We kicked off the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Durable Goods Orders MoM, Durable Goods Orders Ex Transportation MoM, Durable Goods Orders ex Defense MoM, and Non Defense Goods Orders Ex Air at 7:30 A.M., Hed Kashkari Speech at 8:00 A.M., Fed Musalem Speech at 8:05 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction and 2-FRN Auction at 10:30 A.M., 5-Year Noye Auction at 12:00 P.M., Dairy Products Sales at 2:00 P.M.

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US food price inflation reached a 43-year high in 2022, at 9,9%, following historic spending in 2020 and 2021.The inflation rate relaxed to 5.8 in 2023 and then fell to a 5-year low of 2,3% in 2024. The USDA’s initial forecast for 2025 food inflation, released in July 2024, ranged from 3.7% to 8.0% with an average estimate of 2%. Since then, the range has narrowed but the average has trended higher. The March estimate for 2025 food inflation, released on Tuesday, offered a range of 1.3% to 5.1% with an average of 3.2%. The average price inflation for food away from home is projected at 3.7%, and food at home inflation is estimated at 2.7%. Wholesale egg prices have fallen sharply in recent weeks, but the USDA raised its egg price inflation estimates to 31.1% to 91.5%, with an average of 57.6%. Meat prices are expected to increase by 1.9%, fats and oils are forecast to rise by 0.3%, and dairy prices are projected to decline by 0.8%

BBC reports, India and US have begun bilateral trade negotiations that will continue until Saturday in Delhi: “This visit reflects the United States’ continued commitment to advancing a productive and balanced trade relationship with India,” a US embassy statement said. The US was recently India’s biggest trading partner, with bilateral trade amounting to $190 Bil. Trump and Modi had set a target to more than double to $5oo billion. The two sides are also committed to negotiating the first phase of a trade agreement by autumn 2025. The Trump administration has repeatedly accused India of being a ‘tariff king” and a “big abuser” of trade ties in the past.  India has recently lowered tariffs on Bourbon whiskey, motorcycles, and other US products, but the balance of trade is still stacked heavily in favor, with Delhi enjoying a $45 bn trade surplus. India’s average tariffs of around 12% are also significantly higher than the US’s 2%. India’s push to reach their government mandated ethanol blends has the country raising US corn imports as 2024 corn consumption is expected to reach 38.6 million metric tons.

Corn Comments & Analysis

CBOT Corn Sags on Rising Acreage Ideas; Drought in Great Lakes to Ease:

CBOT corn corrected as newly published average US acreage guesses push above USDA’s Outlook Forum estimate of 94 Mil, while Brazilian futures extract premium on improving rain chances. The average guess ahead of Monday’s report is 94.4 Mil, which assuming normal abundance and trend yield allows US corn supplies in 2025 of 17.0=17-3 Bil Bu. This would be record large and mandate the finding of export demand growth. Planting dates and summer weather are unknown today, but a supply loss is needed to be bullish above $4.80, July, and $4.60 December CBOT futures. The record large US corn seeding year was 96.4 Mil acres in 2012. To score a new record the US would have to seed an extra 5.9 Mil acres of US corn this spring bs. 2024. Such gains are possible amid producer surveys. Other news is lacking. The strategy remains to make new sales on BOT rallies. Ag Resources (ARC) doubts July can trade below 44.60 for any length of time into mid-summer, but the longer term risk is $3.80-$4.00 December amid larger US & Ukrainian production. The Midwest should be well watered amid frequent storm systems. Tuesday’s preliminary open interest showed corn up 17,891 contracts and wheat up 1,665 contracts and soybeans down 2,692 contracts. In the products soybean oil was down 2,742 contracts and soybean meal up 3,079 contracts. The surge in corn open interest is interesting amid the modest volume and pending important USDA March Stocks/Seeding Report.

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