Mosaic and the other fertilizer stocks got whacked.

Mosaic dropped $27.86, or 41 percent, to $39.65 at 4:15 p.m. on the New York Stock Exchange. The decline was the biggest since the shares began trading in October 2004. The Plymouth, Minnesota-based company's shares have fallen 56 percent this year.

Excluding mark-to-market derivative losses, Mosaic's per- share profit was $2.83 in the three months ended Aug. 31, the company said yesterday in a statement released after the close of regular trading. Nine analysts surveyed by Bloomberg expected profit excluding one-time items of $2.94 a share, on average.

Mosaic also said it will reduce planned phosphate production by 500,000 to 1 million tons in ``the next several months'' in response to increasing phosphate inventories. As a result, phosphate sales volume is expected to be 8 million to 9 million tons in fiscal 2009, which ends on March 31, Mosaic said.

``With phosphate prices falling, nitrogen prices peaking and potash prices rising less than expected, there is considerable uncertainty surrounding the near-term earnings outlook as underscored by Mosaic's earnings miss and downward guidance,'' Merrill Lynch & Co. analyst Don Carson said today in a note to clients.

Mosaic, majority owned by Cargill Inc., has plunged 76 percent from a record $163.25 a share on June 18 amid widening U.S. economic turmoil and investor concern that weakening crop prices will reduce fertilizer demand.

Fertilizer Companies Plunge

Potash Corp. of Saskatchewan, [in which I hold a small position, having sold most of my shares this summer] the world's largest fertilizer producer by market value, fell C$35.50, or 26 percent, to C$101 in Toronto Stock Exchange trading.

Calgary-based Agrium Inc., the largest agricultural retailer in the U.S., declined C$13.47, or 23 percent, to C$45.01 in Toronto. Bunge Ltd., the world's biggest oilseed producer, dropped $12.84, or 20 percent, to $50.16 in New York.

Mosaic's net income rose to $1.18 billion, or $2.65 a share, in the fiscal first quarter, from $305.5 million, or 69 cents, a year earlier, the company said in the statement.

Lessons learned:

1. Commodities are highly cyclical.  They have been since the dawn of time.  This truism did not change at the beginning of the 21st century
2. When any asset has moved an extraordinary amount in a short period of time, the final move is usually the frothiest.  Be highly distrustful of this move.  It must always be sold.
3. It's never different this time.