Wheat leads the overnight grain price recovery.

Grains are firmer this morning, with soybeans trading mixed. French milling wheat traded stable overnight, allowing wheat to continue its price recovery, with Kansas City leading the advance on the pervasive dryness that is now becoming a focus. Spreads dominate, with corn supporting Chicago wheat, now trading 30 over spot corn which is historically tight.

Yesterday, the FOMC raised its Fed funds rate by .25%, which was as expected, and has its “dot plot” forecasting tool utilizing one more rate hike this year before a long pause. The chairman indicated the Fed may raise rates again in May but that is being debated. The US dollar declined due to the pause in central bank rate increases as massive US government debt has pressured the US dollar. Weakness in the dollar implies a new lease on life for inflation, with exports improving if the dollar weakens below 100.00.

Corn continues to be supported with China shopping as the Argentine corn/soybean crops are acknowledged to have sharp losses, which improves demand for US corn, the only available source until summer. Index funds are now estimated short up to 70,000 contracts of corn and 110,000 contracts of wheat, which can promote short-covering rallies.

Live and feeder cattle contracts traded at new monthly lows yesterday but recovered to close near session highs. Some light trade Wednesday from hedged feed yards had some cash breakout $1 lower for the week at $163 allowing them to capture a positive basis on hedges. The north so far traded from $165-166. Regional spreads have now widened again similar to last November. Box beef values trend lower with choice off $138 and select down $173. As the stock market has absorbed the banking concerns, futures could start a recovery from present lows.