum. Read more

Russia buys Canadian dollars–shouldn’t you?

So what took them so long?

On January 20, Russia’s central bank announced that it had started buying Canadian dollars and Canadian-dollar-denominated bonds to diversify its foreign exchange reserves.

We’re not talking about a huge allocation to Canadian-dollar-denominated assets—maybe around 2%. But Russia has the world’s third-largest foreign exchange reserves at $439 billion so even 2% comes to about $9 billion worth of Canadian currency and bonds.

The logic is pretty simple, I think. The Russia reserves have been split about 50%/50% between dollars and Euros. Neither currency seems a great bet at the moment and worries about high debt loans in the United States and the euro zone could keep the currencies weak for years.

In contrast Canada’s government accounts are in good shape and the country’s commodity-based economy is solid insurance that the country’s economy will growth with the world economy.

If you’re looking for stability in a very volatile world, Canada certainly fits the bill, the Russian central bank is saying.

What to buy if you want to follow suit? Read more

Buy Canadian National Railway (CNI)

With Warren Buffett’s purchase of Burlington Northern (BNI), there’s one less trans-continental railroad in North America. And nobody is going to build another one anytime soon. Actually make that ever.

 Canadian National Railway (CNI) generates the highest operating margins among North American railroads. Read more