Filed Under:
Tickers in this Article: SYT, MON, AGU, TS, LRY, MGA, HRH, USO, UUP
Big moves up and down in share prices need to be supported by increasing volume or the move will rarely be sustainable. One way to determine strong trends and get on board long upward or downward moves is to look at stocks that are trading a large amount of volume early on in the day, when compared with their average volume. This will help us set the best moves apart from the rest. (For background reading, see Volume Rate Of Change.)

Here are five stocks that were trading on very large volume by noon today. Let's take a closer look at one that has seen a large share price change as well.

Company
Shares Traded*
% of Average Volume
(3 month)

TS Tenaris S.A.
(NYSE:TS)
4,418,710
144%
Liberty Property Trust
(NYSE:LRY)
2,347,335
188%
Magna Int.
(NYSE:MGA)
2,013,013
271%
Hilb Rogal & Hamilton
(NYSE:HRH)
1,490,235
302%
Syngenta AG
(NYSE:SYT)
1,070,723
142%
* Data as of 9:58 am EST October 3, 2008

Global Downturn Seeps into Agriculture
The concept in play is that a slowdown in the global economy as a result of the credit crisis will hurt demand for commodities. The reality of the concept was displayed by the huge pullback in shares of several Agribusiness companies this week including Agrium (NYSE:AGU), Monsanto (NYSE:MON) and Syngenta. From September 26 through October 2, Agrium, Monsanto and Syngenta fell 34.98%, 22.49% and 19.82% respectively. Uncertainty over how tight credit requirements will affects farmers' ability to cover operations expenses and reforecast of near term future sales results are the likely causes of the volatility in Agribusiness and in Syngenta. (For more on the credit crisis, check out our Subprime Mortgage Meltdown Feature.)

Syngenta's First Half
Syngenta's two main products are seeds and crop protection. For the first half of 2008 Syngenta's revenue increased 20% over the same period a year ago to $7.3 billion. Crop protection led sales with a 21% increase to $5.55 billion followed by a 15% increase in seeds sales up to $1.74 billion. While Syngenta's numbers are impressive, once Monsanto announced earlier in the week its expectation for lower than forecasted phosphate sales along with growing credit concerns, shares for the group tumbled.

Correlation
Its worth mentioning that, while a weaker U.S. dollar in the first half of the year only contributed $169 million to Syngenta's EBITDA, a noticeable move downward in its stock price can be observed against a recent upswing in the PowerShares DB US Dollar Index Bullish ETF (AMEX:UUP). Syngenta's stock may move in the opposite direction of the U.S. dollar, but it also appears to move along with the high and lows of oil prices. As the US Oil Fund ETF (AMEX:USO) fell from its highs in July Syngenta stock price followed a similar trajectory downward.

Future of Agriculture
According to a recent study by the U.S.-based Rights and Resources Initiative, the global need for land to grow food crops, biofuels and wood products will outstrip available land available by 2030. Before the land becomes an issue Syngenta is forecasting the world's population to increase by two billion people in next 20 years. One or both issues suggest that the future demand for Syngenta's products will be intact as farmers and Agribusiness will push for more efficient and sustainable farm crops. (For more on demand and how it can affect business, read Economics Basics Tutorial.)

Final Thoughts
Today's decision by Congress is likely to have a positive effect on the short-term outlook of the U.S. economy causing the volatility in Syngenta to dissipate slowing its downward momentum. Investors should focus on the long-term demographics of population growth and land availability, which could make Syngenta a long-term winner.

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