Potash (POT, $227.05, up $6.49) is trading higher this morning after saying they “have a lot of pricing power” and “we’re nowhere near peak pricing” according their CEO, Bill Doyle. He also added the company was poised for significant growth over the next five years saying soaring grain prices will give farmers the affordability to pay more for fertilizer.

Monsanto (MON, $137.61, up $1.27) is also setting new highs and both companies will benefit from higher corn prices and their strong market share. The fact that these two stocks are trading higher in a lousy market today indicates that demand is still strong. However, I would continue to set trailing stops for any stock or options on Potash because of the unbelievable volatility. The long-term trend is still intact but I’m a little worried it could be too much too fast.

I gave an update on 6/5 on the June 220 calls (PJNFD, $11.50, up $4.00) which were trading at $7.00 and have hit a high of $13.20 today. The July 240 calls (PJNGH, $10.40, up $2.90) were going for $6.17 and have traded up to $10.90. This is why I mentioned the trailing stops because the June calls have nearly doubled and I would hate to see the market take back these gains.

Rick Rouse