T
US Wheat Sensitivity Index

USWH

Index Performance

+0.02%
USWH
+6.88%
SPY

Overview

Description

Rising or falling wheat prices can significantly impact the earnings of companies whose operations are closely tied to this commodity. Wheat, being a staple ingredient in various food items such as bread, pasta, and cereal, has its pricing influenced by several factors: global supply and demand dynamics, climate conditions affecting crop yields, geopolitical issues that can disrupt supply chains, trade policies, and currency fluctuations since wheat is often traded in US dollars. Companies in the sectors of agriculture, food processing, and consumer goods particularly feel this impact, as higher wheat prices can squeeze margins unless they are passed on to consumers. However, the ability to pass on costs can be limited by consumer price sensitivity, competition, and longer-term supply contracts, which can delay the reflection of price changes in company earnings. Furthermore, futures contracts and hedging strategies can also mitigate the immediate impact of wheat price volatility on earnings, but these effects are often temporary and can lead to significant earnings surprises if not managed effectively. Within this theme, several investable subcategories emerge, including [[Agriculture Companies that Specialize in Wheat Production]], which would encompass those directly involved in the cultivation and initial sale of wheat. [[Flour Milling Companies]], which process wheat into flour, represent another subcategory sensitive to wheat price fluctuations. Additionally, [[Packaged Foods and Meats Companies]], which use wheat as a primary input for their products, could see their cost of goods sold and hence earnings influenced by changes in wheat prices. Furthermore, [[Bakery Product Manufacturing]], [[Breakfast Cereal Manufacturing]], and [[Pasta Product Manufacturing]] are specific sectors where wheat is a key ingredient and thus could be considerably affected. Lastly, [[Agricultural Inputs and Services Companies]] offering seeds, fertilizers, and technology to enhance wheat production can experience indirect impacts on their business volumes and pricing power as wheat price changes ripple through the agriculture economy. Each of these subcategories encapsulates players that have varying degrees of exposure to wheat prices and, consequentially, different risk profiles related to this commodity's pricing volatility. This index was generated with help from Thematic Analyst.

  • TickerUSWH
  • Inception Date12/07/2023
  • WeightingEqual
  • # of holdings13
What's inside?

Holdings

All holdings as of April 15, 2024
CSV download
Tyson Foods, Inc. (TSN)8.18%$16.64B0.44%6.24%0.51
Archer-Daniels-Midland Co. (ADM)8.07%$30.86B-7.51%6.69%0.46
AGCO Corp. (AGCO)8.02%$8.81B13.92%25.93%0.70
Flowers Foods, Inc. (FLO)7.98%$4.84B5.93%45.27%1.20
General Mills, Inc. (GIS)7.97%$38.01B-0.52%32.98%2.46
Post Holdings, Inc. (POST)7.72%$6.13B25.51%27.26%1.64
Universal Corp. (UVV)7.68%$1.21B3.33%20.06%1.00
The Mosaic Co. (MOS)7.67%$9.96B-28.39%16.33%1.15
Art's-Way Manufacturing Co., Inc. (ARTW)7.64%$10.09M-27.50%22.94%0.62
Trimble, Inc. (TRMB)7.57%$14.60B3.33%58.68%4.28
Amcor Plc (AMCR)7.55%$12.92B-10.73%19.13%1.50
Sealed Air Corp. (SEE)7.05%$4.63B-2.71%28.68%1.77
FMC Corp. (FMC)6.90%$7.08B-22.67%42.53%2.62
Market data by FactSet

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