Weak U.S. Dollar benefits some agriculture commodities, but not all

Published 2021년 3월 1일

Tridge summary

The U.S. dollar's weakness since March 2020 and expected modest deflation in 2021 could make U.S. agricultural products more competitive globally. However, the impact on different commodities varies. CoBank's Knowledge Exchange reports that U.S. agricultural exports, especially animal protein, grain, oilseeds, dairy, and tree nuts, are expected to continue to grow in 2021. However, factors like tariffs and weather conditions can override currency effects. The report also highlights that currency trends could create opportunities and challenges for specific exports, such as dairy into Japan and Australia, and U.S. tree nuts into Southeast Asia, but could also hinder U.S. cotton exports to China, Vietnam, and Pakistan due to Brazil's expected currency weakness.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The value of the U.S. dollar weakened substantially since March 2020 and is expected to experience modest deflation in 2021. A weaker dollar generally makes U.S. agricultural products more competitive on the global export market. However, not all commodities are affected equally given the diversity in global export competition and foreign exchange rates. Fundamental factors like tariffs and weather conditions in key agricultural producing regions often dominate market dynamics despite currency headwinds or tailwinds and should not be discounted, according to a new report from CoBank’s Knowledge Exchange. “U.S. agricultural exports are largely expected to continue a faster pace in 2021 with help from weakness in the U.S. dollar,” said Tanner Ehmke, manager of CoBank’s Knowledge Exchange. “But our research indicates that some agricultural commodities like grains, oilseeds, and cotton will face a currency headwind.” CoBank’s estimates on commodity-specific trade weighted balances ...

Source: Hellenic Shipping News