2001 Currency Values, US Wht up hard

[TOM4CWB]

Charlie,

I noticed on the US Wheat Associates web site this info;

5 year ago currency values:

Arg. 209%
Aus. -30%
Brazil -4%
CA. -26%
Egypt 48.5%
E.U. -32%
Japan -6.7%

http://www.uswheat.org/priceReports/doc

Highlights
Continued dry weather in the Northern Plains brought HRS conditions down for the fifth straight week, sending the hard milling wheat markets much higher. Minneapolis futures market up 32 cents/bushel from last week, KCBOT up 20 cents
SRW nearby basis up on Indian purchase of Canadian SRW, decreasing North American supplies. Still a large carry in both basis and futures, October cash at $4.50/bushel
Soft white at a 17 cent/bushel price advantage over SRW
Barge and ocean freight much stronger this week. Low water levels in the rivers pushed barge prices up on the Ohio by 22% and the Mississippi 9 to 12% from last week. Difficulty sourcing vessels in the Gulf has rates up $3, Gulf to Egypt up $5
Interest rate rise to 5.25% yesterday took the dollar up against most currencies, especially the yen, euro and Argentine peso

[TOM4CWB]

Charlie,

I see the Russians are lifting some restrictions on the trade of the Ruble.

In 1998, before Russia's financial collapse and debt default, the rate was just over 6 rubles to a U.S. dollar. By 2002, the ruble had plunged to more than 32 rubles to the dollar.

At current exchange rates, it takes about 27 rubles to buy a dollar.

This means that the Russian grain farmer still can be profitable... if they don't buy inputs from other countries.

What about the Ukraine?

[wd9]

TOM4CWB, if the hot weather continues in Canada, we will be in the same predicament as the US. We are a loooong way from the bin yet. Env Can was and still is predicting a long hot dry summer!

[silverback]

Praying that the taps are not shut off just yet. Lots of heads to fill.

One year in 20 would be nice.

Mother Nature can sure make ya wonder.

[charliep]

Tom4cwb

Still a long ways to go before they are up to western standards. Ukraine (for the most part) is still using 1960's technology that they are somehow keeping running. Interest rates vary from 18 % (heard some as low as 15 % for best customers) to 48 % for subsistence farmers. A couple of provinces reported 70 % of reformed state farms (still operate like in old communist days) lost money last year. Private farms would not likely be much different.

The Ukraine currency is pegged to the US dollar. It was 5.3 Hrievna/US green in 2004 and about 5.07 this spring.

Land ownership reform and free market thinking are what are needed in the Ukraine but the political will isn't there to do this yet. The new coalition government is likely (not guaranteed) to make some progress down this road.

Likely told this story before so will seek apologies if I have. One of my acitivities while in the Ukraine was to investigate ****seed/biodiesel potential for Europe. When talking to farmers, I heard a multitude of reasons why ****seed/canola acres wouldn't increase (lack experience, no/costly inputs, agronomics, poor seeding/harvesting equipment, etc). A research farm in the NW of the Ukraine (with application of European technology) achieved 5 tonnes/hectare (90 bu/acre).

I note that farming is a struggle in all parts of the world. No one has mentioned the financial crisis in Brazil agriculture this past year as a result of their smaller crops/currency re-alignment.

[wedino]

Don't worry, Silverback, The cwb on June 15th claims we have a bumper crop. If the cwb says it it must be so.

[URL="http://www.cwb.ca/public/en/news/releases/2006/061506.jsp"][/URL]

[silverback]

Well that is just great of them to say that, hope they are making some sales at the world prices these days.

[TOM4CWB]

Charlie;

I noted "Brazil -4%" over 5 years;

It seems to me the growers in Brazil are better off than:

EU (-32), AU(-30) and CA(-26) growers have had the profit margin taken out with the extra 20% plus taken out grain prices because of currency appreciation... over the last 5 years.