Global food markets have been strained by persistent inflation and volatile crop prices. Wheat, a core staple around the world, has seen notable swings due to factors like the Russia-Ukraine conflict and extreme weather that reduces yields. When harvests fall short or supply chains break down, prices can spike and push food costs higher.
For investors, those dynamics can create potential opportunities. Companies that grow, process, or support wheat and other grains may benefit during periods of higher prices, and some investors see them as a partial hedge against inflation. Before investing, it helps to understand where a company sits in the food supply chain and how exposed it is to commodity price moves.
Top wheat stocks to consider
The companies below provide exposure to wheat and other staple crops, as well as the equipment, inputs, and services that keep global food production running.
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Deere & Company (NYSE:DE) | $161.9 billion | 1.08% | Machinery |
| Archer-Daniels-Midland (NYSE:ADM) | $32.7 billion | 3.02% | Food Products |
| Bunge Global (NYSE:BG) | $23.0 billion | 2.36% | Food Products |
| Seaboard (NYSEMKT:SEB) | $4.7 billion | 0.19% | Food Products |
| MGP Ingredients (NASDAQ:MGPI) | $390.7 million | 2.62% | Beverages |
| Andersons (NASDAQ:ANDE) | $2.2 billion | 1.19% | Food and Staples Retailing |
| Adecoagro (NYSE:AGRO) | $1.4 billion | 3.50% | Food Products |
1. Deere and Co.
NYSE: DE
Key Data Points
Deere and Co. (DE +1.65%), better known as John Deere, is one of the most iconic U.S. farming companies. It manufactures tractors and other equipment, including combine harvesters.
In recent years, John Deere has been investing in technology to help with the automation of farming. Early in 2022, it unveiled a fully autonomous tractor that can go about its activity based on predefined functions while a farmer monitors its progress from a mobile device.
Given the cyclical costs of wheat and other agricultural goods, as well as a steadily growing global population that needs to be fed, adding automation to increase crop efficiency may be a big need in the coming decades.
2. Archer-Daniels-Midland
NYSE: ADM
Key Data Points
Archer-Daniels-Midland (ADM +0.68%) may not have the brand recognition John Deere does, but it is no less a giant in the agricultural industry. ADM helps manage the supply chain of food ingredients. It acquires basic commodities (including wheat), refines agricultural products into cooking ingredients, and resells and transports goods.
The company has faced significant disruption in the global food supply in the last few years, with the war in Ukraine putting further strain on supply chains. More recently, it's dealt with issues from global price declines for certain crops due to oversupply.
The company has also been working to regain investor confidence since 2024, when management announced that ADM had discovered multiple accounting errors, including improper recording of sales between different business segments within the company. Management had to issue restated financial statements and lower its profit outlook.
Supply Chain
While the impact of these accounting issues should be resolved with time, investors should watch closely as the company works to regain its growth trajectory in the coming quarters. It is still reporting earnings declines and working to manage costs.
On a more positive note, ADM is a solid dividend stock for investors looking for investment income. Given the stock's less-than-favorable performance of late, the yield has been pushed up to more than 3%.
3. Bunge
NYSE: BG
Key Data Points
4. Seaboard
NYSEMKT: SEB
Key Data Points
Seaboard (SEB -2.98%) is another food supply chain business that deals with the trading and overseas transportation of agricultural commodities, including wheat and other grains.
This multinational agricultural stock has been around for a long time and has a notoriously high stock price (currently about $4,560 per share) because the company has never approved a stock split.
Regardless, Seaboard has managed to generate significant sales for decades, even as profits have fluctuated. Its dividend yield is on the lower end at less than 1%, but the company pays an annual dividend of about $9 per share.
5. MGP Ingredients
NASDAQ: MGPI
Key Data Points
MGP (MGPI -1.88%) Ingredients is best known for its wheat, barley, and rye distillery products used in the production of alcohol, such as bourbon and other spirits. Additionally, MGP produces grain products for use in food, such as wheat starches.
Historically, MGP has been a cyclical business. Its sales are dependent not just on demand from its food and spirits customers but also on the market price of basic agricultural commodities.
6. The Andersons
NASDAQ: ANDE
Key Data Points
The Andersons (ANDE +2.59%) is another supply chain agribusiness. It buys and sells basic commodities and produces renewable fuel, such as corn-based ethanol. Since it deals in commodities, The Andersons has also been a highly cyclical stock.
The company's cyclical nature means that its top and bottom lines can fluctuate heavily based on the operating landscape. However, the company has grown its profits through the years and delivered solid cash flows.
The company has also steadily paid a regular dividend for many years. The stock currently yields about 1.4%.
7. Adecoagro
NYSE: AGRO
Key Data Points
How to choose the best wheat stocks
When choosing the best wheat stocks, it's important to understand that few companies are pure-play wheat producers. Instead, most operate across the broader agricultural value chain -- from equipment manufacturing to global processing and trading.
For instance, large, diversified firms like Archer-Daniels-Midland and Bunge manage the storage and processing of wheat into flour and food products. Companies like Deere & Company benefit when high wheat prices increase farmers' profitability, which leads to more equipment spending.
Wheat has high production costs, so look for companies with strong operating margins and high earnings per share to ensure they can handle price fluctuations. Many established agricultural stocks offer dividends that can provide investors with income during market volatility.
Be sure to focus on industry leaders with extensive global supply chains that can shift sourcing if one region suffers a poor harvest. External factors like fertilizer and fuel prices directly affect farmer profitability. A strong U.S. dollar also makes American wheat more expensive for foreign buyers, which can affect demand and prices.
Pros and cons of investing in wheat stocks
There are numerous pros and cons to consider when it comes to investing in wheat stocks, either through direct ownership of shares in companies involved in the wheat industry or indirectly through exchange-traded funds (ETFs).
On the pro side, here are some points to consider:
- Diversification: Wheat stocks can help diversify your portfolio since they don't necessarily mirror the movements of other asset classes like stocks and bonds. Some wheat stocks may also be exposed to other crops or business segments, further enhancing your portfolio diversification.
- Hedge against inflation: Investing in wheat can potentially act as a hedge against inflation since commodity prices tend to rise during inflationary periods.
- Strong demand: Global population growth and increased demand for livestock feed contribute to a strong demand for wheat, potentially driving up prices and benefiting wheat-related companies.
- Return opportunity: When demand is high or supply is constrained, the price of wheat and wheat-related stocks can increase significantly, offering the potential for substantial returns for long-term shareholders.
- Familiarity: Many wheat stocks are associated with well-known brands, which can make them a comfortable choice for buy-and-hold investors.
At the same time, there are also some cons to be aware of before you put cash to work in this space.
- Volatility: Wheat prices are subject to volatility due to factors like weather conditions, crop yields, geopolitical events, government policies, and currency fluctuations.
- Risk: Investing in individual stocks, including wheat-related stocks, carries inherent risks and unpredictability, since the performance of a company depends on factors beyond wheat prices.
As always, whether you want to put cash to work in wheat stocks or other adjacent businesses, it is best to work towards building a well-diversified portfolio of 25 or more quality stocks across various sectors. That way, you can benefit from the growth of businesses in a wide range of market environments.
How to invest in wheat stocks
If you want to invest in any of the wheat stocks mentioned on this list, here's the process you need to follow.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
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