COMPASS MINERALS TRENDING DOWNWARD

Compass Minerals had a great quarter and is still a great company to invest in long term. The increased price with respect to their sulfer of potash was great but deliveries were down significantly as farmers are waiting to apply fertilizer as they are unsure of their economic environment. It is also possible they are finding it difficult to get credit to purchase the fertilizer. One very interesting aspect to this company and others in the realm of potash is that they are not caving in with respect to price. The way the fertilizer business is built, is to not built keep much inventory with respect to fertilizer and seeds. One reason is that fertilizer and seeds are usually only guaranteed for one year. As an example Monsanto will only honor the yield on their seed as insurance for one year to make sure people do not stock up on their product. This causes retail to only have a small amount of capacity and order as much as is needed. Also, most are ordered in advance to lock in price so they don't have to store much as it is delivered directly to the farm. Since this is the case there is generally small areas to store fertilizer that would be purchased without signing an order. Currently fertilizer is not selling but potash is still increasing in price. The idea is that if it is not sold in the US, India and China will pick up the slack. I would watch this as CMP, SQM, POT, MOS and IPI all look good. Especially look at IPI, as there has been some interest in this name and it is up on days that even the rest of the industry is down.