USD gaining strenght
The US dollar strength and a faltering euro have many analysts predicting the two currencies could reach parity this year, meaning one euro = one dollar. Most of the last 20 years, one euro = about 1.22 dollars. The two currencies haven’t had a 1:1 exchange rate since 2002. Even as weak as the dollar was Monday, euro was worth US$1.07, up from 1.056 Sunday night.
Those of us living in the USA know our economy has many problems and the outlook is rather grim for US businesses and wage earners. The strong dollar simply means the world’s money people have more confidence in the US economy than the economy of Europe, which is rather scary if one understands our serious problems.
Roger was in Europe for a while in 2000 when it took $1.21 to buy one euro. Two years later, Roger was there when the ratio was 1:1; compared to 2000, spending US dollars in Europe in 2002 made Americans feel like millionaires.
The dollar has gained an average of 13% this year against all currencies other than the Russian ruble. The stronger dollar will make US products much more expensive to sell abroad and foreign products much cheaper to buy (import).
For exporters of US products, the hope is the rest of the world will believe the dollar’s strength will continue for more than a year and they will buy US products before they need the products to save money on the exchange rate. In 1979, the US dollar value went straight up, yet US corn exports set a record high in 1979 that stood for 26 years.
Biden said yesterday morning he is considering lifting some of Trump’s trade tariffs on Chinese imports. He also said if China attacked Taiwan, the US would come to Taiwan’s aid with military force. That sent July beans from 15 higher to 19 lower, despite the USDA announcing 130,000 mt of old crop beans were sold to Egypt yesterday morning.
Planting Progress Report yesterday afternoon was expected to state 68% of the corn planted (72% actual), 49% of the beans planted (50% actual) and 56% of spring wheat planted (49% actual).
North Dakota farmers intended to plant 3.6 million acres of corn this spring; only 20% is planted. Minnesota farmers intended to plant 7.8 million acres of corn and is 60% planted. Most of those farmers have PP date of May 25th; that is tomorrow. Here is the big picture planting progress: