Shares of fertilizer makers including CF Industries Holdings Inc (CF.N) and Terra Nitrogen Co LP (TNH.N) rose on Tuesday, as an expected fall in corn production this summer could fuel higher demand for crop nutrients in the next planting season.
Weekly crop data, released by the U.S. Department of Agriculture (USDA) late on Monday, rated U.S. corn as 56 percent good to excellent as of Sunday, down 7 percentage points from a week earlier and well below a 61 percent average estimate in a Reuters poll.
Corn ratings have now fallen for three straight weeks, dampening expectations for a bumper crop this autumn. The fall in corn ratings pushed up corn futures as much as 2.8 percent on Tuesday to its highest level in more than seven months. <ID: nL3E8HQ479>
"I believe that the USDA will have no choice but to lower their yield and production forecast for the year on the back of what we have seen," Paradigm Capital analyst Spencer Churchill said.
CF shares rose more than 4 percent to $178.65, while Terra jumped 5 percent to $215. The S&P 1500 Fertilizers & Agric Chem Sub-Industry Index .15GSPCHFA was up 1.15 percent at 718.55.
Shares of Potash Corp (POT.TO), the world's largest fertilizer maker by capacity, were up 3.5 percent at C$43.75 on the Toronto Stock Exchange.
(Reporting by Swetha Gopinath in Bangalore; Editing by Viraj Nair)