LNN
Lindsay Corporation
stock NYSE

LNN is the one that gets me. Lindsay's pivots need water to move, and the farms that get hit hardest in a drought are the ones already drawing down the Ogallala, so who exactly is writing the check for a center pivot in a dry year. Irrigation equipment sells on farm capex and crop prices, not on a forecast.

BG is a grain trader, they make money on volatility and logistics, not on dry weather as such. If anything a big El Niño historically means decent US corn and soy yields, which is not the trade you think you're making.

AIs gave you LNN and Bunge because those two dominate the SEO around "El Niño stocks". That's not consensus, that's the same three articles being scraped.

Fair to worry about this one, but LNN is a rough way to play it. Irrigation demand doesn't spike in the drought year, it spikes the year after, when farmers finally have the cash and the reason to spend it. In a bad year capex gets defered and the order book goes quiet right when you'd expect it to explode. BG is a crush margin and trade flow story more than a weather story anyway, and South America tends to get rain in an El Niño year, which cuts against the drought thesis you're buying. The forecast has been public since spring so nobody is early on this.

Most of that trade has already run: Deere +49% this year, Bunge +33%. Bunge still screens cheap to me, about 10x forward earnings and fair value near $150 against $110 today, though free cash flow is negative right now. No view on LNN, it's below what I track in my research

So we've got climate agencies around the world screaming that this year's El Nino is gonna be brutal. Those of you who don't believe in science might want to skip this discussion.
For the smarties, where is the money making trade for the next 6-12 months? I ran the question past a few AIs and got only some consensus.
At the top was LNN. They sell mechanized irrigation systems which are crucial during farm-level drought. BG is another as a pure agribusiness play.
Curious to hear your thoughts.

LNN is the one that gets me. Lindsay's pivots need water to move, and the farms that get hit hardest in a drought are the ones already drawing down the Ogallala, so who exactly is writing the check for a center pivot in a dry year. Irrigation equipment sells on farm capex and crop prices, not on a forecast.

BG is a grain trader, they make money on volatility and logistics, not on dry weather as such. If anything a big El Niño historically means decent US corn and soy yields, which is not the trade you think you're making.

AIs gave you LNN and Bunge because those two dominate the SEO around "El Niño stocks". That's not consensus, that's the same three articles being scraped.

Fair to worry about this one, but LNN is a rough way to play it. Irrigation demand doesn't spike in the drought year, it spikes the year after, when farmers finally have the cash and the reason to spend it. In a bad year capex gets defered and the order book goes quiet right when you'd expect it to explode. BG is a crush margin and trade flow story more than a weather story anyway, and South America tends to get rain in an El Niño year, which cuts against the drought thesis you're buying. The forecast has been public since spring so nobody is early on this.

Most of that trade has already run: Deere +49% this year, Bunge +33%. Bunge still screens cheap to me, about 10x forward earnings and fair value near $150 against $110 today, though free cash flow is negative right now. No view on LNN, it's below what I track in my research

So we've got climate agencies around the world screaming that this year's El Nino is gonna be brutal. Those of you who don't believe in science might want to skip this discussion.
For the smarties, where is the money making trade for the next 6-12 months? I ran the question past a few AIs and got only some consensus.
At the top was LNN. They sell mechanized irrigation systems which are crucial during farm-level drought. BG is another as a pure agribusiness play.
Curious to hear your thoughts.