By Leia Michele Toovey- Exclusive to Potash Investing News

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According to Goldman Sachs, over the next few years global potash demand will grow around 4 percent per annum with emerging market food requirements playing the key driving factor in fertilizer demand.  The investment powerhouse also commented that new capacity will not flood the supply side of the market, at least not in the near term, as all projects currently being developed still face a great deal of development work until they can come online.  In the near-term the firm believes that potash pricing is “constructive.”

The investment firm also added their two cents about the world’s largest potash producer- Potash Corporation of Saskatchewan (NYSE: POT). They extended their neutral rating on the fertilizer producer, and added a $131.00 price target on the company’s stock.  Potash Shares have been slow to catch a ride on the economic rebound. So far, 2010 has not been terrific for the shares of POT as they are down about 10 percent compared to a drop of less than 5 percent for the broader market. Recently, the shares had been bouncing off of their yearly lows below the $94 level from early June. The shares had managed to trade above the $100 mark for much of last week.  However, many analysts are hesitant about the potash giant’s near term stock price.

On Thursday, the market was a buzz with a significant bearish call by one investor.  The trader placed a significant call by purchasing 7,500 puts at the September $90 strike for a premium of $4.30 each, and sold the same number of puts at the lower September $75 strike for $1.12 in premium apiece. This trader is positioned to make money if POT’s shares fall another 9.6% to trade beneath the effective break-even price of $86.82 by expiration day in September.

In the meantime, the markets will look towards July 29^th when Potash Corp will release their second quarter earnings.  Due to the fact that Potash Corp holds such a significant portion of the sector, the company’s earnings are a significant indication of the overall health of the Potash sector.

Company News

South Boulder Mines (ASX:STB) has commenced diamond drilling on its 100 percent owned Colluli Potash Project in Eritrea.  The 4 to 5 hole program is the first drilling program undertaken on the project in 42 years and is designed to confirm historic shallow potash drilling intercepts and provide data to complete an initial JORC resource calculation. The drill program should be completed in the next 8 weeks.  The drill program is meant to confirm the company’s expectation that Colluli is a world class deposit.  The key features of the project are its close proximity to the coast, which allows for transportation, and the fact the mineralization is shallow.  The shallow deposit may be extractable with low cost solution mining.  The Houston Formation is only 15kms from the Colluli, and drilling at the Houston Formation has intersected potash bearing horizons up to 45m thick.

Uralkali’s finance director Ilya Kosykh announced that the Russia Potash Miners new owners will most likely use Eurobond to finance investments. The company will most likely not need financial support until next year, and in the meantime Uralkali plans to nail down the exact amount of funding it will seek.