Agribusiness Investing: Is the Pullback for Real?
Commodities were stopped in their tracks on Monday as several headlines made investors question themselves. Although agriculture (NYSE:RJA) stocks have been rising sharply with quantitative easing and reduced supply, they weren’t immune to the overall pullback seen today.
Goldman Sachs (NYSE:GS) announced they are closing their top trades for 2011, which include Platinum, Oil (NYSE:USO), Copper (NYSE:FCX), Cotton (NYSE:BAL), and Soybeans. Naturally, this helped a selloff across the entire agriculture landscape.
Shares in the Agriculture Double Long ETN (NYSE:DAG) closed down 1.42% on Monday. The ingredients of this index contain equal amounts of corn, wheat, soybean, and sugar.
The Elements MLCX Grains Index ETN (NYSE:GRU) also closed lower on Monday, and is extending the decline in late trading as shares are down 2.5% after the bell. However, in the past month alone, shares have gained 10%.
Even though most ag names saw a pullback on Monday, Monsanto (NYSE:MON) went against the grain. The company received an upgrade from Deutsche Bank, from a hold to a buy. Deutsche Bank (NYSE:DB) also issued a price target of $78 for the stock, which would represent a 16% gain. Shares traded up on the good news to close 1.43% higher.
Goldman (NYSE:GS) may have caused a decline in commodities, but the company seems to have a sweet tooth for chocolate. Goldman upgraded its position from neutral to hold for chocolate giant Hershey (NYSE:HSY).
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Disclosure: No positions.