By Leia Michele Toovey- Exclusive to Potash Investing News

Potash managed to remain the star performer through September while oil and agricultural futures were battered, but just how is potash holding up in the current climate? In September potash prices reached a record of $862.50 US per tonne, and through October prices have been relatively stable at around $865 per tonne. In August, prices were much lower, at around $802.50 per tonne.

In September, price support came by way of a strike at three of PotashCorp’s mines in Saskatchewan, record low North American inventories, and sold-out contract volumes at major potash producers. Potash sales have slowed recently as farmers in the United States and Brazil held off from buying fertilizer. Moving forward, analysts predict that the market will be resilient, but large gains are unlikely due to a drop off in China’s imports.

Scotia Capital upgraded its analysis of Potash Corp. of Saskatchewan, Inc. (NYSE: POT) from Sector Perform to Sector Outperform while maintaining their $150 price target. Wall Street Access lowered its price target on Potash Corp. of Saskatchewan, Inc. (NYSE: POT) from $240 to $90, while maintaining its Buy rating.

As the world’s biggest fertilizer company, it has just recently felt the sting of the global financial crisis, but believes due to the necessity of a consistent global food supply, they will be sheltered from the dramatic drops some metal mining companies have recently witnessed. At the same time, the company is capitalizing on the downturn in the markets by scooping up opportunities to expand. On Wednesday, they increased their stake in Israel Chemicals with a $115-million purchase from an investor looking to cash out. Potash’s shares took a hit in recent weeks on concerns over shrinking demand. However, the recent release by the company that quarterly profits climbed five-fold to $1.24 billion, more than the company earned in all of 2007, sent stocks on an upward swing. Profits climbed five-fold to $1.24 billion, or $3.93 per share, up from $243.1 million, or 75 cents, a year earlier.

Moving forward, Potash Corp sees the only potential damper on the company’s gains is if corn prices take a significant fall. The fall would have to put the price per bushel well below $4.00.  Currently, 2009 futures are around $4.30 per bushel with the expectation that they may hit $5.50. In order to keep the stock stable, Potash Corp will be proactive in curbing output to guard company value.

Anglo-Australian miner Rio Tinto, one of the world’s largest diversified miners, plans to start construction on a $3.5 billion potash mine in Argentina in the first half next year. Directors for Rio Tinto are due to meet with Argentine President Cristina Fernandez and other government officials to discuss the project on Tuesday. The current phase of the project involves the completion of feasibility studies and obtaining regional permits. It is estimated that those steps will take six months to finish, and then the company will be poised for construction. Once built, the mine will produce 2.4 million tonnes of potassium chloride per year, making the country the No. 5 global potash producer. Much of that potash will find its way into the fields of neighbor Brazil, where it will be used as a fertilizer for the agricultural power.