Agriculture forecasts lifted, an effective geopolitical hedge – UBS

Agriculture has been affected by the war in Ukraine. Economists at UBS continue to see sector exposure as a hedge against the war in Ukraine and the resulting disruption to supplies.

Prolonged sanctions and disruptions on grain and fertilizer to pressure the sector

“Prolonged sanctions and disruptions on grain and fertilizer volumes will pressure the industry.”

“We have raised our target for corn in anticipation of constrained corn exports from Ukraine in 2Q.”

“We have lifted our end-June forecasts for wheat and soybeans to $10.5/bu and $17.25/bu respectively.”

“The upward revision to our commodity forecasts reflects the risks to supply, which may not be resolved for some time.”

“We think the asset class remains an effective geopolitical hedge for portfolios.”