Five Grain Investments to Buy for Income Amid Famine, Inflation

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Five grain investments to buy for income provide opportunities to guard against rising famine risks and inflation.

The critical role of the five grain investments to buy for income and potential profitability gained global attention this week at the United Nations Security Council when European Council President Charles Michel accused Russia of causing a food crisis by stealing and blocking shipment of Ukrainian grain. Russia’s UN ambassador Vassily Nebenzia stormed out of the UN Security Council meeting rather than respond point by point to the evidence cited by Michel or commit to unconditional support for food transport.

Roughly 140 million undernourished people who live in needy nations are most vulnerable to the policies of Russia’s President Vladimir Putin, who ordered his troops to invade neighboring Ukraine on Feb. 24 in violation of international law to pursue what he called a “special military operation.” Russia’s sustained attack has resulted in shelling of hospitals, schools, residential areas, churches, nuclear power plants, oil refineries and a theater used as a shelter, amid reports of his soldiers raping, torturing and executing Ukrainian civilians.

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Five Grain Investments to Buy for Income and Protection from Famine, Inflation, War

Putin has refused to withdraw Russin troops from Ukraine despite economic sanctions placed on him and his country as pressure to do so. Before allowing the export of grain to resume, Putin is insisting that the economic sanctions end.

As Russia’s UN ambassador Nebenzia left the Security Council meeting last Monday, June 6, Michel said Russia’s ambassador may not want to hear the truth about its numerous humanitarian offenses. Those acts include allegations of thousands of war crimes that a Ukrainian prosecutor has been documenting.

The 27-nation European Union (EU) voted on Tuesday, May 31, to remove 90% of its Russian crude oil imports in 2022 to limit funds that could be used to sustain the nation’s ongoing military action in Ukraine. Subsequently, reports have arisen that cholera, a bacterial infection that spreads through contaminated food and water, has been contracted by people still in the port city of Mariupol.

Plus, more than 1.1 Ukrainian, including children, have forcibly been moved to Russia. Additional reports indicate 600 people have been detained in and around Kherson, Ukraine, where they are held in “specially equipped basements that basically serve as torture chambers,” according to the Washington Examiner.

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Putin’s Policies Blamed for Blocking Grain Distribution and Worsening Famines

“The EU has no sanctions on the agricultural sector — zero,” Michel said in his speech at UN headquarters in New York. “And even our sanctions on the Russian transport sector do not go beyond our EU borders.”

The sanctions do not prevent Russian-flagged vessels from carrying grain, other food or fertilizers to developing countries, Michel continued. He also spoke out against sexual violence and other war atrocities reportedly committed by Russian forces in Ukraine.

Western leaders have urged their Russian counterparts to open ports and shipping corridors in the Black Sea to allow the transport of millions of tons of grain grown in Ukraine, a major agricultural producer. Russia has used its military might to capture important port cities such as Mariupol and Kherson, while also imposing a blockade on Ukraine’s imports and exports.

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Putin Accused of ‘Weaponizing Food Supplies,’ Causing Prices to Rise with Blockade

European Commission President von der Leyen cautioned that Russia is weaponizing food supplies as prices of grain, cooking oil and other food commodities climbed after Putin ordered the invasion of Ukraine, one of the world’s largest wheat producers. In the industrial part of Ukraine that Russia is occupying and attacking to seize land, Putin’s army is confiscating grain stocks and machinery, she said during a May 24 address at the World Economic Forum in Davos, Switzerland.

“When war is waged, people go hungry,” said UN Secretary‑General António Guterres at a May 19 Security Council open debate on conflict and food security, adding that 60% of the world’s 140 million undernourished people live in areas affected by conflict.

Ukraine normally provides food for 400 million people, said David Beasley, executive director of the UN World Food Programme, at the same May 19 Security Council event. The United Nations is trying to provide humanitarian assistance inside Ukraine, but its ports need to operate for 36 countries to import more than 50% of their grain from that region, he added.

For example, Ukraine and the Russian Federation had been exporting 67% of the world’s sunflower oil, according to the UN. In 2021, Ukraine itself exported more than $27 billion in agricultural products to the world.

Eagle Bulk Shipping Leads Five Food Supply Investments to Buy

Eagle Bulk Shipping Inc. (NASDAQ: EGLE) recently became a recommendation in the Fast Money Alert advisory service co-led by Mark Skousen, PhD, and Jim Woods. They described the company as a “fast-money” shipping stock that is breaking out to new highs.

The company operates in the shipping and logistics industry and is engaged in the ocean transportation of dry bulk cargoes through the ownership, charter and operation of dry bulk vessels. Eagle Bulk Shipping’s fleet is comprised of Supramax and Ultramax bulk carriers.

Eagle’s services include commercial operations and technical supervision, vessel maintenance and repair, vessel acquisition and sale, finance, accounting, treasury and information technology services and legal, compliance and insurance. It transports a broad range of major and minor bulk cargoes, including grain, coal, ore, pet coke, cement and fertilizer.

Paul Dykewicz meets with Jim Woods, leader of the Successful Investing and Intelligence Report newsletters, plus High Velocity Options and Bullseye Stock Trader.

Improved Delivery Can Aid Five Grain Investments to Buy for Income

With optimism that supply chain issues will be resolved in the months ahead, the world should return to demanding more and more goods and services, Skousen and Woods wrote to their subscribers. Those goods are transported by big cargo ships such as those operated by EGLE.

“That business has been fantastic of late, with the company growing its earnings per share (EPS) some 396% in its most recent quarter vs. the same quarter last year,” they reported in Fast Money Alert.

That move higher in earnings has resulted in a jump in EGLE’s share price so far in 2022. Yet, EGLE may not be overextended.

However, the company’s Chief Financial Officer Frank De Costanzo sold 3,022 shares of his Eagle Bulk Shipping stock in a transaction dated Monday, June 6, according to a filing with the Securities and Exchange Commission. The shares reportedly were sold at an average price of $78.06, for a total value of $235,897.32. Upon completion of the sale, he directly owned 52,323 shares valued at $4,084,333.38.

Bargain-conscious investors may appreciate that the stock has pulled back more than $14 per share since its high of $77.77 on June 7, in a possible overaction the CFO’s sale of a minority stake of his holdings. The stock has fallen 11.28% in the past week, but risen 12.54% in the past month, 7.96% in the last three months, 50.24% so far this year and 48.94% during the past 12 months.

Chart courtesy of www.stockcharts.com

Skousen, who leads the Forecasts & Strategies investment newsletter and the TNT Trader, Five Star TraderHome Run Trader and Fast Money Alert advisory services, is a prominent free-market economist who favors dividend stocks such as Eagle Bulk Shipping. The stock’s 12.6% dividend yield stands out as the latest Consumer Price Index released on Friday, June 10, showed inflation through May 2022 had soared 8.6% during the last 12 months, before seasonal adjustments.

The CPI in May 2022 climbed 1.0%, when seasonally adjusted, while all items other than food and energy increased 0.6% in that month to equal a 6.0% annual rise. The biggest contributors to the surge in the broad-based index were shelter, gasoline and food. The energy index jumped 3.9% in May, despite dipping in April, with the gasoline index leaping 4.1% last month. The food index increased 1.2% in May, while the food at home index gained 1.4%.

Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.

Five Grain Investments to Buy for Income Include MOO

Another food supply investment to buy is ETF VanEck Agribusiness (NYSE ARCA: MOO). I bought shares in the fund years ago to tap the growing need for food from a finite supply of land that increasingly is used for development.

Bob Carlson, a pension fund manager who also leads the Retirement Watch investment newsletter, recommends the fund to track the MVIS Global Agribusiness Index. The index is composed of companies that produce at least 50% of their revenues from agrichemicals, animal health and fertilizers, seeds and traits, farm/irrigation equipment, farm machinery, aquaculture, fishing, livestock and more.

Bob Carlson, who leads Retirement Watch, meets with Paul Dykewicz.

MOO’s largest holdings recently included Deere & Co. (NYSE: DE), Nutrien (NYSE: NTR), Bayer (OTCMKTS: BAYRY), Zoetis (NYSE: ZTS) and Archer-Daniels Midland (NYSE: ADM). The ETF owns more than 50 stocks and has nearly 60% of its holdings in the 10 largest positions.

Chart courtesy of www.stockcharts.com

Fertilizer Stocks Are Among Five Grain Investments to Buy for Income

Both funds favored by Carlson also are recommended by Bryan Perry, who heads the Cash Machine investment newsletter, as well as the Premium IncomeQuick Income TraderHi-Tech Trader and Breakout Options Alert advisory services. Perry also likes fertilizer manufacturers as investments.

Such companies are likely to profit from Russia’s attack against Ukraine, a major agricultural producer, Perry said. “Demand destruction” may occur in energy markets but not reduce the need for food, he added.

Paul Dykewicz interviews Wall Street veteran Bryan Perry, who heads the Cash Machine newsletter.

CF Industries Listed Among Five Grain Investments to Buy for Income

Wheat, corn and soybean prices jumped after Russia attacked of Ukraine, Perry continued. One of the big winners from pure demand and sanctions will be CF Industries Holdings, Inc. (NYSE: CF), a manufacturer and distributor of agricultural fertilizers that include ammonia. The company, based in the Chicago suburb of Deerfield, Illinois, is incurring increased distribution costs, particularly for transportation.

In addition, the cost of producing nitrogen fertilizers is highly dependent on the price of natural gas, a principal raw material and primary fuel source used in ammonia production at the company’s manufacturing facilities. For many producers, more than 70% of the total cost to produce ammonia is due to the cost of natural gas.

The cost of natural gas varies significantly between geographic locations. For example, European customers are seeing their fertilizer prices rise significantly.

Chart courtesy of www.stockcharts.com

Five Grain Investments to Buy for Income Include Nutrien

Nutrien Ltd. (NYSE: NTR), a Canadian fertilizer company based in Saskatoon, Saskatchewan, is the largest producer of potash and the third-largest provider of nitrogen fertilizer in the world. The company’s interim chief executive Ken Seitz said Nutrien will boost potash production if supply problems worsen in Russia and Belarus, the world’s second- and third-largest potash-producing countries, respectively, after Canada.

The economic sanctions imposed by the United States, the EU and others against Russia may hurt the warring country’s exports of natural gas, potash and nitrogen. Belarus, regarded widely as a puppet state of Russia, has joined the invasion of Ukraine and must adjust to economic sanctions that have restricted its potash exports, Perry said.

The decision by Putin to wage war against Ukraine further has raised concerns about wheat, corn and vegetable oil supply problems in the Black Sea region. The result is sharply rising world prices for these agricultural products.

Chart courtesy of www.stockcharts.com

REIT Ranks Among Five Grain Investments to Buy for Income

Real estate investment trusts (REITs) that focus on distribution centers benefit from food inflation, said Michelle Connell, a former portfolio manager who heads Dallas-based Portia Capital Management. One of the largest customers of distribution and industrial centers are the food and beverage industries, she added.

Michelle Connell, CEO, Portia Capital Management

The use of multiple distribution centers reduces shipping costs for food and beverage companies. For example, a beverage business that does business on the West Coast and the East Coast benefits from having nearby distribution centers. Shipping from a close distribution center to a retail facility reins in costs.

Connell said her top choice for a REIT engaged in storage and warehousing is Boston-based Stag Industrial Inc. (NYSE: STAG). Distribution centers became more imperative during the pandemic due to the switch from bricks and mortar to online shopping, she added.

“The demand for distribution centers is expected to continue to grow,” Connell continued. “While e-commerce sales have grown 167% in the past five years, they are expected to grow another 50% in the next five years.”

Chart courtesy of www.stockcharts.com

World Health Organization Recommends Further Investigation into Origin of COVID-19

The World Health Organization (WHO) announced on Friday, June 10, that it is recommends investigation of the theory that COVID-19 leaked from a laboratory in Wuhan, China, to trigger the global pandemic. Initially, WHO discounted such a possibility, but it subsequently has shifted its position to consider a further probe into the origin of the virus.

In addition, the U.S. government is taking an action that could boost tourism and give the American economy a bit of a boost by announcing it no longer will require visitors to present a negative COVID test at points of entry. The Centers for Disease Control and Prevention (CDC) announced the policy change on Friday, June 10, and planned to put it into action on Sunday, June 12. European countries previously had abandoned that requirement.

Food and Drug Administration (FDA) advisors agreed Tuesday, June 7, to recommend a more traditional type of shot as a potential fourth vaccine choice. The FDA next would need to decide whether to approve the protein vaccine of Gaithersburg, Maryland-based Novavax (NASDAQ: NVAC).

COVID-19 vaccines from Novavax already are available in Australia, Canada and parts of Europe, as well as other countries. Its vaccines can be used either for initial doses or booster shots.

Pfizer (NYSE: PFE), Moderna (NASDAQ: MRNA) and a lesser-used vaccine from Johnson & Johnson (NYSE: JNJ) already are approved for use of their respective versions in America.

Increased U.S. vaccinations should be good for the American economy, businesses, consumers and workers. The restrictions of the past before vaccines became widely available in the United States led many businesses to go out of business and put their employees out of work.

Supply Chains Should Recover as China Scales back COVID-19 Curbs

China’s economic center of Shanghai is trying to rebound economically after easing its two-month lockdown to prevent the spread of COVID-19. Supply chains that had been disrupted now are starting to normalize again but further progress is needed. China’s lockdowns have affected an estimated 373 million people, including roughly 40% of the country’s gross domestic product (GDP).

Disrupted supply chains hurt shipping of products such as rice, oil and natural gas. Shanghai, home to 25 million residents and the world’s largest port, has strained to unload cargo due to strict regulations that have caused shipping containers to stack up. Some Shanghai residents posted videos online that went viral to complain about a lack of food during the lockdown.

U.S. COVID Deaths Top 1.01 Million and Keep Climbing

U.S. COVID-19 deaths rose to 1,011,012 as of Friday, June 10, according to Johns Hopkins University. Cases in the United States jumped to 85,424,469, as of June 10. America retains the dreaded distinction as the country with the highest numbers of COVID-19 deaths and cases.

COVID-19 deaths worldwide totaled 6,307,617 on June 10, according to Johns Hopkins. Cases across the globe have grown more than 1 million in the past few days to hit 534,607,728.

Roughly 78% of the U.S. population, or 258,896,220, have obtained at least one dose of a COVID-19 vaccine, as of June 10, the CDC reported. Fully vaccinated people total 221,640,799, or 66.8%, of America’s population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to 104.3 million people, up more than 300,000 in the past three days.

The five grain investments to buy for income also can help investors to profit from capital appreciation, aside from offering dividend payouts. With the highest inflation in more than 40 years, the Fed’s plan for further interest rate boosts to limit price hikes, rising federal deficits and Russia’s persistent attacks on Ukraine, these five grain investments to buy for income offer much better near-term prospects than the stock market overall.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

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