So what’s happening everywhere else in the world?

Eyeballs are glued to the euro/Spanish/French/Greek debt crisis. Investors are shifting every data dump from the Federal Reserve, the Bureau of Labor Statistics, and corporate earnings in the hope of figuring out if the U.S. economy is slowing—and how quickly. China’s momentum mavens are busy calculating how close the Chinese economy might be to a bottom and the odds that each piece of bad news might be the one to lead to the next round of stimulus from the People’s Bank of China.

But what about the rest of the world? What stock markets and what stocks should investors be watching—and maybe putting some money into–that aren’t Europe, or the United States, or China?

Investing somewhere besides the markets in the headlines assumes that you believe that none of the current crop of potential bad news rises to the level of catastrophe. If one of the world’s big economies and financial markets goes down hard, the likelihood is that it will take down everything. If China really hits a hard landing—with 5% growth and increased social unrest, for instance—it’s unlikely that you’ll be able to find safety—let alone profits—in one of the world’s other financial markets. One lesson from the post-Lehman crisis is that if it’s a big enough crisis, everything heads down at once.

If on the other hand, these potential crises don’t either turn into great big crises or really into a crisis at all, then the “everywhere else” markets could be either 1) profitable ways to leverage a positive result from any of the world’s headline grabbers, or 2) profitable ways to diversify a portfolio. Let me give the names of six stocks that exemplify those two groups. Read more

When I bought Potash of Saskatchewan (POT) for Jubak’s Picks on April 4 http://jubakpicks.com/2012/04/04/buy-potash-of-saskatchewan-pot-in-my-jubaks-picks-portfolio/ , I said I’d buy it now even though I didn’t like most cyclical stocks in the current market environment. My preference for Potash of Saskatchewan isn’t just over other cyclical stocks, however. I also prefer the stock to that of other fertilizer producers. The fundamentals for potash producers such as Potash of Saskatchewan look substantially better than those for producers of nitrogen and phosphate fertilizers.

Which is why I’m going to take the opportunity of an up market today to trim my fertilizer exposure today by selling shares of Yara International (YARIY) out of my Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/ .

All parts of the fertilizer industry are adding capacity, which has a tendency to depress prices when demand isn’t growing like corn in Iowa in July. But the potash market is effectively controlled by the two global cartels, Canpotex of Canada and Belarussian Potash, that together account for 70% of global supply. In most years the two cartels work to match production with demand so that the potash industry avoids huge price swings and long-term gluts.

The nitrogen and phosphate markets don’t have anything like that discipline. Phosphate, which is mined as potash is, is looking at big increases in capacity from mines in the Middle East: Saudi Arabia, Iraq, Jordan, and Israel. Big additions to supply scheduled to come on line in 2012 and 2013 as countries in the region, especially Saudi Arabia, invest to build up their domestic exporting industries. In nitrogen fertilizers, where the main constraining factor is the price of natural gas, the huge global glut of gas that has led to 11 new plants, adding up to 10 million metric tons of new capacity, schedule to go into production by mid-2013. The nitrogen market is likely to be seriously oversupplied by 2013/2014, Credit Suisse concluded in an April 3 report.

Under these circumstances I’d much prefer to own potash producers such as Agrium (AGU), Mosaic (MOS), and Potash than companies over weighted to phosphate and nitrogen fertilizers.

That’s apparently a preference shared byYara International (YARIY in New York and YAR.NO in Oslo), the world’s biggest producer of nitrate (a nitrogen fertilizer) fertilizers. Read more

In my April 2 post http://jubakpicks.com/2012/04/03/cyclical-stocks-had-a-great-first-quarter-but-a-bad-march-are-they-trying-to-tell-us-something/ on the great first quarter turned in by cyclical stocks—and the lousy March–I said that in general I don’t see much to tempt me into putting money into cyclical stocks before first quarter earnings season (which starts on April 10) and before we get some resolution of big macroeconomic questions on growth from Europe and China.

In general.

But I also said that I’d make an exception for fertilizer producer Potash of Saskatchewan (POT) and I promised to explain why.

Part of the reason is the March 30 report on corn plantings from the U.S. Department of Agriculture that projected a 4% increase in acreage planted this year from the 2011 level. A second report on corn stock inventory showed inventory on March 1, 2012 of just 6.01 billion bushels, down 8% from the March 1, 2011 inventory levels. The corn stocks level of 6.01 billion bushels was below the consensus of 6.15 billion bushels.

The two reports add up to more planting—which means more seed and fertilizer and pesticides purchased by farmers—and to higher prices as stocks fall before the actual harvest.

But part of the reason is specific to Potash. Read more

Farm stocks drop on what is, in my opinion, an overly optimistic forecast from the USDA–buying opportunity ahead

The May 11 crop forecast from the U.S. Department of Agriculture knocked the chaff out of the grain market. Corn fell in price by the most allowed on the Chicago Board of Trade and wheat and soybean prices followed downward.

The cause of the plunge? The USDA said that grain inventories at the end of the harvest year will be larger than expected. Corn stockpiles will climb to 900 million bushels, for example. That’s a significant 23% higher than the 730 million bushels this year. Of course, this year’s 730 million bushels is the lowest stockpile in 15 years.

You can understand why that kind of switch would have sent some commodities traders scurrying to take profits. The price of corn has doubled in the last year as traders bet that the slim margin of error represented by that 15-year low in stockpiles would generate enough fear of shortages to keep prices rising.

What’s less easy to understand is how the USDA got to its new projections. I think they include some wildly optimistic assumptions. And if I’m right, the current sell off in farm-related stocks such as Deere (DE), down 4.4% from the May 10 close to the close on May 12 (that’s two days in case you’re counting), and Potash of Saskatchewan (POT), down 5.7% in those two days, could turn what was already a pretty good buying opportunity into a great buying opportunity in the sector.

Here’s what the USDA said that leaves me scratching my head. Read more

Looking for bargains? Look down on the farm

If you’re thinking of bargain hunting as global stock markets reel under the impact of what is close to open war by the Gaddafi regime on the Libyan people—but would like a little near-term positive catalyst with those lower prices, might I suggest the farm sector. Stocks like Potash of Saskatchewan (POT), Deere (DE) and Yara International (YARIY) were all down hard on Tuesday, February 22, falling 5.5%, 4.2%, and 4.1%, respectively. Most of them dropped again today February 23.

And on Thursday February 24 the U.S. Department of Agriculture is set to announce another depressing crop report. Of course, bad crop reports are good for farm prices—and for the stocks of those companies that sell equipment and fertilizers to farmers.

Ahead of the report, analysts surveyed by Bloomberg are looking for a 3.5% increase in the U.S. Department of Agriculture’s forecast of U.S. corn planting. It will also forecast global a decline in global corn stockpiles to just 15% of global use, the analyst consensus says. That will bring corn inventories to the lowest level in 37 years. Read more