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Dose of Financial News_ Stock watch. Traders brace for food price pain amid new Russia tension.mp4
Wheat prices (ZWZ2) rose 5.7% in anticipation of traders expecting food prices to pick up, after Russia exited the Ukraine gain deal and threatened to cut off Ukraine’s wheat supply from the world. Typically, the globe relies on the Black Sea region for a quarter of annual wheat and barley exports, a fifth of global corn and the bulk of its sunflower oil. So, Russia’s termination of the Black Sea deal means farmers face a possible lack of storage space with wheat and corn nowhere to go, plus fertilizers which farmers rely on, to grow crops could be cut off, meaning the fertilizer market will also likely once again focus on supply concerns. Here are the three agricultural elements we are watching…including the stocks, commodities, and equities to watch.
Firstly - We will be watching Wheat and corn prices, as well as watching agricultural companies including General Mill (GIS), GrainCorp (GNC), Elders (ELD), as well as Fertilizers companies including CF industries (CF), Archer Daniels (AMD). These companies on-sell such commodities and may be expected to sell goods at a premium given supply could be cut down.
Secondly - We will also be watching ETFs like – Invesco DB Agricultural Fund (DBA), iShares MSCI Global Producers ETF (VEGI) and Betashares Global Agricultural Companies ETF (FOOD). Betashares Global Agricultural Companies ETF (FOOD).
Thirdly- we will also be watching the flow on effects of the rising cost of wheat. It not only makes bread more expensive, but also the cost of chicken will likely rise, given Wheat is the biggest cost growing a chicken (75%). So if wheat prices continue to rise, farmers and sellers will likely be forced to hike their prices. So it could be worth watching companies like Tyson Foods (TSN) who is one of the largest processors and sellers of chicken, mutton and beef in the US. In Australia there is Inghams (ING), who focuses on producing and selling poultry. Both Tyson Foods and Inghams shares are 8% up off their October low
03:10 minutes
Tags: Archer Daniels, CF Industries, Chicken, corn, Elders, ETFs, fertiliser, fertilizer, food, general mills, GrainCorp, investing, Stocks, trading, wheat