December Corn Future Up, Could Trade Even Higher, Goldman Sachs Reports

According to a report by Goldman Sachs, the October WASDE report has very positive implications for the fertilizer group due to a much tighter corn balance than previously anticipated. “The WASDE revised down forecasted corn yields to 155.8 bushels per acre from 162.5 bushels per acre prior, which, combined with healthy demand levels, suggests the stocks-to-use ratio could be just shy of 7%, an exceptionally tight balance,” Goldman Sachs writes. “The December corn future is up over $0.50, trading at $5.56, and may trade even higher as the tighter balance is fully priced in.” CF Industries Holdings, Inc.

, which currently trades for $113.90, remains Goldman Sachs' top pick. “CF is most leveraged to the robust nitrogen and potassium pricing backdrop and also has the most leverage to the current benign natural gas cost backdrop, with the forward strip below $4.25 per mmBTU.”