The Dollar: Add it to Your Watch List

by David A. Widmar

Since 2011 the U.S. dollar has begun to strengthen.  Because exports are a critical component of grain demand, we decided that it would be important to look at how strength in the dollar impacts the prices that foreign buyers of U.S. grain face.

The most recent USDA WASDE projection is for exports to account for 12.9% of corn usage, 48.3% of soybean usage, and 43.8% of wheat usage. There are many different factors that influence exports. In addition to the shipping fees, port charges, fuel surcharges, tariffs, quota, and embargoes, exchange rates can play a critical role and they are sometimes hard to put in perspective.

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