Potash Corp./Saskatchewan (USA) (POT), Mosaic Co (MOS), Monsanto Company (MON): Three Crucial Developments That Can Rock Agriculture Investments in September

What’s happening in the other side of the world?
For seed companies, the focus shifts to the southern hemisphere as farmers in Brazil and Argentina kick off their main crop planting season this month. Soybean acreage is expected to increase in Brazil on the back of stronger crop prices and hopes of higher farm income on a weaker Brazilian currency.

Investors should track weather updates from Latin America. If everything goes smoothly, it should be great news for Monsanto Company (NYSE:MON), especially since the company has just launched its Intacta RR2 PRO soybeans in Brazil. Even at launch, Monsanto Company (NYSE:MON) is targeting three million acres for the trait, which is also its first-ever South American exclusive biotech product. Meanwhile, Monsanto Company (NYSE:MON)’s Genuity corn traits are making a huge headway in Argentina. That’s one reason why Monsanto Company (NYSE:MON) is looking at record corn volumes for the full year.

Aside from Monsanto Company (NYSE:MON), fertilizer companies, especially members of Canpotex, should also benefit from a good Latin American planting season. The market made up 29% of Canpotex’s total sales last year. With contracts from Asian markets drying up, I won’t be surprised if Latin America contributes a greater share to Canpotex sales this year. Phoschem, the marketing association through which Potash Corp./Saskatchewan (USA) (NYSE:POT) and Mosaic Co (NYSE:MOS) sell phosphates, could be in for some good news as well since Latin America made up 40% of its total sales last year.

Another beneficiary could be farm-equipment king Deere & Company (NYSE:DE). Deere & Company (NYSE:DE)’s share in the Brazilian tractor market increased 6 percentage  points between 2011 and 2012. Although Deere doesn’t provide a detailed geographic breakup of its revenue, Latin America is among its key target growth markets. Deere & Company (NYSE:DE) expects full-year Latin American industry sales to grow at 20% clip. If things go as per plans, Deere should end this quarter on a positive note. Of course, higher farm income in the U.S. is a double boon for Deere since North America continues to remain its primary market.

Foolish takeaway
The recent swings in the agricultural sector can panic any investor. Yet, investors may opt to get panicked, or keep abreast and stay calm. The second option sounds better any day. If you read the headlines, you’ll know better where your investments are headed to.

The article 3 Crucial Developments That Can Rock Agriculture Investments in September originally appeared on Fool.com and is written by Neha Chamaria.

Fool contributor Neha Chamaria has no position in any stocks mentioned. The Motley Fool owns shares of CF Industries Holdings.

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