US markets mixed, May 16-20

Investor sentiment was mixed after news that benchmark interest rates could rise in June. Positive economic data appeared to support a hike — with the U.S. Consumer Price Index up 0.4% for April in a three-year high, and home sales also up US$5.5 million, versus US$5.4 million in March. The Dow Jones Industrial Average slid 0.2% to 17,500.94, while the S&P 500 Index rose 0.3% to 2,052.32. The Philadelphia Gold & Silver Index dropped 1.8% to 85.44, and spot gold fell 1.6% to US$1,251.90 per oz. gold.

Improving fundamentals for crop nutrients helped lift the shares of fertilizer producers Agrium, Mosaic and Potash Corp. of Saskatchewan. In a presentation at the BMO Capital Markets Farm to Market conference, PotashCorp said potash mine closures between now and 2020 would take 7 million tonnes of capacity out of the market. It also noted that increases in global population and improving diets would support longer-term demand for potash, and forecast global supply and demand this year would be relatively balanced and similar to historic levels. Despite contract deferrals in China this year, “strong consumption trends and new contracts are expected to support shipments,” it said, while in India, “modest demand growth with an improved monsoon” should also help potash. For the rest of Asia, “supportive crop economics” could support demand, while in Latin America, “agronomic need and increasing crop acreage” would keep demand high. In North America, more planted acres and nutrient requirements are anticipated to support higher shipments. Shares of PotashCorp were up US84¢ to US$16.53, while shares of Agrium and Mosaic rose US$1.38 to US$87.87 and US$1.10 to US$25.94.

Dominion Diamond’s shares fell 4.5% to US$10.17, despite approval for the Jay project’s environmental assessment from the Northwest Territories’ Minister of Lands. Jay is the most significant undeveloped deposit at the Ekati diamond mine, and could extend its mine life 11 years beyond its closure date. The company expects to publish a feasibility study on the Jay project later this month, and says it will file water licence and land-use permit applications shortly for environmental approval.