Which agricultural stocks are best
positioned for the 2025 harvest?

Rural returns

In this week's edition of IG Macro Intelligence, we take a deep dive into the Australian agricultural sector and stocks to watch.

Fertile grounds

The upcoming winter crop season could be Australia's best on record, thanks to strong soil moisture in northern New South Wales and Queensland, and solid profit margins across most crop types.

Rabobank's Winter Crop Outlook suggests Aussie farmers are on track to plant a record 24.5 million hectares of winter crops in 2025/26, up 0.8% year-on-year, and more than 2% above the five-year average.

Rabobank’s winter crop outlook 

Planting is expected to rise in every state except South Australia, where drought is limiting expansion. Western Victoria is also facing dry conditions, though a slight increase in cropping area is still expected there. The projected increase is set to benefit most crops, however Rabobank expects a modest decline in grain volumes.

Meanwhile, the broader outlook for the agricultural sector has been clouded by US tariffs.

The Trump Administration introduced a 10% baseline tariffs on most imported goods, including Australian agricultural products, in April. Some industry leaders have argued that the tariffs breach longstanding trade agreements and could harm both Australian producers and American consumers.

Rabobank senior analyst Vitor Pistoia suggests Australian growers can weather the tariff storm by exporting to other countries, particularly in Asia.

"Despite the US's tariff-driven efforts to re-order global trade, Australia's key grain and oilseeds exports seem largely unscathed for now and may gain global market share," said Rabobank Analyst Vitor Pistoia.

Paddock to portfolio

GrainCorp (GNC)

GrainCorp recently beat the street with its 1H update, announcing a special dividend and increasing its share buyback.

UBS increased its price target on the stock following the result to $8.60 from $8.50, and maintained its buy recommendation, also suggesting GrainCorp has resilience amidst the "trade war backdrop", which the brokerage thinks could help increase its FY26 earnings per share (EPS) by 11%.

GrainCorp H1 update

CEO Robert Spurway told ausbiz, the company is well positioned to manage any trade war challenges:

"People always need to eat. So the fundamentals of supply and demand really drive the trade flows and the volume of food exported around the world. Of course, volatility and uncertainty in a tariff environment can be concerning because it does impact economies and can create recessionary drivers and environments. But again, food is very resilient in that environment.

What I'd say is that GrainCorp and the egg sector generally have decades of experience managing tariffs and non-tariff barriers, and overcoming those and finding other markets through diversification. Well before it was in the headlines every day... so we've been doing a good job in that respect."

GrainCorp daily chart

Most analysts are positive on the stock's outlook, with the average price target $8.82 according to Refinitiv, suggesting a further 18% gain from current levels.

ASX Tradewatch data meanwhile, show shares in a long-term bearish trend, albeit with some rallies occurring in shorter timeframes. This is a bullish sign, suggesting investors see opportunity in accumulating GrainCorp.

GrainCorp historical trends and price targets

Elders (ELD)

Rival Elders reports 1H earnings on 26 May. Its 20% share price drop over the past 12 months is roughly double the loss GrainCorp shareholders have experienced.

ASX Tradewatch technical data show shares in a weak pattern, with little demand from investors. The 200-day moving average (MA)  is sloping downwards.

Elders daily chart

However, the average broker is upbeat on the stock, with Refinitiv data showing a median price target of $8.65, suggesting Elders can rally another 33% from current levels.

Elders historical trends and price targets

Bell Potter recently cut its target price to $9.10 from $9.40, but has maintained a buy recommendation. Morgans is most bullish on the stock, with a $9.52 price target.

Elders buy/sell indicators and analyst projections

 Australian Agricultural Company (AAC)

When it comes to Australian Agricultural Company, shares have risen around 2.5% over the past 12 months, around half the near 5% gain on the ASX 200 Consumer Staples Index over that time period.

ASX 200 consumer staples index 

Similarly, technical data show shares are in a long-term bullish pattern according to multiple indicators. The average price recommendation on the stock is a buy with a price target of $1.95, suggesting a further 35% upside.

Australian Agricultural Company historical trends and price targets

Still, some analysts suggest caution when it comes to investing in the agricultural space:

"The trouble with agriculture companies is no matter how brilliant the management is, you are really totally dependent on the weather and on international commodity prices, which are partly dictated by the weather. So, you know, from an investor point of view, how do you really invest in these companies? You can't... you can perhaps trade in them, but you really can't invest, because if you say to yourself, can I be confident? Earnings per share will be higher in five years time. You have absolutely no idea whether they will or won't," said Howard Coleman from Team Invest.

Harvesting gains

Australian government data show 2025-26 production values for grains and oilseeds remain high at $24.1 billion, with above export values being driven by higher exportable supply.

And GrainCorp CEO Robert Spurway is confident of harvesting further gains.

"We advocate for free and fair trade and open access. But even notwithstanding that, in the volatile environment we find at the moment, GrainCorp is in a very resilient sector and well-placed to manage the challenges."

Grain and oilseed 2025-26 production values