Food Prices (Excerpt)

Last week, the USDA pegged corn stocks as of March 1 at 5.399 billion bushels, above the average analyst estimate of 5.013 billion bushels. The USDA also said farmers would plant the highest corn acreage since 1936. The nearby futures price of corn has tumbled from a recent high of $7.41 per bushel to $6.41. Wheat prices are also down sharply over this period.

Lower grain prices should keep a lid on food inflation, which is a positive development for consumers' purchasing power and should allow the Fed to maintain its ultra-easy monetary policy. Of course, the Fed tends to track inflation excluding food and energy. The core CPI was up only 2.0% y/y during February. The personal consumption deflator rate was even lower at 1.3%.

Today's Morning Briefing: Heartland. (1) On the road again: Houston, Fort Worth, Dallas, & KC. (2) What’s the matter with us? (3) No country for cranky old men. (4) Accentuating some positives, once again. (5) Laffer is rooting for the Red team. (6) Food and fuel prices stop ascending and could descend. (7) Profits in GDP making new highs. (8) Why are stock prices rising while earnings estimates have been chopped? (9) One hotspot is heating up, while another is cooling off. (10) Technicians don’t like what they see in the charts. (11) Europe falls deeper into recession. (12) The prairie sky in Texas. (More for subscribers.)