Hi All, despite my many posts in the past on other stocks, and very occasional ones on Graincorp. Think it is time to add some knowledge.
There are a number of factors in play here.......let's go though them one by one, and i am very happy t take constructive criticism.
Graincorp, although being a global entity, is primarily focused upon East Coat Australia, where they have the supply logistics and more importantly ports.
The rest of the Graincorp business is mainly defensive.
Without doubt the 2021 grain season has been good, but not spectacular
2022 looking be better...traditionally - the second and third year after a drought does provide greater yields
We are in a La Nina weather pattern - very good for the East Coast, not so good for west coast (Thumbs down for CBH)
Global grain - especially hard wheat has now become poor..the great hope -Argentina, has not eventuated. North America (elastically the west coast) that supplies Asia is dismal.
Foodstuffs are the new bitcoin, the only difference being, foodstuffs are real.
Commodity prices, as are shipping prices, increasing to an 'auction level' Graincorp operate on both platforms.
The Ports are struggling to keep up with supply. This is the one downside, but in the supply and demand at ports, does tend to even out, ad consistency between supply end export usually works in the end.
The only other downside is that during the drought years, many of the experienced and knowledgeable staff were let go, to be replaced by 'bright young things' that had plenty of 'paper accomplishments' but very little in practical experience.
There will be an overall efficiency drop, but saying this not overly relevant- Global circumstances now are making foodstuffs - and what makes those are heading towards a boom.
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