* Cut in world wheat production forecast prompts rally
* Potash Corp, Agrium top net gainers in Toronto (In U.S. dollars unless noted)
TORONTO, Aug 12 (Reuters) - Shares of the world’s largest fertilizer maker, Potash Corp POT.TO, jumped on Thursday along with those of its rivals after a U.S. government report cut world wheat harvest prospects more than expected.[ID:nN129838]
While world wheat stocks will remain well above the crisis levels of 2007-08, the U.S. Agriculture Department cut its world wheat production forecast by 2.3 percent to 645.7 million tonnes in its August report, its first estimate since Russia recently banned shipments following a devastating drought.
The report sent benchmark U.S. wheat prices up more than 4 percent to $7.25 a bushel on the Chicago Board of Trade, while the prices of corn and soybeans also rose sharply on the Chicago Board of Trade. [nN12103461]
The rise in grain prices pushed shares of Potash Corp up nearly 3 percent to C$116.31 making it the top net gainer in morning trade on the Toronto Stock Exchange as investors bet the stronger grain prices would encourage farmers around the globe to increase fertilizer application.
Fertilizer maker Agrium Inc AGU.TO — which is also North America’s biggest farming products retailer — was the second biggest net gainer in Toronto. Its shares were up C$2.01 at C$69.25.
On the New York Stock Exchange, shares of fertilizer producers Mosaic Co (MOS.N) and CF Industries (CF.N) were up 3.6 percent and 2.6 percent, respectively. ($1=$1.05 Canadian) (Reporting by Euan Rocha; editing by Peter Galloway)