With food prices on the run, keep an eye on stocks like Deere (DE).
While DE is a $418 stock, recent weakness may be an opportunity here. In fact, after becoming overbought at $436.87, the stock pulled back to about $401.82, where it found support. From here, we’d like to see the stock retest $436.87 as the food crisis escalates.
At the moment, the world could run into an “extremely serious” food crisis…
All thanks to skyrocketing fertilizer prices on the heels of Russia’s invasion.
“Russia is a key global player in natural gas, a major input to fertilizer production. Higher gas prices, and supply cuts, will further drive fertilizer prices higher. Russia is one of the biggest exporters of the three major groups of fertilizers (nitrogen, phosphorus and potassium). Physical supply cuts could further inflate fertilizer prices,” says MSN.com.
Plus, as noted by Fox News:
Farmer Ben Neal says, “We’re getting hit on every front on every expense possible, from fertilizer to fuel to labor insurance, everything in between — our packing supplies. I think that that will soon be reflected at the grocery stores. On top of what we’re already seeing, these fertilizer price increases haven’t really affected the grocery store prices yet. They will start coming this summer.”
As things get worse, Deere could benefit. As noted by Bloomberg, “Farm machinery companies like Deere (DE) and AGCO (AGCO) will benefit from rising grain prices, as an already robust demand outlook, will now be fueled by the war.”