Due to rising agriculture costs, the AAP team has praised deere

Due to rising agriculture costs, the AAP team has praised deere ...

Good comments about agricultural machinery company Deere () - and equipment rental company United Rentals () -.

According to the US Drought Monitor, harvest conditions are a problem; "nearly half (48%) of winter wheat in Colorado was in very poor to poor condition, according to the AAP team. This group also found that one-third of the wheat was found to be in very poor condition in Kansas (31%), Nebraska (27%) and South Dakota (22%).

That "augurs in favor of ag commodity prices remaining at levels that should... stimulate both farmer income and ag equipment expenditure," the AAP team said. "We would not be surprised to see a pull-forward in ag equipment expenditure in the coming months should the Fed 'front-load' its interest rates."

Many investors anticipate that the Federal Reserve would hike interest rates by 50 basis points or more at each of its next two meetings.

TheStreet Recommands.

The AAP team cites the strong Architectural Billings Index for March and positive comments on Nucor () and Steel Dynamics () non-residential construction.

"We see those remarks laying the foundation for an optimistic outlook when United Rental reports its quarterly results later this week," the AAP team said.

Caterpillar () and Terex () are reporting earnings this week. And the AAP team believes that their findings will show confidence in United Rentals.

Dawit Woldemariam, a Morningstar analyst, loves United Rentals too.

United Rentals will continue to be one of the most prominent players in the equipment rental industry, according to a January editorial. As the industry leader, the company provides better equipment availability and reliability than smaller players.

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