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AGCO Shares Popped: What You Need to Know

By Travis Hoium – Updated Apr 6, 2017 at 10:12AM

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Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: AGCO Corp. (NYSE: AGCO) rose 10% in intraday trading as low supplies in agriculture products pushed equipment makers higher.

So what: The Department of Agriculture cut supply estimates of corn, soybeans, and wheat, pushing prices higher. Those higher prices spilled over into the equipment market and have AGCO up along with Deere & Co. (NYSE: DE) and CNH Global (NYSE: CNH) on speculation that equipment sales will pick up.

Now what: Higher commodity prices mean more demand for product and money in farmers’ pockets to buy equipment. High prices are great news for equipment makers and should push demand and continue the financial improvement of late after a rough 2009. This is more than just a market blip, but I want to see bottom-line results from AGCO before getting too excited.

Interested in more info on AGCO? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned here. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Deere & Company Stock Quote
Deere & Company
DE
$334.22 (-3.44%) $-11.91
AGCO Corporation Stock Quote
AGCO Corporation
AGCO
$97.12 (-3.88%) $-3.92

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