Loonie Hedging Strategy

[charliep]

Any thoughts on what farm managers should be doing for a Canadian dollar risk management strategy? We have come off substantially from the 85 loonie. Is this the sign of more declines or an opportunity to hedge? What tool? Buy calls? Sell puts? What is the risk/impact on your business?

[crusher]

My strategy is to buy the March at 7950 after it fills the gap left in mid October. It just filled the gap next to it and maybe it has some more weakness. This would be a 62% retracement of the advance from mid September. Long term, I think the trend is up.
I'm a little light on strategies for 2005/6, but I think it will include a serious look at government programs. Although I must remember not to plan for next year based on what happened this year. The carryover numbers are really ugly, especially canola. I think we will be buying November futures or calls and keeping our acres down - might lose less that way!

[boone]

My banks international market group has pegged CDN $ for June at .76c if they are right it will balance the carry on Canola, if they are wrong they'll be about average. They maybe a couple low, we'll see.