TORONTO (Reuters) – Shares of fertilizer maker PotashCorp and its smaller North American rivals are rising, as Russia’s worst drought in a century pushes wheat prices higher.
Reduced grain stocks and higher prices are expected to increase farmers’ demand for fertilizer to increase yields in the next seeding campaign.
When the U.S. Department of Agriculture on Aug. 12 cut its estimate of world wheat production by 15.3 million tonnes, shares of PotashCorp. on the Toronto Stock Exchange rose three percent. The share prices of Agrium, Mosaic and CF Industries rose similar amounts after the USDA announcement.
Share prices of the large agricultural company have been rising through the summer.
On July 2, Potash Corp. shares closed at $90.91. By Aug. 12, they had risen $25.64 to close at $116.55, an increase of 28 percent.
Grain company shares have also risen.
Since July 2, Viterra shares have climbed about 14 percent and Archer Daniels Midland climbed 20 percent.
