"Have you seen recently the behaviour of fertilizer companies? MOS, POT, AGU, SQM are trading below their 200 MA and, in some cases 50MA has violated 200MA to the south.

"Last Potash results were good and the outlook was promising according to the Conference Call they held. But charts are telling something different. China tightening? Lower prices ahead? I would like, if possible, to know your thoughts."

Eoin Treacy's view Thank you for this informative email. Nitrogen based /Ammonia fertilizer producers have been one of the main beneficiaries of lower natural gas prices and as a result have been relative strength sector leaders over the last year. However, this has not insulated them from the underperformance of the agriculture commodities which I believe is the most important factor with relation to the recent poor performance of these shares. This article by Jeff Wilson for Bloomberg may be of interest. Here is a section:

Corn rose the most in four weeks on speculation that China, the world's second-biggest consumer of the grain, may need more supplies from the U.S. to reduce record domestic prices.

China, the world's biggest pork producer, may have issued more import permits to meet a feed-grain shortage, Shanghai JC Intelligence Co. said today. The country has ordered almost 1 million metric tons of U.S. corn and will probably buy more, Alvaro Cordero, the U.S. Grains Council's manager of international operations-marketing, said on May 24. Total annual purchases would be the biggest in 14 years.

The last time China was a net importer of corn was in 1996, which was a notable year for the commodity because prices more than doubled. There is no guarantee that something similar will happen on this occasion because other factors, particulrlary the US harvest will come into play. Corn prices remain a broad range and have posted a short-term progression of higher reaction lows since April. A sustained move below 350¢ would be required to question scope for further higher to lateral ranging while a sustained move above 420¢ would be needed to complete the developing base.

Mosaic, Potash Corp of Saskatchewan, Agrium, SQM and Yara International all encountered resistance in January. Agrium was briefly able to post an additional new recovery high but has subsequently also lost uptrend consistency. They all fell below their 200-day moving averages in April and have extended their declines, a number in extremely tight downtrends (MOS, POT, AGU, SQM, YAR dailies). They are now looking oversold and have steadied somewhat over the last few days and are testing their short-term downtrends. Significant potential exists for at least a relief rally but they will need to sustain moves back above their 200-day moving averages if the medium-term bullish outlook is to be reasserted and are probably in need of higher grain, bean and fibre prices to act as a catalyst to attract significant new bullish interest.