The invasion of Ukraine has wreaked havoc on global markets. The impacts on the oil market are most familiar to consumers. We are all aware that Russia is a significant oil exporter. The invasion of Ukraine has had a variety of effects on supply dynamics. That deserves its debate, but the final effect is that customers throughout the country are now spending $4.31 at the pump.
However, like wheat, many other commodity markets rely on Russia and Ukraine. Grain ports in the Black Sea were blocked as a result of Russia's invasion of Ukraine, leading in a spike in wheat prices. Over a fourth of worldwide wheat exports come from these two nations.
As a result, on March 7, prices reached a 14-year high of $12. Australia is filling up part of the supply slack, resulting in price stability. Nonetheless, prices are expected to remain volatile shortly. As a result, investors will closely scrutinize wheat stocks, and higher pricing might lead to higher stock prices.
Due to the ferocity of the conflict and the resulting supply chain issues, worldwide wheat prices have skyrocketed. According to the Chicago Board of Trade, benchmark wheat futures hit a new high of $13.50 a bushel on March 5.
According to the Food and Agriculture Organization, Russia and Ukraine produce 14 percent of global wheat, and reduced wheat production in Russia, Canada, and the United States was already putting the wheat market under pressure before the conflict and subsequent trade embargoes.
On March 4, the U.N.'s Food and Agriculture Organization issued a report stating that world wheat prices increased by 2.1 percent, mostly due to global supply difficulties in the Black Sea area, limiting shipments from Ukraine and Russia. In February, the FAO Cereal Price Index averaged 144.8 points, 4.2 points from January and 18.7 points from the prior year. Compared to the previous month, prices of all major grains and cereals increased in February.
Apart from Russia and Ukraine, the European Union, the United States, Australia, and Argentina are the primary wheat producing areas, and these nations are well-positioned to profit from the Black Sea region's restricted supply. However, because of the drought in the United States, Argentina, and Brazil, high wheat prices may continue to grow even if supply chain issues are overcome.
According to figures released on February 10, Canadian wheat prices increased by $22 per tonne from January to $405 per tonne in February. Similarly, due to high foreign demand, particularly from China and Indonesia, Australian wheat bids were $347 per tonne.
Wheat is in high demand owing to supply concerns prompted by geopolitical tensions, benefiting companies such as Adecoagro S.A. (NYSE: AGRO), Archer-Daniels-Midland Company (NYSE: ADM), and Bunge Limited (NYSE: BG).
Bayer Aktiengesellschaft (OTC:BAYRY)
Bayer Aktiengesellschaft (OTC: BAYRY) is a global life science and pharmaceutical company based in Germany. Its products include insecticides, seeds, and plant biotechnology solutions.
In June 2018, Bayer Aktiengesellschaft (OTC: BAYRY) paid $66 billion for Monsanto, a U.S. seed firm, making it one of the largest German acquisitions ever. Monsanto is a subsidiary of Bayer Aktiengesellschaft (OTC: BAYRY) that produces wheat, herbicides, and genetically modified crops.
Bayer Aktiengesellschaft (OTC: BAYRY) reported a net profit of €1.16 billion for the fourth quarter of 2021, up from €308 million the year before and beating the market estimate of €731 million. Earnings and sales forecasts for 2022 have also increased. The agricultural crop science branch of Bayer Aktiengesellschaft (OTC: BAYRY) raised its revenues by 11% year over year to €4.49 billion in Q4.
Bayer Aktiengesellschaft (OTC: BAYRY) received a 'Buy' rating and a €64 price objective from Jefferies analyst Charlie Bentley on March 14. According to the expert, agriculture fundamentals are at their best in over a decade, even before the possible effect of interruptions caused by the Ukraine conflict. Bayer Aktiengesellschaft (OTC:BAYRY) is valued at a "undemanding" level, according to him.
Frederick Disanto's Ancora Advisors held 710 shares of Bayer Aktiengesellschaft (OTC: BAYRY), worth $9,000 in 2021.
Bayer Aktiengesellschaft (OTC:BAYRY) is a prominent wheat provider despite the market crisis, with Adecoagro S.A. (NYSE:AGRO), Archer-Daniels-Midland Company (NYSE:ADM), and Bunge Limited (NYSE:BG).
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY)
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY) is based in Buenos Aires, Argentina, and was founded in 1936. Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY), also known as Cresud SA, sells wheat, maize, soybeans, cotton, sunflower, and sugarcane to consumers in Brazil and other Latin American nations.
Cresud SA reported ARS30.51 in 1H GAAP EPS in its Q4 results announcement on February 14.
Revenue for the period was ARS25.04 billion, increasing 39.3% from the previous year. The stock has risen 29.33% in the past month as commodity prices have risen due to the Ukraine conflict.
According to fourth-quarter database, four hedge funds reported having interests in Cresud SA worth $10.5 million as of December 31, compared to 6 funds holding stakes in Cresud SA worth $11 million the previous quarter. With 1.80 million shares worth $8.5 million, Ari Zweiman's 683 Capital Partners is our largest stakeholder in our database.
Arcadia Biosciences, Inc. (NASDAQ: RKDA)
Arcadia Biosciences, Inc. (NASDAQ: RKDA) is a farm economics company that focuses on hemp, wheat, and soybeans to increase agricultural production. Davis, California, is home to an agricultural biotechnology company. Arcadia Biosciences, Inc. (NASDAQ: RKDA) shares have risen about 53% in the past month due to the Russia-Ukraine conflict and the resulting spike in commodity demand.
Raghuram Selvaraju of H.C. Wainwright dropped his price target on Arcadia Biosciences, Inc. (NASDAQ: RKDA) to $6 from $7 on January 3 and maintained a 'Buy' rating on the stock. The analyst pointed out that Arcadia Biosciences, Inc. (NASDAQ: RKDA) has $35.5 million in cash at the end of the third quarter, enough to fund operations through 2023 and assist the firm reach cash flow breakeven.
According to Q4 data, six hedge funds own Arcadia Biosciences, Inc. (NASDAQ: RKDA), up from 2 funds the previous quarter. With 338,600 shares worth $352,000, Renaissance Technologies is the largest stakeholder in the firm.
Seaboard Corporation (NYSE: SEB)
Seaboard Corporation (NYSE: SEB) is a diversified agriculture and transportation company in Kansas. Seaboard Corporation's (NYSE: SEB) Commodity Trading and Milling sector offers wheat, corn, soybean meal, and other commodities to clients in Africa, South America, and the Caribbean.
Seaboard Corporation (NYSE: SEB) announced a quarterly dividend of $2.25 per share on February 16. The dividend was paid on March 7 to stockholders who had been registered by February 25.
On February 15, Seaboard Corporation (NYSE: SEB) released its fourth-quarter results, reporting net sales of $2.46 billion, up from $1.99 billion the previous quarter. For the quarter, the company's profits per share were $103.27.
At the end of the fourth quarter of 2021, 14 hedge funds monitored had long holdings in Seaboard Corporation (NYSE: SEB), up from 13 funds the previous quarter. With 10,048 shares worth $39.5 million, Irving Kahn's Kahn Brothers are one of the company's largest stockholders.
In its Q2 2021 investor letter, Third Avenue Management had the following to say about Seaboard Corporation (NYSE: SEB):
"Compounders in the Fund's category include corporations like Seaboard" (conglomerate). We think that these firms' strong balance sheets and reasonable capital deployment will enable them to compound NAV for many years to come. Financial services firms make up nearly a third of the compounder group, with well-capitalized regional banks accounting for 21% of the portfolio."
The Andersons, Inc. (NASDAQ: ANDE)
The Andersons, Inc. (NASDAQ: ANDE) is an agribusiness firm established in Ohio that sells seed and plant nutrients. Bio Pass, a microbial package that works with liquid fertilizers to improve soil nutrients and nurture better maize and wheat crops, is a prominent product of The Andersons, Inc. (NASDAQ: ANDE).
On February 15, Andersons, Inc. (NASDAQ: ANDE) reported fourth-quarter profits of $1.14, beating expectations by $0.47. The company's sales for the quarter were $3.78 billion, which was $732.68 million more than the market expectation. The Andersons, Inc. (NASDAQ: ANDE) said that fertilizer prices and farm revenue were both high, and the business forecasts ongoing solid performance until 2022.
The Andersons, Inc. (NASDAQ: ANDE) analyst Ben Klieve boosted his price target to $50 from $45 on February 17 and maintained a 'Buy' rating on the stock. Following the company's "record" Q4 performance, the analyst raised his FY22 and FY23 projections. Klieve observed that shares remained flat after the release of the quarterly report, owing to market fears that macroeconomic circumstances had resulted in peak earnings power. He also said that The Andersons, Inc. (NASDAQ: ANDE) had "much more profit-generating avenues than the market understood in yesterday's reaction."
According to Q4 database, 15 hedge funds were positive on The Andersons, Inc. (NASDAQ: ANDE), up from 14 firms the previous quarter. With 362,928 shares worth $14 million, Arrowstreet Capital is the company's biggest stakeholder in our database.
The Andersons, Inc. (NASDAQ: ANDE), like Adecoagro S.A. (NYSE: AGRO), Archer-Daniels-Midland Company (NYSE: ADM), and Bunge Limited, is attracting the attention of top hedge funds (NYSE: B.G.).
Teucrium Wheat (NYSE: WEAT)
Teucrium Wheat (NYSE: WEAT) is a wheat future exchange-traded fund with a market capitalization of $387 million as of March 20, 2022. Teucrium Wheat (NYSE: WEAT) is an appealing alternative for portfolio diversification in a hot commodities market since wheat prices are not associated with U.S. equities.
Teucrium Wheat (NYSE: WEAT) was founded in September 2011 and had a 1.14 percent expense ratio. U.S. Bank Global Fund Services is the fund's administrator.
MGP Ingredients, Inc. (NASDAQ:MGPI)
MGP Ingredients, Inc. (NASDAQ: MGPI) is a distilled spirits and food ingredient company based in Atchison, Kansas. MGP Ingredients, Inc. (NASDAQ: MGPI )'s Solutions section produces customized wheat starches and wheat proteins for food applications.
MGP Ingredients (NASDAQ: MGPI) announced a quarterly dividend of $0.12 per share on February 24. The dividend will be paid on March 25 to stockholders who have registered by March 11.
MGP Ingredients (NASDAQ: MGPI) was given a 'Buy' rating and a $100 price target by Lake Street analyst Ben Klieve on February 22. MGP Ingredients (NASDAQ: MGPI) is a "compelling investment," according to the analyst, for those searching for cheap branded spirit chances and those hoping to profit from the plant-based protein revolution without taking on the risk of investing in individual brands.
On December 31, a total of 17 hedge funds had long holdings in MGP Ingredients (NASDAQ: MGPI), up from 13 funds the previous quarter. Among the 17 funds, Arrowstreet Capital is the largest stakeholder in MGP Ingredients (NASDAQ: MGPI), with 165,405 shares valued at over $14 million.
Adecoagro S.A. (NYSE:AGRO)
Adecoagro S.A. (NYSE: AGRO) is a Luxembourg-based agro-industrial firm that grows and sells wheat, maize, soybeans, peanuts, cotton, and sunflowers. Dairy operations and land transformation are also part of the company's operations.
On March 14, Adecoagro S.A. (NYSE: AGRO) announced non-GAAP EPS of $0.51 for the fourth quarter, with sales of $312.76 million, up 34.0 percent year over year. The company's shares have risen 36.44 percent in the past month amid the Russia-Ukraine conflict.
On October 18, Morgan Stanley analyst Javier Martinez de Olcoz Cerdan raised Adecoagro S.A. (NYSE: AGRO) from 'Equal Weight' to 'Overweight,' with a $12 price objective, up from $9.
According to fourth-quarter database, 22 hedge funds were positive on Adecoagro S.A. (NYSE: AGRO), up from 12 funds the quarter before. In Q4, the total stakes held were $266.4 million. Route One Investment Firm, owned by William Duhamel, is a key stakeholder in the company, owning 14.3 million shares worth more than $110 million.
Bunge Limited (NYSE: B.G.)
Bunge Limited (NYSE: B.G.) is a global agricultural and food corporation that was formed in 1818 and is based in St. Louis, Missouri. Wheat, maize, soybeans, rapeseed, canola, and sunflower seeds are among the agricultural commodities sold by the firm.
Bunge Limited (NYSE: B.G.) analyst Benjamin Theurer boosted his price objective to $120 from $110 on March 14 and maintained an 'Overweight' rating on the stock. Bunge Limited (NYSE: B.G.) will have "another excellent year," according to an analyst, who predicts profits per share of at least $9.50 in 2022.
Bunge Limited (NYSE: B.G.) announced a quarterly dividend of $0.525 per share on February 24, in line with prior years. The dividend will be paid on June 2 to stockholders who were registered on May 19.
Bunge Limited (NYSE: B.G.), a defensive food crisis play, has been up 36% in the previous six months.
Hedge funds were positive on Bunge Limited (NYSE: B.G.) in the fourth quarter of 2021, up from 37 funds in the previous quarter. With almost 1 million shares worth $95.6 million, Candlestick Capital Management has the largest holding in Bunge Limited (NYSE: B.G.) among those funds.
Archer-Daniels-Midland Company (NYSE: ADM)
Corn, wheat, milo, oats, and barley are among the agricultural commodities procured and distributed by Archer-Daniels-Midland Company (NYSE: ADM). Despite the Ukraine conflict and the resulting demand for commodities, the company's stock has increased about 40% in the previous six months and remains a winner in its category.
Barclays analyst Benjamin Theuer maintained an 'Overweight' rating on Archer-Daniels-Midland Company (NYSE: ADM) and boosted the firm's price objective to $88 from $80 on March 4. The analyst said that the stock would rise and that Archer-Daniels-Midland Company (NYSE: ADM) would gain from both short-term disruptions and its excellent long-term fundamentals.
On January 25, Archer-Daniels-Midland Company (NYSE: ADM) released its fourth-quarter results, with profits per share of $1.50, $0.13 more than the estimate. The company's sales for the quarter were $23.09 billion, up 28.43 percent year over year and $2.86 billion more than expected.
On December 31, Diamond Hill Capital, one of the 41 hedge funds in our database that were bullish on Archer-Daniels-Midland Company (NYSE: ADM), was the company's largest shareholder, with 5.70 million shares worth $386 million.
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