JC am speaking from an Australian point of view. Our currency is killing our returns no doubt about it but we have also just come off historic US future low prices. The hedge funds were into wheat futures two weeks ago because they saw an opportunity to profit from wheat prices that, with the oil price impact on growing costs and these are significant, were essentially below the cost of production for any country unless their currency was an absolute basketcase. Mind you the US dollar is not far from that classification. But regardless of US futures prices and the currency valuations, we are still left with a massive problem as a result of rising oil prices! It is knocking cream off our bottom line left right and centre. Fertilizer, herbicides, diesel, freight, contracting rates (cos they got rising costs too), machinery (even with a rising dollar, oil is wiping that benefit too!). So if the Aussie dollar were to depreciate we would then have the problem of even more expensive input costs and fuel costs! The only thing that can turn the situation around is a significant rise in commodity values, as has happened in the mining industry. I mean the iron ore industry would have massive costs of production rises but a nice healthy ore price is more than covering for that negative.
