Potash prices face "significant downside risk", Credit Suisse said, cautioning over the prospect of further growth in inventories - after a record quarter for North American production of the nutrient.
The bank said that while potash consumption "has been healthy" so far this year, it appeared to have "little room for upside surprise" in terms of further growth.
Indeed, weakness in crop prices, in undermining farm profitability, presents a headwind to demand.
By contrast, on the production side, there was the prospect of "new supply availability" building in the second half of this year and into 2018.
Extra capacity coming online include the $4.1bn Bethune mine in Canada, owned by German-based K+S. and two projects developed by EuroChem, owned by Russian tycoon Andrei Melnichenko.
With inventories already "fully replenished", the bank flagged "significant downside risk" for potash prices, "particularly now", at a time when many investors have "elevated expectations" for values.
"We continue to see price risks for the second half of 2017 and for 2018, as demand wanes on weak farmer economics foreign exchange volatility and rebounding inventories."
The comments follow data from PotashCorp, the Canadian potash giant merging with rival Agrium, showing that potash inventories held by North American producers had hit 3.40m tonnes as of June, a one-year high, and up 29% so far for 2017.
North American potash production hit 1.95m tonnes in June, taking the total for the April-to-June period to 5.69m tonnes – the most for any quarter on data going back to 1999.
Output was up 25% on that in the April-to-June period of 2016.
Demand, meanwhile, for the quarter was up a more modest 7.2% year on year, with a surge in exports offset in part by weaker sales in North America itself.
Prices, however, have held despite the rising supplies, standing at $255 a tonne in the US Midwest, a gain of 2.0% week on week and 4.1% over the past month, according to Canada-based broker Raymond James.
It attributed the resilience in prices to "any price relief from the new Saskatchewan K+S plant will not be realised in time to affect fall offers".
Retailers had "returned to the market primarily for small purchases to avoid carryover".
However, the broker also flagged high potash inventories "throughout South East Asia", stocks which had "kept spot prices flat" at a little under $250 a tonne, where they have remained for the last year.
By Mike Verdin