Taking my technical hat off, I believe in the years ahead that we could see a perfect storm in food prices brought on by a continually expanding world population (and a rising middle class that wants to move from rice and tofu to chicken, beef and fish) versus a slowly increasing food supply. Food, I believe, will be rationed by higher prices and fertilizer demand will rise and those companies will benefit.
Investors can do their homework now on these three names.
The first chart is from Agrium (AGU) and gives us the long term picture -- big run up and down in 2007 and 2008 with the commodity run up and decline. From the 2008 low we have a nice "stair step" advance the next six years. Prices have been pulling back/correcting so far this year. There is a year and a half period of sideways price action from mid-2013 through much of 2014 and this area should act as support as AGU pulls back. Rebasing around $90 would be a good place to look to position AGU from the long side. Also note the relatively flat on balance volume line which tells us that there was very little liquidation on the downward corrections over the years. AGU stayed in portfolios.
Chart two is Mosaic (MOS). MOS has been stuck in a roughly sideways pattern since late 2008. The interesting thing is the slightly rising on balance volume line at the bottom of the chart. Investors/traders have been slowly accumulating MOS. With a neutral trend investors may want to wait until prices have broken out over the highs of 2015.
Our third chart is Syngenta (SYT). SYT shows that same "stair step" advance from its late 2008 low. Prices corrected lower for much of 2013 and 2014 before starting a sharp rally to new highs. The recent pullback should be viewed as a buying opportunity. Shares of Syngenta plummeted today after Monsanto (MON) dropped its $46 billion bid for the company. Support is around $65 and with the recent price action a "go slow" approach would be preferred.