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Four Agricultural stocks to look at amid rising crop prices- SHV, GNC, WOA, DBF - YouTube
Channel: Kalkine Media
[9]
Australian Bureau of Agricultural and Resource
Economics and Sciences (ABARES) has predicted
[45]
gross value of Australia鈥檚 agricultural
production to reach AU$73 billion in 2021-2022.
[54]
This would the first time, if the agricultural
gross value exceeds AU$70 billion.
[60]
The value of crop production is expected to
hit AU$39.5 billion at grow rate of 7%, driven
[67]
by solid price increases for grains, cotton
and sugar.
[69]
However, ABARES also highlighted the possible
risk with respect to commodity prices.
[70]
The COVID-19 vaccine distribution pace is
a key downside risk.
[71]
Continued outbreaks and slow vaccination pace
could result in severe illness or death, restricting
[72]
travel and affecting discretionary spending.
[73]
This may result in reduced prices for agricultural
products.
[74]
Labour shortage during the seasonal harvest
labour may pose as an additional challenge,
[77]
creating pressure for businesses looking to
secure temporary workers.
[80]
With this backdrop, let us look at four agricultural
stocks.
[86]
Select Harvests Limited (ASX:SHV)
[89]
Select Harvests is a fully integrated almond
business.
[93]
It released its market update on the 2021
crop, the existing market situations, and
[97]
the sale of the Lucky & Sunsol brands.
[99]
In 2021, 80% of the crop was processed.
[100]
It expects the crop volume, including the
crop from Piangil Almond Orchard鈥檚 acquisition,
[101]
to be ~ 28,250 MT.
[102]
Further, it updated that the market pricing
increased by A$0.50/kg to A$7.25/kg - A$7.75kg
[103]
since its last update on 28 July 2021.
[104]
The full-year crop shipments issued by the
Almond Board of California July Report from
[106]
August 2020 to July 2021 increased by 22.2%
compared to the prior year.
[113]
Further, the Almond Board of Australia YTD
March to June reported export shipments growth
[119]
of 44.5%.
[121]
It confirmed that the demand continues to
stay strong.
[124]
70% of SHV鈥檚 2021 crop is committed at prices
between AU$6.25 per kg to AU$6.75 per kg.
[126]
90% of the crop is covered at 0.73AUD/USD.
[127]
However, the Company feels that shipping remains
a challenge as access to shipping is tough
[132]
to India & China.
[133]
In FY2022, the crop is advancing well with
excellent tree health in all areas.
[137]
DO READ: Select Harvests (ASX:SHV): Citi sees
NPAT to grow, initiates rating
[141]
On 16 September 2021, SHV closed at AU$8.320,
down 0.121% from the previous close.
[146]
GrainCorp Limited (ASX:GNC)
[150]
GrainCorp Limited is an integrated grain and
edible oils business.
[154]
On 12 August 2021, the Company provided its
FY2021 guidance.
[159]
It increased its Underlying EBITDA range from
its previous AU$255 million to AU$285 million
[166]
to AU$310 to AU$330 million.
[168]
Similarly, it increased the NPAT guidance
range from AU$80 million to AU$105 million
[174]
to AU$125 million to AU$140 million.
[176]
RELATED READ: GrainCorp (ASX:GNC) Reveals
Stellar Earnings Guidance For 2021
[180]
The upgraded FY2021 guidance indicates the
robust performance of its east coast Australian
[186]
grains business after the super 2020-21 harvest.
[192]
Post-harvest winter receivals plus elevated
summer receivals and the positive outlook
[197]
for winter crop resulted in robust export
volumes, forward contracted sales, along with
[203]
supply chain margins.
[204]
Further, the Company witnessed a strong demand
for superior Australian grain, especially
[205]
with the latest weather-related crop production
challenges in the northern hemisphere.
[206]
July 2021 was the best month of contracted
sales on record.
[210]
The Company anticipates that the total exports
for FY2021 would be at the top end of earlier
[215]
expectations.
[217]
On 16 September 2021, GNC closed at AU$6.520,
up 0.307% from the previous close.
[227]
Wide Open Agriculture Ltd (ASX:WOA)
[230]
Australia's leading regenerative food, beverage
and agriculture company, Wide Open Agriculture
[237]
Ltd, reported 212% growth in its revenue from
ordinary activities to AU$4.744 million.
[246]
However, it experienced a significant loss
of 406% during FY2021 to AU$7.530 million
[257]
compared to the previous corresponding period.
[260]
During FY2021, the Company achieved three
key milestones.
[263]
The 8th quarter of successive growth due to
its food brand, Dirty Clean Food.
[264]
It launched and grew the market share of the
world's first regenerative, carbon-neutral
[265]
oat milk.
[266]
Advanced in the direction of a pilot plant
to make a distinctive plant-based protein
[267]
from Australian Sweet Lupin.
[269]
By the end of FY2021, the Company had net
cash of AU$12.9 million.
[274]
RELATED READ: Wide Open Agriculture (ASX:WOA)
Marks 239% Revenue Gain In Q2 FY21
[279]
The Company aims to penetrate the largest
& fastest growing food and drink markets advanced
[280]
dramatically.
[281]
During FY2021, WOA grew its revenue base while
launching new regenerative products and undertaking
[282]
significant R&D programs that are likely to
add long-term company value and significant
[283]
environmental impact.
[284]
On 16 September 2021, WOA closed flat at AU$0.775.
[286]
Duxton Broadacre Farms Limited (ASX:DBF)
[290]
Duxton Broadacre Farms is an ASX-listed entity
offering investors with exposure to a diversified
[296]
portfolio of high-quality, efficient Australian
farms.
[301]
In FY2021, the Company reported a 68.29% growth
in total revenue to AU$21.272 million.
[305]
It made a massive growth of 195.91% in its
net profit to AU$1.406 million.
[308]
On 27 July 2021, Duxton Broadacre released
its market update for July 2021, the Company
[311]
updated that the winter crops are performing
well in the wet weather conditions with all
[314]
necessary crop inputs positioned and held
on the farm.
[315]
Ginning of cotton continued over July 2021.
[316]
It delivered good results and overall yields
was in range of 10-10.5 bales per hectare.
[318]
All harvested cotton modules were shipped
to the gin.
[321]
Pasture across the aggregation remains to
grow well, backed by the heavy rain.
[328]
In the announcement, DBF highlighted that
calving was progressing well, lamb marking
[334]
was mostly complete after some delays from
wet weather.
[338]
The lambing rate was 140% around most of the
flock.
[342]
On 16 September 2021, DBF closed at AU$1.590,
0.632% up from the previous close.
[353]
What Next?
[355]
Due to extreme weather conditions in Canada
and Russia, wheat production was impacted.
[360]
Amid these situations it would be exciting
to see how Australia would position itself
[364]
to meet the rising demand of the crop to
[384]
the rest of world.
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