$MOO – An interesting play on agriculture/fertilizer


The Vaneck Vectors Agribusiness ETF is a fund that holds positions in *Deere & Co, Bayer AG, Nutrien and several other big name agribusiness suppliers, manufacturers and processors. $MOO has been on an upward trajectory for 5 years and has seen nearly 9% growth over the last 3 months. Overall, the ETF is considered a *safe investment to keep in your portfolio for long term prospects. Recent volatile movement in the ETF has been mainly attributed to rising inflation, agricultural foods, fertilizers and the cost of distribution due to sharply rising oil prices.

As we all know, inflation is here to stay with the fed expecting more rate hikes this year. It's obvious that with inflation, businesses have no choice but to pad their profits and raise prices. We're experiencing this right now in the US and across the world.

The three largest holdings in the portfolio of $MOO is Deere, Bayer AG and Nutrien as mentioned earlier. Nutrien ($NTR) is the largest producer of potash and the third largest producer of nitrogen fertilizer in the world. Bayer AG ($BAYRY) is one of the largest pharmaceutical companies in the world and has extensive outreach in agricultural chemicals, seeds and biotech products. Overall, the $MOO ETF has around 1.2 billion in assets.

One of the most important things to mention in this post is that UAN 38 and UAN 32 has moved over 140% and 144%, respectively, since last year (nitrogen fertilizers). Potash has risen just over 100%. Fertilizers alone are highly impacted by the Russia-Ukraine war fiasco in which Russia exports account for 18% of the world's potash market, 20% of ammonia sales and 15% of urea. Oh, and just a reminder… Fertilizer has been sanctioned as an export from Russia. These numbers give a direct reason to be invested in the space, at least for the next several months.

If you're looking to make a play on the everrising prices of fertilizer and different commodities in the agribusiness sector then I'd love for you to do your own DD on $MOO. Options Implied Volatility is super low, even months out, while non-ETF focused stocks in the agribusiness sector are seeing insanely high IVs – and this means that $MOO is a play you can actually get in early on before volume starts taking over.

Holding May 20th $120 Calls and $110 Calls on $MOO

submitted by /u/RetardHereFolks
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