Three Stocks Thought to Climb in April 2022: Archer-Daniels-Midland
London wheat futures (LWBc1) rose to £307.50 per tonne by March 31. This is more than 35% higher than £226.5 recorded a couple of days before the start of military conflict in Ukraine. By the beginning of April wheat contracts were about 61.5% higher than in the same season a year ago. Barley was up by almost 44% during March 2022, while U.S. Corn Futures were almost a quarter more expensive than at the beginning of January.
In some parts of the world there are food shortages due to crop failures and supply disruptions following the corona crisis. Top level politicians, including speakers of the French agriculture ministry and U.S. President Joe Biden, are referring to this as direct consequences of war as well as consequences of economic and financial sanctions that were placed on Russia. Russia and Ukraine together account for up to a quarter of global wheat exports and almost a fifth of all corn deliveries, as well as 12% of the total calories supplied to the world market, according to Bloomberg. These two countries produce grain at lower prices than North America and Europe. In recent days, Russian authorities have also been actively discussing options like selling resources for national currency or even only to "friendly countries".
Anyway, even if food prices did partially stabilise, they probably remain high. One of the largest agricultural originations and processing companies, Archer-Daniels-Midland may further benefit from the situation. It offers sustainable nutrition for humans and animals, and it is also engaged in developing energy and bio-based alternatives. Big money may continue to lift the stock even though the ADM price is almost 40% higher compared to pre-Christmas dates. It could easily become the next hot stock. The company's cap now exceeds $50 billion, but it may become even higher before the release of the next quarterly report scheduled for May 3. ADM sales and earnings are growing at double-digit rates, as its one-year sales growth rate was 32.4%, and three-year equity per share (EPS) growth rate was above 19%. Nearly 9% of the short-term correction of the ADM shares which were priced down on March 25-29 have already met active demand, causing quotes to quickly recover more than half of the correction losses.