Hi
@Hopeful9 - just going to advise what happened last time there was a big rain at harvest time on the east coast, it was 6 or 7 years ago.
There was a massive harvest, mainly good quality prime hard wheat (the best you can get) - the big rain effectively downgraded the harvest but the volume was still there. Mostly was downgraded to feed wheat.
Now Graincorp does not own the wheat, only handles it, so whilst the producers took a hit, Graincorp did very well, in handling through export terminals, and there where plenty of buyers.
So it is all about volume, and Graincorp's cream is export tonnage. So whilst it is overall not good for wheat to be downgraded, it will have little impact on Graincorp's bottom line.
Sure Graincorp are also traders, but the ability to be able to blend - and this is important, - the downgraded product with a higher grade, at their own terminals - can allow Graincorp to sell (dispose of) downgraded product - as this can be then blended to say a ASW (Australian Standard Wheat) commodity.
Simple fact is rain = profit.
Looking very rosy - as defensive stock, Graincorp is a no-brainer, as when the full knowledge of the harvest becomes clearer, there will be a significant re-rate to this dividend paying stock.
Norge bank currently trading the channels, we all know this, (and there is significant bot trading going on) it wont be long before others catch on.......can really see this sitting at the $6 level by november.
..oh and dont forget the ff divis
(20min delay)