5 best wheat stocks to buy for Q3 2023

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Sep 22, 2023

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More acreage is dedicated to growing wheat worldwide than almost any other commodity. The amount of grain produced every year means there are plenty of companies that make a living from growing, transporting, or selling it. Here we pick out some of the best stocks in the wheat industry.

What are the top wheat stocks to buy?

Our experts have picked five top wheat stocks that we think offer the best way to invest in wheat right now. Sign up to a broker and start investing by clicking the links below, or keep reading to learn more about each company.

1. Bunge (NYSE:BG)

Bunge is an agribusiness company that mills, produces, and sells a large assortment of different grains. Wheat is one of those grains, along with soybeans and corn. That range means Bunge is a relatively secure company, as it can cope with a bad harvest or the failure of one of the grains.

The commodity industry is cyclical and tends to experience steady rises followed by a correction on a fairly regular basis. The Bunge stock price reflects this pattern, with a series of rises of 20-50% followed by drops back down over the past ten years.

Bunge is a great investment opportunity because it gives you a way of investing in the entire grain industry. Demand for grains to feed humans and livestock is only likely to rise over the next few years. Bunge offers a way to bet on that without risking it all on one specific grain making it one of the best wheat stocks to buy in 2023.

2. Adecoagro (NYSE:AGRO)

Adecoagro is a farming company that’s headquartered in Luxembourg but which actually operates in South America. It owns large amounts of farmland in Argentina, Brazil, and Uruguay, where it produces wheat along with other grains and commodities like sugar and food oils,

The company only went public in 2011, and has not been able to capitalise on its initial promise as well as it might have hoped. However, the war in Ukraine led to a substantial increase in its value – the stock jumped more than 60% in the months immediately afterward – and it has managed to return back up to those highs since.

With no signs of the war ending any time soon, its status as a leading wheat producer outside of Europe means it’s well-placed as an alternative source of food. That 60% could just be the start of a long term trend of rising demand for new sources of wheat.

3. CME Group (NASDAQ:CME)

CME Group represents a different way to enter the wheat market. CME Group runs the Chicago Mercantile Exchange – the most popular derivatives marketplace in the world. Essentially, it’s the best place to trade or invest in wheat futures, along with lots of other agricultural commodities.

Despite a plunge in the middle of 2022, when stock markets around the world were suffering, CME stock has been on an upward trend ever since it went public in 2018. It’s up 30% in that time, and has been particularly boosted by geopolitical events that make people interested in commodities, such as the war in Ukraine or OPEC meetings.

As more and more information becomes available to help people learn about trading commodities, CME could continue to extend its lead at the top of the exchange rankings. The more people that trade wheat and other grains, the more people are likely to use CME, which bodes well for its future prospects.

4. Deere & Company (NYSE:DE)

Deere & Company manufactures farming equipment and is one of the best-known companies in the US. Most famous for its huge tractors, John Deere also makes wheat planting and harvesting equipment.

Deere stock has been on the rise for a very long time. It’s a company that has successfully adapted to the modern era and which did extremely well in the aftermath of the pandemic. The stock price almost tripled between 2010 and 2020, then doubled again in the next six months.

While it may not continue to grow at such a rate, the future looks bright for Deere & Co. It has a great reputation and little competition, which allows it to dominate the farming industry and provide equipment for all sorts of different grain producers. It is also an ideal stock for income investors, as it pays a healthy dividend yield as well.

5. Archer-Daniels-Midland Company (NYSE:ADM)

Archer-Daniels-Midland is a food conglomerate that makes everything from animal feed to specialty oils. Its role in the wheat industry is to mill the grain to create flours and wheat protein that forms the basis for many food products, and it plays a crucial role in wheat supply chains.

Like John Deere, ADM has been growing steadily for a long time. It has been expanding its products and services over many years and that is reflected in the share price. It’s up about 250% since the Great Financial Crisis, and it has done very well since the pandemic.

ADM’s appeal is as much about the sheer range of products it offers as it is about wheat specifically. However, it’s a great option to give you an ‘in’ to the wheat stocks industry without being completely reliant on it.

Where to buy the best wheat stocks

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What is a wheat stock?

It’s a company that operates in the wheat industry. Wheat stocks can include anything from actually owning farmland and growing the grain, to manufacturing the equipment needed to turn it into food, flour, or oils, to transporting it around the world.

All these companies stand to increase their revenues and grow in value if there is more demand for wheat. That means if you think there is likely to be more demand in the future, it might be a good idea to invest in one, as then the value of your investment will rise as the company grows.

Are wheat stocks a good investment?

If you think there’s a reason why wheat might become more valuable in the near future, or you want to take advantage of dividends. Many companies in the wheat arena pay a regular dividend yield, and that can be a good way to earn more money from your investment without needing the share price to grow as much.

You should note, however, that any stock that relies on the commodity market tends to rise and fall in value in cycles. There is, broadly, a cap on how high the stock can go – wheat prices, like all commodity prices, can only go so high before farmers and food producers switch to something else, like corn or soybeans.

You might not get the same growth in value from a wheat stock as you might from a tech stock, for example. However, wheat is a critical resource in providing food security for many people around the world and so the flip side is also true: you’re unlikely to see their value completely collapse. What’s more, some external factors such as the global wheat exports shortage and the Russia-Ukraine war represent a good opportunity for a much more active movement on wheat prices and similar commodities.

Wheat is also an industry that requires a bit of experience to understand. It can be affected by events outside of anyone’s control, like bad harvests or natural disasters, and the unpredictable actions of governments to go to war or restrict exports. You need to have a firm grip on the news in order to invest successfully, and the latest wheat news is available below.