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Quarter-End Insights

Our Outlook for Basic Materials Stocks

The near term will surely be bumpy, but valuations look prettier today than they have in years.

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  • Excessive heat in the Midwest has damaged yield potential for corn. As a result, production will be lower than expected and prices are likely to remain elevated.
  • The tremors coming out of Europe and the slowing U.S. economy have certainly played their part in pushing down coal valuations, but the real battle will be fought in China.
  • The trends in steel fundamentals this year are eerily similar to one year ago, but with one key difference--they're much better this time around.

Elizabeth Collins has a position in the following securities mentioned above: WY. Find out about Morningstar’s editorial policies.