In this article, we discuss 10 wheat stocks to buy now. If you want to skip the first part of our list as well as our detailed analysis of the state of wheat and agricultural commodities amid the Russia-Ukraine war, click 5 Wheat Stocks to Buy Now.
The Russian attack on Ukraine has caused massive global repercussions, contributing to high inflation, an evolving energy crisis, a shortage of commodities, and sanctions impacting businesses who had to exit operations in Russia.
Wheat Market Outlook 2022
The war has sent global wheat prices skyrocketing, with the Chicago Board of Trade reporting that benchmark wheat futures were priced at a record high of $13.50 per bushel on March 5, owing to the intensity of the war and the resultant supply chain challenges.
The Food and Agriculture Organization disclosed that Russia and Ukraine are responsible for 14% of global wheat output, and that even before the war and resultant trade embargos, lower wheat production in Russia, Canada, and the United States was putting the wheat market under heavy strain.
The Food and Agriculture Organization of the United Nations released a report on March 4 which stated that world wheat prices rose by 2.1%, primarily due to global supply uncertainties in the Black Sea region that constrained exports from Ukraine and the Russian Federation. The FAO Cereal Price Index averaged 144.8 points in February, increasing 4.2 points compared to January and 18.7 points from the previous year. In February, prices of all important grains and cereals soared in comparison to the previous month.
Other than Russia and Ukraine, the major wheat producing regions are the European Union, the United States, Australia, and Argentina, and these countries are positioned to benefit from the tight supply in the Black Sea region. However, the US, Argentina, and Brazil are facing a drought, and high wheat prices might continue to rise even if supply chain challenges are resolved.
Canadian wheat saw the biggest price shock as per reports on February 10, increasing by $22 per tonne in January to $405 per tonne in February. Similarly, quotes in Australia jumped to $347 per tonne of wheat given strong international demand, primarily from China and Indonesia.
Amid the concerns of availability triggered by geopolitical tensions, commodities such as wheat are in high demand, benefiting companies like Adecoagro S.A. (NYSE:AGRO), Archer-Daniels-Midland Company (NYSE:ADM), and Bunge Limited (NYSE:BG).
Pixabay/Public Domain
Our Methodology
After a thorough assessment of the commodities market, we selected companies that are major suppliers of wheat. We have mentioned available analyst ratings for the stocks, in addition to the hedge fund sentiment, which was gauged from Insider Monkey’s fourth quarter database of 924 hedge funds that filed 13Fs for the December 31 reporting period.
Wheat Stocks to Buy Now
10. Bayer Aktiengesellschaft (OTC:BAYRY)
Number of Hedge Fund Holders: 1
Bayer Aktiengesellschaft (OTC:BAYRY) is a German multinational life sciences and pharmaceutical company, with a product portfolio that involves pesticides, seeds, and plant biotechnology solutions.
Bayer Aktiengesellschaft (OTC:BAYRY) acquired U.S. seeds company Monsanto in June 2018 for $66 billion, which ranks as one of the biggest German acquisitions of all time. Monsanto operates as a Bayer Aktiengesellschaft (OTC:BAYRY) subsidiary, and is a provider of wheat, herbicides, and genetically engineered crops.
On March 1, Bayer Aktiengesellschaft (OTC:BAYRY) announced net profit for the fourth quarter of 2021 of €1.16 billion, up from €308 million in the prior-year quarter and exceeding the market consensus of €731 million. The company’s earnings and sales guidance for 2022 also improved. Q4 sales for Bayer Aktiengesellschaft (OTC:BAYRY)’s agricultural crop science division increased 11% year-over-year to €4.49 billion.
Jefferies analyst Charlie Bentley initiated coverage of Bayer Aktiengesellschaft (OTC:BAYRY) on March 14 with a ‘Buy’ rating and a €64 price target. According to the analyst, agriculture fundamentals are the strongest they’ve been in almost a decade, even before the potential impact of disruptions because of war in Ukraine. He noted that Bayer Aktiengesellschaft (OTC:BAYRY) trades at an “undemanding” valuation.
In the fourth quarter of 2021, Frederick Disanto’s Ancora Advisors owned 710 shares of Bayer Aktiengesellschaft (OTC:BAYRY), worth $9,000.
In addition to Adecoagro S.A. (NYSE:AGRO), Archer-Daniels-Midland Company (NYSE:ADM), and Bunge Limited (NYSE:BG), Bayer Aktiengesellschaft (OTC:BAYRY) is a notable supplier of wheat amid the market crisis.
9. Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY)
Number of Hedge Fund Holders: 4
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY) was incorporated in 1936 and is headquartered in Buenos Aires, Argentina. Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY), abbreviated Cresud SA, produces agricultural commodities for customers in Brazil and other Latin American countries, selling wheat, corn, soybeans, cotton, sunflower, and sugarcane.
In its Q4 earnings release on February 14, Cresud SA announced a 1H GAAP EPS of ARS30.51. Revenue over the period came in at ARS25.04 billion, up 39.3% year-over-year. The stock has climbed 29.33% over the last month, as commodities rose during the Ukraine war.
According to the fourth quarter database of Insider Monkey, 4 hedge funds reported owning stakes in Cresud SA as of December 31, valued at $10.5 million, compared to 6 funds in the prior quarter, holding stakes in Cresud SA worth $11 million. Ari Zweiman’s 683 Capital Partners is the leading shareholder of the company in our database, with 1.80 million shares worth $8.5 million.
8. Arcadia Biosciences, Inc. (NASDAQ:RKDA)
Number of Hedge Fund Holders: 6
Arcadia Biosciences, Inc. (NASDAQ:RKDA) is involved in farm economics and aims to increase crop productivity, focusing primarily on hemp, wheat, and soybean. The agricultural biotechnology firm is headquartered in Davis, California. Amid the Russia-Ukraine war and the resultant increase in demand for commodities, Arcadia Biosciences, Inc. (NASDAQ:RKDA) shares have gained close to 53% in the last month.
On January 3, H.C. Wainwright analyst Raghuram Selvaraju lowered his price target on Arcadia Biosciences, Inc. (NASDAQ:RKDA) to $6 from $7 and kept a ‘Buy’ rating on the shares. The analyst noted that Arcadia Biosciences, Inc. (NASDAQ:RKDA) ended the third quarter with approximately $35.5 million in cash, which can finance operations well into 2023 and help the company achieve cash flow breakeven.
According to Insider Monkey’s Q4 data, 6 hedge funds reported owning stakes in Arcadia Biosciences, Inc. (NASDAQ:RKDA), up from 2 funds in the prior quarter. Renaissance Technologies is the biggest shareholder of the company among that group, with 338,600 shares worth $352,000.
7. Seaboard Corporation (NYSE:SEB)
Number of Hedge Fund Holders: 14
Seaboard Corporation (NYSE:SEB) is a Kansas-based agribusiness and transportation conglomerate. The Commodity Trading and Milling segment at Seaboard Corporation (NYSE:SEB) sells wheat, corn, soybean meal, and other commodities to customers in Africa, South America, and the Caribbean.
On February 16, Seaboard Corporation (NYSE:SEB) declared a $2.25 per share quarterly dividend. The dividend was paid on March 7, to shareholders of record on February 25.
Seaboard Corporation (NYSE:SEB) reported its Q4 results on February 15, posting net sales of $2.46 billion, up from $1.99 billion in the prior-year quarter. The company’s earnings per share for the period amounted to $103.27.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 14 funds held long positions in Seaboard Corporation (NYSE:SEB) at the end of 2021, up from 13 funds in the earlier quarter. Irving Kahn’s Kahn Brothers is one of the leading shareholders of the company, with 10,048 shares worth $39.5 million.
Here is what Third Avenue Management had to say about Seaboard Corporation (NYSE:SEB) in its Q2 2021 investor letter:
“The Fund’s compounder bucket includes companies such as Seaboard (conglomerate). We believe balance sheet strength and prudent capital allocation should allow these companies to compound NAV for many years to come. Financial services companies are roughly one third of the compounder category and are largely well-capitalized regional banks which make up 21% of the portfolio.”
6. The Andersons, Inc. (NASDAQ:ANDE)
Number of Hedge Fund Holders: 15
The Andersons, Inc. (NASDAQ:ANDE) is an Ohio-based agriculture company that deals in seed products and plant nutrients. A notable product of The Andersons, Inc. (NASDAQ:ANDE) is Bio Pass, a microbial package offering a blend of bacteria that works with liquid fertilizers to enhance soil nutrients and cultivate healthier crops of corn and wheat.
The Andersons, Inc. (NASDAQ:ANDE) published its fourth quarter earnings on February 15, posting EPS of $1.14, exceeding estimates by $0.47. The company’s revenue for the period was $3.78 billion, above market consensus by $732.68 million. The company announced that fertilizer prices and farm income were both high, and The Andersons, Inc. (NASDAQ:ANDE) expects continued strong performance into 2022.
On February 17, Lake Street analyst Ben Klieve raised his price target on The Andersons, Inc. (NASDAQ:ANDE) to $50 from $45 and kept a ‘Buy’ rating on the shares. The analyst stated that after the company’s “record” Q4 results, he is raising his FY22 and FY23 estimates. Klieve noted that shares traded flat after the quarterly report was published, given market concerns that macro conditions have resulted in peak earnings power. He also said that The Andersons, Inc. (NASDAQ:ANDE) has “far more sources of profit generation than the market appreciated in yesterday’s response.”
According to the Q4 database of Insider Monkey, 15 hedge funds were bullish on The Andersons, Inc. (NASDAQ:ANDE), up from 14 funds in the earlier quarter. Arrowstreet Capital is the largest shareholder of the company in our database, with 362,928 shares worth $14 million.
The Andersons, Inc. (NASDAQ:ANDE) is gaining the attention of elite hedge funds, just like Adecoagro S.A. (NYSE:AGRO), Archer-Daniels-Midland Company (NYSE:ADM), and Bunge Limited (NYSE:BG).
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Disclosure: None. 10 Wheat Stocks to Buy Now is originally published on Insider Monkey.
