If the price of wheat on US futures goes up and our CDN $ goes up up the same time, the price of wheat in Canadian dollars per bushel in my pocket may be the exact same. So a huge rally in grains, may not mean any more money in my pocket, unless the currency risk is accounted for. I am not a trader, so I am wondering how big of a risk the change in the dollar really is in everyones eyes.
I an in the business of hopefully selling more product than buying, so the dropping US dollar is of a major concern to me. Part of the reason that historic farm payments have been so high in the US is because their dollar was so strong that it hurt the farmers income substantially. If we were to take a CDN $ at par or 5% above a US dollar it would hurt canadian farmers big time, unless there was such a huge shortage of food that prices finally rise like the oil does. Food prices need a major shortage scare to make people want to price it ahead more than now. I don't know that anyone in the world actually ran out of gas or oil in the latest rally's but the perception that they might has sure caused the price to climb. Shrink these grain inventories even more and hopefully we will see some fun times in agriculture.
I an in the business of hopefully selling more product than buying, so the dropping US dollar is of a major concern to me. Part of the reason that historic farm payments have been so high in the US is because their dollar was so strong that it hurt the farmers income substantially. If we were to take a CDN $ at par or 5% above a US dollar it would hurt canadian farmers big time, unless there was such a huge shortage of food that prices finally rise like the oil does. Food prices need a major shortage scare to make people want to price it ahead more than now. I don't know that anyone in the world actually ran out of gas or oil in the latest rally's but the perception that they might has sure caused the price to climb. Shrink these grain inventories even more and hopefully we will see some fun times in agriculture.
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