Jul. 2 at 3:04 AM
$WEN Why a "Flight to Safety" into Food Stocks?
- High potential for both Iran and Russia/Ukraine wars to end within the next 3-6 months. Both wars affect Oil, Fuel, and Fertilizer costs (all drive food costs); but Russia affects US Oil more than Iran (long story), and Russia/Ukraine affect grain prices (wheat most of all).
- Lower Oil/Fuel prices = more disposable income, more willingness to drive to get food, and Food Deliveries are cheaper (margins).
- Most all Commodities trading will see stabilization of prices as Oil/Fuel prices come down, with tertiary factor for Fertilizer, and all grains.
- Wheat is higher because Russia and Ukraine are among the world's largest producers. See the 5-year chart for Wheat Spot Price, note Feb 2022 spike when Ukraine was first invaded. Potential for inverse of that action for wheat and wheat-sensitive stocks once peace is final (see
$FLO as great example, another of my top-3 bottom feeding stocks I list in my profile view).
- Food = NEED, Tech = WANT.
