Top 5 Best Wheat Stocks to Watch
The wheat industry, and hence the best wheat stocks to watch, has been a popular topic so far this year, given the extreme volatility of commodity prices on the stock market.
Wheat is an important ingredient in much of the global food supply chain and as such, investors and traders, alike, have been paying much attention to the various wheat stocks and the price volatility which has come along with it throughout 2023.
While the volatility has likely been the core driver of the popularity of wheat stocks, it’s important to remember that this can bring both opportunity and risk – Not all stock sectors will be suitable for all investors.
Have you considered some of the best wheat stocks to watch, how to factor them into your portfolio and what the future, potentially, holds for wheat stocks?
We review in this article some of the best wheat stocks to watch (based on the subjective opinion of the author), advantages and disadvantages to consider, how to invest or trade wheat stocks directly, amongst other important points.
Sounds interesting? Keep reading to find out more about this core agricultural sub-sector.
Table of Contents
Best Wheat Stocks: An Introduction
As mentioned above, some of the best wheat stocks to watch offer an interesting landscape of opportunity and volatility to both investors and traders alike.
Most will be aware that both opportunity and volatility, while possibly beneficial, also come with reasonable risk which should always be considered before participating in any trading or investing.
The agriculture stock vertical typically covers various commodities which are also tradeable assets, with wheat stocks taking a high priority on the spectrum of importance.
Think about it – From bread, rice, pasta, cereals, pizza, biscuits, to beer, wheat-based Ethanol, to wheat-based animal feed... It’s hard to imagine a world without wheat and the products it makes possible to exist!
With overall global volatility in 2023, rising inflation, geopolitical turbulence, food shortages and the banning of food exports, this puts various wheat stocks even more in the spotlight.
It is also notable to mention, when defining exactly what companies can be considered as wheat stocks, it goes beyond the end products, themselves.
Equally, companies on the stock market which facilitate the production process of wheat can reasonably also be considered under the wheat stock umbrella of companies.
As it is reasonably well known, wheat is often referred to as the "staff of life", given its importance as a staple ingredient in homes all throughout the world.
Given its staple crop status, it comes to no surprise that wheat and hence, wheat stocks, is one of the most pivotal and important sub-sectors in the commodities market.
While extremely diverse as a commodity, wheat, like any other instrument or commodity, has many various factors which affect the availability and hence, the market price.
Is investing or trading wheat stocks a valid option for you? Only you can decide, based on your given risk profile.
Let’s now review the various advantages and disadvantages of the best wheat stocks to watch, giving you a deeper understanding of the sector and whether or not it is suitable for you.
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Best Wheat Stocks: Advantages and Disadvantages
Like with all tradeable assets or instruments, there are always advantages and disadvantages to consider before trading or investing.
Depending on the asset, there are always various factors to consider – Given a versatile and in-demand commodity like wheat, one can imagine there are equally many complexities and opportunities to uncover before making a formal decision.
We overview, below, both the advantages and disadvantages of the best wheat stocks to watch:
Best Wheat Stocks: Advantages
Hedge Against Inflation: Inflation can affect the price of various wheat end-products on the market and it is also considered a tangible asset. Generally speaking, the wheat price often rises during periods of inflation, providing a hedge against declining purchasing power.
Patterns of Seasonal Availability: As one can imagine, wheat prices will always be dictated by global seasonal factors – especially given ongoing concern with climate change. That said if following a typical seasonal cycle, investors and traders have the potential opportunity to time their investments based on the seasonal cycles which come with wheat growth and production.
Global Demand: Given the role of wheat in regard to the global food chain and its place as a staple in most households, this serves as an advantage to traders and investors. Simply put, the wheat market likely remains stable given the consumption levels are consistent.
Diversification: If investing or trading with wheat stocks in a given portfolio, this allows for added diversification, given wheat stocks often have a low correlation with other asset classes like stocks and bonds.
Best Wheat Stocks: Disadvantages
Limited Influence: Investing in wheat stocks, in comparison to other industry verticals, it is important to mention that it is very difficult to have any form of direct control over the given business or stock. Commodities, in general, are exposed to various dynamics within the given industry which are next to impossible to dictate – like climate change or geopolitical conflict.
Commodity-Specific Risks: Continuing from the above point, investors and traders need to be aware that wheat stock prices are very much dictated by external global factors, such as climate influences, diseases and other natural-bound factors.
Volatility: As with all commodities on the market, volatility is a very important factor to consider, as commodities can remain highly volatile depending on global and climate events, as well as imbalances in supply and demand.
Regulations: Various government policies and changing trade agreements will likely always have an effect on the price of wheat and hence, the price of wheat stocks.
When considering an investment in wheat stocks, it's essential to carefully weigh these advantages and disadvantages, conduct thorough research, and be prepared for the inherent risks associated with commodities trading.
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Top 5 Best Wheat Stocks to Watch
Are you ready to review the top 5 best wheat stocks to watch?
Below we take a look at some of the best wheat stocks to watch on the market, based on the subjective opinion of the other.
Bunge Inc is known in the agribusiness sector for the direct sales of wheat, soy, corn, amongst other types of grains. It remains in an important position given its diversified exposure outside of only wheat production.
- Expected in mid-2024, Bunge is planning a company merge with Viterra in an attempt to increase market share. This could be a positive long-term advantage for the stock.
- The company historically experiences heightened cyclical volatility compared to other wheat stocks, which could be considered a disadvantage.
A well-known American company and brand, Deere & Co facilitates the production of farm equipment and tractors, most specifically and popularly targeting the wheat industry and wheat farmers.
- Over the past 5 years, Deere & Co has seen continual growth in their Total Revenue, suggesting stability.
- With a 52-week range (as of October 2023) of $345-450, this could suggest slight volatility.
Archer-Daniels-Midland Co is a food conglomerate with high exposure to wheat products. They are responsible for refining wheat into various flour end-products.
- With a P/E ratio of 10 and dividend yield above 2%, along with ongoing growth over the last decade, these factors speak highly for the company.
- With a 52-week range (as of October 2023) of $69-98, this suggests high volatility which can carry higher risk for traders and investors.
Andersons Inc is a well-known chain supply agribusiness which buys and sells core commodities, like wheat and corn, with a core focus on plant nutrients. They are known for producing corn-based ethanol.
- The company has paid steady dividends over the last 5 years, suggesting general stability of the stock. Given its large market share in the wheat industry, this suggests a further overall market advantage.
- While The Andersons Inc has seen higher revenue due to inflation, this is not necessarily reflected in the overall company profits.
MGP Ingredients Inc produces grain products, mostly wheat, barley and rye distillery products used to produce alcoholic beverages like bourbon and various other spirits. They also produce wheat-based food products.
- From 2019-2022, MGP Ingredients has seen an impressive Total Revenue growth, a more than doubled TR if comparing 2019 with 2022.
- The above-mentioned growth was likely due to the 2020 pandemic and the increase in the demand for alcohol, which could imply that future revenue may slow down.
How to Buy the Best Wheat Stocks
Given the above information, if you feel the best wheat stocks to watch may be an appropriate fit for your trading or investment portfolio, you have the option to do both with Admirals.
As Admirals is a globally regulated and recognized online broker, you have the added security of knowing you are investing with a credible brand which maintains a reputation of confidence.
Whether you are interested in long-term investing, short-term trading, or both, you have access to these options at Admirals.
Using the innovative and well-known MetaTrader 5 platform, you can gain access to thousands of tradeable assets, including the various best wheat stocks to watch, from your desktop or mobile with a free Admirals account.
MetaTrader 5 offers trading robots, various charting options, indicators, free market data and more to those who utilize the platform.
If you’re interested in trading some of the best wheat stocks, you can do so via the Trade.MT5 platform with stock CFDs (Contracts for Difference).
For those interested to invest directly in some of the best wheat stocks, you can do so via the Invest.MT5 platform.
MetaTrader 5 is free to use with an Admirals account.
Ready to get started with the best wheat stocks to watch? Gain access to the MetaTrader 5 platform and start trading and investing today - Click the banner below to get started:
Best Wheat Stocks: Conclusion
While we are living in a world with a current state of high volatility, trading and investing can be an intimidating venture, which is an important factor to consider.
That said, given each individual is first establishing their risk management profile, this takes some of the pressure from those potential decisions being made.
Are investing or trading the best wheat stocks the right decision for you? Only you can decide.
Consider first registering a demo account with Admirals, where you can practice trading with virtual funds before investing real capital.
Once comfortable, you may then register for a live account where you can put your knowledge to work.
Versatile and essential, wheat stocks must be approached with an understanding of various factors within the agricultural industry.
Both compelling and challenging, it will be interesting to watch how wheat stock trends develop in the near future.
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What are the top wheat stocks to buy?
While this answer is always subjective, below we list some of the potential top wheat stocks to buy:
- Bunge Ltd
- Deere & Co
- Archer-Daniels-Midland Co
Are wheat stocks a good investment?
Whether or not wheat stocks are a good investment completely depends on each individual trader or investor. For those familiar with the agricultural industry and with a well-managed risk profile, wheat stocks could be a good investment.
Other Articles of Interest:
- The Best Food Stocks to Watch
- Top 5 Best Agriculture Stocks to Watch
- How to Trade with AI: MetaTrader 5 AI New Features
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