Canadian Dollar Thoughts

[charliep]

Tom4cwb highlighted some of the recent wheat forecasts. Before I reply, I thought I might get peoples thoughts on the loonie. From some of the forecasting I have done/assumptions used in other prognostications, this is a key factor

Where do you think the dollar will trade over the next year? What factors should be followed? Any thought on hedging strategies?

My assumption is that we are in a new higher trading range (US 64.5 to 67 cents/loonie verus 62 to 64 over the past year). The bank economist at farm tech suggested a 67 cent dollar.

[wedino]

I think we'll see .67US & perhaps more. The fact that the US green back is dropping on world market should add strenght to the loonie. My 2 cents FWIW.

[TOM4CWB]

Charlie;

The USA is causing a real problem with their currency, but;

I am not sure how much of an issue it really is...

As the US Dollar depreciates, the US grain prices also rise at the same time, because of the falling US dollar.

Therefore since we price our wheat off the US dollar, the end value is unlikely to change significantly...



Does this make any sense?

[crusher]

I watch and trade the Cnd $ when appropriate, to cover my percentage of grain sales that go for export. Currently looking at buying May Cnd $ at 50% retracement off latest high. I agree with Tom about the effect the dropping US $ will help with N. Am. grain exports, this is just a little extra to protect the bottom line. Aside- looks like US wheat may be breaking out of its downtrend, but canola charts are sure ugly.

[rodbradshaw]

With the Chretien government announcing their budget on Tuesday, it sounds as though they are going to spend the whole wad of our so called surplus and fall back into the reason that our dollar trades in the low-mid sixties.

The Canadian Peso will have a hard time getting to that 67 cent range and even if it does are we all that bad off in the long run as most of our products that we buy are priced relative to the American dollar.