Wheat Kings - Implementation
Filling our food basket
Wheat Kings - Implementation
In our April 29th note the 🐿️ outlined a bullish thesis for the agricultural commodity trading houses. After a brief (‘man flu’ related) delay we are now publishing our new Agribusiness basket.
The outbreak of the Russia / Ukraine war (with fears about suspension of the Black Sea grain trade) did a superb job of sucking investors into agribusiness equities at their all-time highs.
The ‘market gods’ have subsequently done a brutally efficient job of punishing investors that were late to the ag party. Shares outstanding in VanEck’s MOO 0.00%↑ Agribusiness Equities ETF have halved since May 2022, alongside a 35% slide in price.
MOO is an interesting product and provides investors with a broad-based sector and geographical coverage of the Ag theme. Some may be put off by the fund’s large weightings in the relatively complex / ‘tough to value / understand’ businesses like Corteva, Zoetis and Bayer, but it is a pretty good ‘one stop shop’.
Additionally, our focus ‘Merchants of Grain’ names, ADM and Bunge, account for less than 9.5% of MOO’s assets. Regular readers will also know that the fertilizer space is of huge interest to this rodent. However, the 🐿️’s thoughts have evolved on this topic. I plan on being a bit more cautious than I had initially envisaged. We are also adding some Ag equipment exposure.
Which brings us to our basket…