In continuing good news for potash companies – namely, Canpotex members PotashCorp (NYSE: POT), Mosaic (NYSE:MOS), and Agrium (NYSE: AGU) – the commodity seems to be recovering from its disastrous 2013 year. The price of potash has held steady at around $300 per ton for three consecutive months now -- far lower than the $400 per ton price of a year ago, but a good sign that Chinese buying in February helped put a bottom in the market.

Canpotex? Chinese buying?
In case you're a newcomer to the politics of potash, the market is largely made up of two "marketing partnerships": the aforementioned Canpotex, a consortium of North American producers, and the Belarusian Potash Company (BPC), which is comprised of the Russian Uralkali and the Belarusian Belaruskali. Combined, they control about 70% of global potash sales. BPC broke up last summer, sending the potash market into a freefall, as Canpotex isn't big enough on its own to hold prices up.

While Uralkali and Belaruskali haven't reunited yet, there were signs near the end of 2013 that a reunion was in the works. China, the world's largest buyer of potash, eventually got off the sidelines and signed multiple contracts to buy at around $300 per ton, signaling smaller buyers that the time to wait for lower prices was over. India, for example, recently signed a contract with Capotex to buy one million tons at $322 per ton.

While prices haven't moved much, recent data from PotashCorp shows that North American potash producers' sales volumes in March were up 50% from March of last year, continuing a very strong first quarter. Nitrogen and phosphate prices, which were dragged down along with potash, have also enjoyed a strong recovery over the last few months.

Source: IPNI and PotashCorp

Unfortunately, North American exports were down 23%. That's likely a result of Russian producer Uralkali taking back market share. In the first half of 2013, Uralkali's market share stood at 17%, as competitors sought to take market share by lowering prices. Uralkali's share has recovered to 23%, which seems to have been taken straight from Canpotex, dropping PotashCorp, Mosaic, and Agrium's combined share from 32% to 27% of global potash sales.

What to expect
None of the three Canpotex companies have reported earnings for the quarter yet. PotashCorp will report on Thursday, while Mosaic and Agrium are scheduled to report in a couple weeks. Investors should expect the quarter to be weak compared to a year ago, but it might mark the beginning of an improvement cycle. With PotashCorp in particular offering a 4% dividend yield currently, it may be time to think about investing before the situation improves even more.