Report: World Experienced Hottest Summer on Record

Diesel prices rising faster than regular gas as crude oil markets signal more increases coming

Federal Reserve Governor Christopher Waller said positive economic reports will buy the central bank some time as it decides if it needs to raise interest rates again to control inflation. “That was a hell of a good week of data we got last week, and the key thing out if it is it’s going to allow us to proceed carefully,” he told CNBC’s Steve Liesman during a “Squawk Box” interview. Friday’s jobs report showed better-than-expected job growth in August and average hourly earnings rose less than forecast. Also last week, the Fed’s preferred inflation gauge rose just 0.2% in July, and job openings, a key measure of labor market tightness, fell to their lowest level since March 2021. Waller, who has often favored tighter monetary policy and higher interest rates, said the key is to “see whether this low inflation is a trend or if it was just an outlier or a fluke.”

Diesel prices are rising faster than the price of regular gas as crude oil markets signal more increases are coming. Diesel prices have climbed more than 40% in the U.S. and Europe since May, when surprise output cuts by Saudi Arabia and some other members of the OPEC+ oil cartel took effect, Argus data showed. Most actively traded futures prices for Brent crude and West Texas Intermediate, the benchmarks for crude oil, are up 13% and 14% in the same time frame.

Secretary of State Antony Blinken arrived in Ukraine, where he is expected to announce more than $1 billion in additional aid. More in Russia & Ukraine section.

The German economy faced further challenges as industrial orders plunged by 11.7% in July when compared to the previous month, marking a significant and unexpected decline.

Report: China leader Xi Jinping reprimanded by elders at Beidaihe over direction of nation.

Other China-related news: China’s big banks continue moves to support yuan; China ordered government officials not to use iPhones or other foreign-branded devices for work or bring them to the office.

In the upcoming season, the world's largest sugar trader, Alvean, anticipates a sixth consecutive year of sugar deficits due to unfavorable conditions for sugar production, particularly in India.

Corn demand from Mexico only partially offsets smaller shipments to other markets. More in Markets section.

An unusually dry August has taken a toll on cereal grain and oilseed crops in Asia as El Niño intensified, and forecasts for lower rainfall this month are further threatening to disrupt supplies.

Farm bill updates in the Policy section include:

• Sen. Cramer op-ed: A strong farm bill supports national security.
• EWG report: Higher reference prices would favor southern growers.
• Schumer lists farm bill as item on to-do Senate list.
• Senate Ag Committee Chair Debbie Stabenow (D-Mich.) told Politico that she does not believe that a Democrat-only farm bill will be needed “at this point.”
   

Nominations: Former U.S. Treasury Secretary Jack Lew, 68, is being nominated by President Biden to be ambassador to Israel to replace former ambassador Tom Nides, who left his post in Jerusalem in July. Meanwhile, the nomination of Fed Governor Philip Jefferson for the position of Fed Vice Chair is progressing smoothly through the Senate.

Energy & climate change items include:

• Canadian pipeline operator Enbridge Inc. agreed to buy three utilities from Dominion Energy Inc. in a $9.4 billion deal to create North America’s largest natural gas provider.
• Report: Hurdles holding up $18 trillion worth of investments needed to reach global 2030 climate goals.
• DSM: Iowa agribusiness magnate's access to Gov. Kim Reynolds paves way for pipeline, lawyer says.
   

The latest report from the European Union's Copernicus Climate Change Service reveals that the world has just witnessed the hottest summer on record. This record-breaking summer included the hottest June and July, with triple-digit temperatures affecting parts of the United States and popular global travel destinations. Notably, July and August were approximately 1.5 degrees Celsius warmer than pre-industrial levels, a critical threshold that scientists have long warned we must stay below to prevent the most devastating consequences of climate change. More details in Markets section.

The unusually high temperatures in the Atlantic Ocean are contributing to the formation of another potentially dangerous hurricane. Tropical Storm Lee is expected to rapidly intensify and could pose a threat to the Leeward Islands in the Caribbean by the upcoming weekend. This underscores the ongoing challenges posed by extreme weather events driven by global warming.

C&S Wholesale Grocers is reportedly close to finalizing a deal to purchase stores from grocery giants Kroger and Albertsons Companies.

Tyson Foods is taking the step to close some of its plants as it faces challenges related to chicken production.

Senators are planning to vote on a three-bill spending package next week, which includes funding for veterans and agriculture.

Senate Republican leader Mitch McConnell (R-Ky.) shows “no evidence” of a seizure disorder or a stroke, the attending physician to Congress wrote in a letter released on Tuesday McConnell is expected to address his health today during a closed-door GOP conference meeting after two recent health scares in front of TV cameras. More in Congress section.

Former Rep. Mike Rogers (R), who led the House Intelligence Committee for two terms, declared his candidacy for Michigan’s open Senate seat to replace retiring Sen. Debbie Stabenow (D-Mich.).

A federal court threw out Alabama’s latest congressional map, saying the state defied a Supreme Court decision. A special three-judge district court in Alabama ordered a special master and cartographer to draw new maps that comply with the Voting Rights Act in time for the 2024 elections. Alabama’s population is 26.8% Black or African American, but only one of the seven voting districts in the state’s proposed map had a Black majority. The Alabama attorney general’s office said it would appeal to the Supreme Court. More in Politics & Elections section.

Hard-right Republicans are considering the possibility of initiating a motion to remove Kevin McCarthy from his position as Speaker of the House, Axios reports.

In Rhode Island's special primary election, Democrat Gabe Amo emerged as the top candidate from a crowded field of 12 contenders.

Sen. Sherrod Brown (D-Ohio) is facing a challenging re-election in 2024.

Equities today: Asian stock markets were mixed in overnight trading. U.S. Dow opened 75 to 80 points lower and then continued to drift lower. A few companies, including GameStop, American Eagle Outfitters and ChargePoint will report earnings after the bell. In Asia, Japan +0.6%. Hong Kong flat. China +0.1%. India +0.2%. In Europe, at midday, London -0.6%. Paris -0.7%. Frankfurt -0.4%.

     U.S. equities yesterday: All three major indices ended with losses as the S&P 500 was unable to work in positive territory during the day and the Dow started higher only to end in the red. The Nasdaq fell late in the session to finish with losses. The Down was down 195.74 points, 0.56%, at 34,641.97. The Nasdaq lost 10.86 points, 0.08%, at 14,020.95. The S&P 500 fell 18.94 points, 0.42%, at 4,496.83.

Agriculture markets yesterday:

• Corn: December corn rose 4 1/2 cents to $4.86, ending the session above the 10-day moving average.
• Soy complex: November soybeans fell 4 1/4 cents to $13.65. December soybean meal fell $2.00 and settled at $397.60. December soyoil fell 48 points before closing at 62.81 cents.  
• Wheat: December SRW wheat rose 3 3/4 cents at $5.99 1/4, near mid-range after notching a contract low. December HRW wheat gained 1 3/4 cents to $7.24 1/2. Prices closed near mid-range and hit a two-year low. December spring wheat futures rose 2 1/2 cents to $7.62 1/4.
• Cotton: December cotton fell 119 points to 88.76 cents after marking an intraday low of 87.17 cents.  
• Cattle: October live cattle fell 20 cents to $179.95 and nearer the session low. October feeder cattle lost 35 cents at $254.30 and near mid-range.
• Hogs: Hog futures moved mostly higher Tuesday but couldn’t sustain early highs. Nearby October futures rose 12.5 cents on the day to close at $83.175. The cash hog market continues to suffer from seasonal pressure, as exemplified by the CME confirming last Thursday’s quote of $87.77, down $1.49, indicated by last Friday’s USDA data.
   

Ag markets today: Corn and soybeans were supported during overnight trade by deteriorating crop condition ratings, while wheat also traded higher. As of 7:30 a.m. ET, corn futures were trading mostly 2 cents higher, soybeans were 11 to 13 cents higher, winter wheat markets were 4 to 7 cents higher and spring wheat was fractionally to 6 cents higher. Front-month crude oil futures were modestly weaker, while the U.S. dollar index was about 175 points lower.  

Quotes of note:

• Hold and hope. The Fed’s Christopher Waller signaled support for a pause this month, telling CNBC that officials can afford to “proceed carefully” with rate increases. Loretta Mester said more hikes may be needed, but “there’s still a lot of time before our next decision.” Markets are widely expecting the Fed to maintain rates this month, although there is uncertainty over its rate path in the meetings thereafter.
   
• Global crude oil prices are expected to rise well into the $90 range, approaching $100 a barrel or more, said Bob McNally, president of consultant Rapidan Energy Group. Gasoline and diesel prices will follow. “There are fewer risks [as serious] to a president's reelection then rising pump prices,” McNally said in an interview with Bloomberg. “The president is in a really tough position.”
   
• Diesel rising faster than gas prices. “Diesel is more heavily affected because of the type of crude that’s being taken out of the market,” said Alan Gelder, vice president for refining, chemicals and oil markets in Wood Mackenzie’s commodities research business. “Saudi’s oil provides a higher yield for diesel than lighter crude oils. This loss adds further cost to the economy.”
   

The German economy faced further challenges as industrial orders plunged by 11.7% in July when compared to the previous month, marking a significant and unexpected decline. This drop was partly attributed to a distortion caused by substantial aerospace orders in June, as reported by the German Federal Statistics Office. However, the decline in orders was observed across various sectors in July, including computing, electrical equipment, and machinery, adding to concerns about the health of the German economy.

Market perspectives:

     • Outside markets: The U.S. dollar index was weaker, with the euro and Swiss franc firmer against the U.S. currency. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.24%, with a mostly lower tone in global government bond yields. Crude oil futures are weaker, with U.S. crude around $86.45 per barrel and Brent around $89.60 per barrel. Gold and silver futures were little changed with gold around $1,950 per troy ounce and silver around $23.72 per troy ounce.         

     • The price of diesel fuel has been rising at a faster rate than regular gasoline, and this trend is expected to continue. This increase in diesel prices has been driven by recent developments in the crude oil market. Crude oil prices rose after Saudi Arabia and Russia announced an extension of their oil production cuts. However, diesel fuel prices surged even more. This is because Russian and Middle Eastern crude oils tend to be heavier and produce more diesel, jet fuel, and marine fuel compared to U.S. shale oil, which is lighter and primarily yields gasoline. As a result, OPEC production cuts and Western sanctions on Russian crude oil have had a more pronounced impact on the prices of these heavier fuels. This disparity is also reflected at U.S. gas stations. While the national average price for unleaded gasoline increased by 7 cents per gallon in August, the cost of diesel rose significantly more, by 42 cents per gallon.

        Of note: Some analysts are concerned that diesel prices could increase sharply during the colder months, particularly if China repeats last winter’s curbs on exports of oil products.

     • Sugar high. In the upcoming season, the world's largest sugar trader, Alvean, anticipates a sixth consecutive year of sugar deficits due to unfavorable conditions for sugar production, particularly in India. Alvean, a trading house controlled by Brazilian producer Copersucar SA, foresees a shortage of sugar globally. The poor outlook for India's crops is a significant factor contributing to this situation. Mauro Virgino, trading intelligence lead at Alvean, mentioned that extreme weather conditions in India will likely prevent the country from exporting sugar for the season beginning in October. Additionally, below-average monsoon rains are expected to hinder sugar cane planting in India, which will negatively impact future production. Alvean also predicts challenges in Thailand, another important sugar exporter. The higher profits derived from cultivating cassava are enticing farmers away from sugar cane cultivation, leading to difficulties in sugar production in Thailand. This combination of factors points to a potential shortage of sugar in the global market in the upcoming season. Link for more via Bloomberg.

     • Corn demand from Mexico only partially offsets smaller shipments to other markets. Mexico is poised to register a new record for corn imports from the U.S., in contrast to declines in the other main markets. In the first half of 2023, U.S. corn sales to Mexico totaled $3.027 billion, a 15.1% annual increase. Corn sales to Japan and China totaled $1.536 billion and $1.242 billion, respectively, in the first half of this year, annual declines of 32.9% and 59.7%. There were also year-on-year declines in corn shipments to Colombia ($576 million, -34.8%) and Canada ($407 million, -62.7%).

    • Ag trade: South Korea purchased 55,000 MT of feed wheat likely to be sourced from the Black Sea region. Japan is seeking to buy 60,000 MT of feed wheat and 20,000 MT of feed barley.

     • El Niño threatens global crops. An unusually dry August has taken a toll on cereal grain and oilseed crops in Asia as El Niño intensified, and forecasts for lower rainfall this month are further threatening to disrupt supplies. “We are in full-blown El Niño weather in several parts of the world, and it is going to intensify towards the end of the year,” Chris Hyde, a meteorologist at U.S.–based Maxar, told Reuters. “The weather pattern in Asia will correlate with dry El Niño conditions.” Australia and India have both received below-normal rainfall, lowering production prospects. Southeast Asia has also received lower-than-normal rainfall, with Indonesia and Thailand the worst hit.

     • The past three months have been the hottest ever recorded, according to the Copernicus Climate Change Service, an EU-funded program. August, in particular, marked the warmest August on record and the second hottest month ever, following July 2023. During August, temperatures were estimated to be approximately 1.5° Celsius (34.7 degrees Fahrenheit)) above preindustrial averages. Additionally, sea-surface temperatures in August reached a monthly average of 20.98° Celsius, (69.76 degrees Fahrenheit), setting a new high.

     More info: The global average surface temperature for June through August was about 1.17°F above the 1991-2020 average. This beat the previous record-hot summer of 2019 by nearly 0.54°F. June and July were each record-hot months. July ranked as the warmest month since the dawn of the instrument era in the 19th century.

     • NWS weather outlook: There is a Slight Risk of severe thunderstorms over parts of the Lower Mississippi Valley/Tennessee Valley on Wednesday... ...There are Heat Advisories over parts of the Northeast and Southern Plains/Lower Mississippi Valley on Wednesday... ...Air Quality Alerts over parts of the Northern High Plains, Central Plains, and Upper Mississippi Valley on Wednesday

Items in Pro Farmer's First Thing Today include:

     • Soybeans lead overnight price gains
     • Corn, soybean CCI ratings deteriorate
     • Argentina launches new ‘soy dollar’ program
     • Packer beef margins remain positive
     • Pork cutout value jumps

— The G7 countries decided to halt their reviews of price caps on Russia's oil and fuel exports, despite the rising energy prices, according to Reuters. These caps were initially imposed in December for crude oil and in February for various fuels. Although they were meant to be reviewed every two months by EU nations and the G7, the caps have not been re-evaluated since March. Consequently, they currently stand at $60 per barrel for crude oil, $45 per barrel for heavy fuels, and $100 per barrel for light fuels like gasoline and diesel. Third countries could purchase Russian fuels using Western ship insurance if they could prove that the caps were not exceeded. However, Russian exporters have found alternative ways to export their energy products without relying on Western ships and insurance. While a U.S. official stated that the caps are still in place, there are no immediate plans for a review. As crude oil prices have risen, driven by Saudi Arabia's decision to maintain production limits through the end of the year, Russian crude is trading well above the established cap.

— The United Kingdom is set to label Wagner, a Russian mercenary organization, as a terrorist group. Home Secretary Suella Braverman has characterized Wagner's operations in Ukraine, the Middle East, and Africa as a "global security threat" and as a "military instrument of Vladimir Putin's Russia on foreign soil." This designation will make it a criminal offense in the U.K. to support or be affiliated with the Wagner group.

— Arms negotiations between Russia and North Korea are advancing, U.S. national security adviser Jake Sullivan said, and he warned Pyongyang over supplying weapons to Moscow for use in Ukraine. Providing weapons to Russia "is not going to reflect well on North Korea, and they will pay a price for this in the international community," he told reporters at the White House. "We have continued to squeeze Russia's defense industrial base," Sullivan said, and Moscow is now "looking to whatever source they can find" for goods like ammunition.

— U.S. Secretary of State Antony Blinken arrived in Kyiv for talks, highlighting growing concerns about Ukraine's counteroffensive that appears to have yielded limited results. During this visit, officials aim to gain insight into Ukraine's plans for the coming weeks in addressing the ongoing conflict. This visit comes shortly after President Joe Biden requested over $24 billion from Congress to assist Ukraine in its efforts against Russia in the war. Some polls suggest that public support in the U.S. for continued funding in this regard may be waning, and Blinken's visit is seen as an opportunity for the administration to make its case for ongoing support to the American people.
 

— Sen. Cramer op-ed: A strong farm bill supports national security. Sen. Kevin Cramer (R-N.D.), member of the Senate Armed Services Committee (SASC), penned an op-ed in the Washington Examiner (link) highlighting the need to pass a strong Farm Bill. Its passage would provide stability for farmers and ranchers while strengthening U.S. national security and geopolitical influence. “The United States is a world leader in agricultural exports, and North Dakota is a net exporter, meaning we grow much more than our state of roughly 775,000 people consumes. You need North Dakota durum wheat for your pasta in Manhattan, edible beans for food aid in Sudan, and soybeans for hog meal in China. With so much of our products going to feed a hungry country and world, it is all the more important we pass a strong farm bill to support our producers,” wrote Sen. Cramer.

     Some highlights:

• Agriculture is a capital-intensive and risky business. In North Dakota, 90% of the state’s land mass is tied to farms and ranches, and the average cash expense per farm was $955,496 in 2022.
• Crop insurance programs in the farm bill are a vital resource, not a bailout, for when the going gets tough. Without it, producers would be unable to overcome the impact of a catastrophic summer storm or flooded fields during harvest.
• Commodity support programs such as Agricultural Risk Coverage and Price Loss Coverage help prevent poor market conditions from causing widespread farm bankruptcies. Effective risk management programs are cornerstones of the farm bill, providing more certainty, reducing the need for emergency disaster relief, and ensuring our nation remains an agricultural powerhouse.
• Crop insurance, commodity programs, and other agriculture support structures in the farm bill represent a tiny fraction, just 0.23%, of projected overall spending over the next decade.  

— EWG report: Higher reference prices would favor southern growers. U.S. farm groups and farm state lawmakers want higher reference prices in the upcoming farm bill. However, an environmental activist group, the Environmental Working Group (EWG), has raised concerns that this would predominantly benefit a relatively small number of large cotton, rice, and peanut growers, primarily located in the South. Link to report.

     EWG's analysis suggests that higher reference prices would primarily assist fewer than 6,000 growers, with a focus on those in the South. The organization released its analysis alongside an online summit on farm subsidies. During the summit, speakers called for stricter regulations on farm subsidies and taxpayer-subsidized crop insurance programs.

     Cotton, rice, and peanut growers are more likely to enroll in the Price Loss Coverage (PLC) program, where payments are triggered when commodity prices fall below reference prices. On the other hand, corn and soybean farmers tend to favor the Agriculture Risk Coverage (ARC) program, which calculates payments based on annual crop revenue compared to the five-year average.

     Of note: There are internal farm bill discussions about potentially reducing the premium subsidy for crop insurance, with some suggesting it should be lowered from 61 cents on the dollar to 40 cents on the dollar.

— Schumer lists farm bill as item on to-do Senate list. The Senate agenda includes "advancing a farm bill," but the first item on the list is preventing a government shutdown on Oct. 1, said Majority Leader Chuck Schumer (D-N.Y.) as the Senate resumed work after the August recess. Link for details.

     Meanwhile, Senate Ag Committee Chair Debbie Stabenow (D-Mich.) told Politico that she does not believe that a Democrat-only farm bill will be needed “at this point.” Her comments come in the wake of a suggestion last week by panel member Amy Klobuchar (D-Minn.) that a Democrat-only farm bill could be needed to thwart the demands of some conservative Republicans for additional cuts in food and nutrition programs. Stabenow said she was still hoping to move a bill yet this year, a stance which will mean an extension of some duration will be needed to finish the bill.

— Former U.S. Treasury Secretary Jack Lew, 68, is being nominated by President Biden to be ambassador to Israel to replace former ambassador Tom Nides, who left his post in Jerusalem in July.

— The nomination of Fed Governor Philip Jefferson for the position of Fed Vice Chair is progressing smoothly through the Senate. On Tuesday, the Senate voted 83-10 to invoke cloture on Jefferson's nomination, indicating broad bipartisan support. This sets the stage for his confirmation as Fed Vice Chair by the Senate.

     Action ahead on more nominations. Senate Banking Committee Chairman Sherrod Brown (D-Ohio) announced that votes on two other nominations related to the Federal Reserve are expected in the coming days. These nominations include Fed Governor Lisa Cook for a new term and Adriana Kugler to be a Fed Governor. While the Senate Banking Committee had approved all three nominations back in July, they were not voted on by the full Senate before the August recess.

     Once all three nominees are confirmed, the Federal Reserve will no longer have any open seats among its leadership. This development comes at a crucial time in monetary policy, as the expectation is that the Fed will pause the interest rate increases that were implemented to combat inflation.

— Report: Xi reprimanded by elders at Beidaihe over direction of nation. Katsuji Nakazawa, a senior staff and editorial writer at Nikkei based in Tokyo, in an article (link/paywall) discusses signs of turmoil in Chinese domestic politics.

     President Xi Jinping's decision to skip the upcoming Group of 20 (G20) summit in India and the emergence of details from the Beidaihe meeting, an annual gathering of incumbent and retired leaders of the Chinese Communist Party, hint at internal challenges. During this year's meeting, retired party elders reportedly reprimanded Xi Jinping, expressing concerns about the ongoing political, economic, and social turmoil in China and the potential threat to the party's rule. The absence of prominent party elders like Jiang Zemin and Hu Jintao also set a different tone for the meeting.

     The article speculates that Xi Jinping's avoidance of international conferences and absence from public view this summer could be due to concerns about addressing China's economic struggles and deteriorating relations with the United States. The author highlights Xi's frustration with the unresolved issues left by his predecessors and his focus on addressing these challenges.

     The piece underscores the complexity of Chinese politics, emphasizing the uncertainty surrounding Xi's leadership and the potential impact of internal dynamics on the country's future direction.

— China’s big banks continue moves to support yuan. China’s major state-owned banks were seen mopping up yuan liquidity in the offshore foreign exchange market and actively selling U.S. dollars onshore on Wednesday, Reuters reported, citing people with knowledge of the matter. The goal of the state banks’ actions was to control the pace of yuan depreciation, one of the sources said.

— China ordered government officials not to use iPhones or other foreign-branded devices for work or bring them to the office. The directive is the latest step in Beijing’s campaign to cut reliance on foreign technology and enhance cybersecurity and comes amid a campaign to limit flows of sensitive information outside of China’s borders.

— Canadian pipeline operator Enbridge Inc. agreed to buy three utilities from Dominion Energy Inc. in a $9.4 billion deal to create North America’s largest natural gas provider.

— Report: Hurdles holding up $18 trillion worth of investments needed to reach global 2030 climate goals. Significant barriers, including grid constraints, high costs of green technology, and planning delays, are holding up approximately $18 trillion worth of investments required to meet global climate goals by 2030. Achieving a rapid energy transition is becoming increasingly challenging due to these obstacles, according to a report by Boston Consulting Group.

     To limit global warming to 1.5°C above preindustrial levels, the adoption of renewable and low-carbon energy sources must occur at a pace three times faster than previous fuel transitions, according to the report. It highlights the need to move beyond policy support to practical implementation, focusing on regulations, disbursements, and actions at the state and member state levels.

     The primary gap in funding exists in the electricity and end-user categories, particularly in investments in renewable power. High financing costs for renewables make them less competitive compared to fossil fuel investments.

— DSM: Iowa agribusiness magnate's access to Gov. Kim Reynolds paves way for pipeline, lawyer says. An attorney representing Iowa landowners opposing a $5.5 billion carbon capture pipeline has revealed public documents showing numerous meetings between Iowa Governor Kim Reynolds and Bruce Rastetter, the agribusiness magnate behind the pipeline, according to the Des Moines Register (link/paywall). The attorney, Brian Jorde, argues that these records indicate that Rastetter is leveraging his political influence to tilt the project's favor in the developer's direction.

     Background. Summit Carbon Solutions, an Ames-based company affiliated with Rastetter's Summit Agricultural Group, intends to construct a 700-mile pipeline in Iowa for capturing carbon dioxide emissions from ethanol plants. If granted a permit for the project, Summit Carbon Solutions could have eminent domain powers, allowing them to compel unwilling landowners to sell access to their property for the pipeline. However, nearly 80% of Iowans oppose the use of eminent domain for carbon capture pipelines, according to a Des Moines Register/Mediacom Iowa Poll.

     The controversy surrounding the pipeline centers on questions of influence and fairness in the permitting process. Critics argue that Rastetter's access to Governor Reynolds and the political contributions made to Reynolds and former Governor Terry Branstad, who appointed Reynolds, create a perception of undue influence over the pipeline's approval. The emails disclosed by Jorde show Rastetter's invitations to Reynolds for events, fundraisers, and social gatherings, suggesting a close relationship between the two.

     Reynolds appointed the three-member Iowa Utilities Board, which is responsible for overseeing the pipeline permit request. Critics claim that this appointment of board members sympathetic to Summit Carbon Solutions has influenced the timing of the hearing and fast-tracked the permit process to align with the company's interests.

     Opponents of the pipeline argue that they have struggled to secure meetings with Governor Reynolds to discuss their concerns, while Rastetter appears to have had regular access to her. They assert that Rastetter's political connections are enabling him to push through a project that is highly controversial among the state's residents.

     Summit Carbon Solutions stands to benefit from substantial federal tax credits if the project proceeds. It aims to capture and store 18 million tons of carbon dioxide annually from ethanol plants in multiple states, helping to reduce the carbon footprint of ethanol production.

— C&S Wholesale Grocers is reportedly close to finalizing a deal to purchase stores from grocery giants Kroger and Albertsons Companies. The two supermarket chains are divesting these stores as part of their efforts to obtain regulatory clearance for their $25 billion merger. SoftBank Group is expected to provide financing for this transaction. Initial reports about this potential deal surfaced via Bloomberg, and it's anticipated that an official announcement may be made later this week. The sale involves C&S acquiring most of the stores that Kroger and Albertsons had planned to sell, estimated to be between 250 to 300 stores, as they aim to address regulatory concerns related to their merger. C&S's interest in this acquisition stems from its previous loss of Ahold Delhaize, which transitioned to self-distribution in 2019. The Federal Trade Commission is currently reviewing the proposed Kroger/Albertsons merger.

— Tyson Foods is taking the step to close some of its plants as it faces challenges related to chicken production, the Wall Street Journal reports (link). Initially, Tyson had increased chicken production in response to the easing of the Covid-19 pandemic, but it is now closing plants to reduce costs and address an oversupply of chicken products like nuggets, wings, and breasts. The company's chicken business is dealing with stagnant demand and declining wholesale prices, which may have been exacerbated by Tyson's decision to ramp up production. This supply issue is partly a result of the volatile shifts in consumer and commodity markets during the pandemic. During the pandemic, chicken companies like Tyson and Pilgrim's Pride Farms rushed to meet increased consumer demand, with Tyson aiming to gain a larger market share to improve its struggling chicken business. However, by late 2022, labor challenges had eased, chicken prices were dropping, and it became apparent that Tyson had overestimated the demand for its products.

— The CDC issued an alert warning healthcare professionals to be on the lookout for fatal infections of the “flesh-eating bacteria” Vibrio vulnificus, as warmer waters and Hurricane Idalia may cause a spike in cases. At least five people died from fatal vibrio infections in New York, Connecticut and North Carolina between July and August, per the CDC, and it can be contracted by eating raw seafood like oysters, or if an open wound comes into contact with raw seafood or its drippings, salt water or brackish water—a mix between fresh and saltwater.  

— A federal court has appointed a special master to redraw the congressional map for Alabama after a panel of federal judges invalidated the district lines created by state lawmakers. The judges found that the legislative plan did not address a potential violation of civil rights law. The special master has been given approximately three weeks to develop proposals for a new congressional map that meets legal requirements and addresses the concerns raised by the court. The decision to appoint a special master indicates the court's intent to ensure a fair and lawful redrawing of the Alabama congressional districts. Alabama said it would appeal yesterday’s ruling ordering a new congressional map to the Supreme Court

— Former GOP lawmaker Mike Rogers enters Michigan open Senate race. Rogers, who previously chaired the House Intelligence Committee and is known for his moderate stance within the GOP, announced his candidacy for Michigan's open Senate seat. The National Republican Senatorial Committee recruited him for this race, providing the Republican Party with a strong contender in a state where they had struggled to find a viable candidate. The Michigan Senate race is significant as it could determine which party controls the closely divided Senate in 2025. However, Republicans have not won a Senate seat in Michigan since 2004, largely due to Democrats' dominance in the state legislature and the governor's mansion.

     Incumbent Democratic Senator Debbie Stabenow announced her retirement earlier in the year. Several top Democrats quickly rallied behind Democratic Representative Elissa Slotkin, although actor Hill Harper is also running for the seat.

— Hard-right Republicans are considering the possibility of initiating a motion to remove Kevin McCarthy from his position as Speaker of the House, Axios reports. Rep. Tim Burchett from Tennessee mentioned that the idea of a motion to vacate is on the minds of many, and it only takes a few votes to trigger it. A single member can introduce such a motion, and with just a handful of Republican votes alongside Democrats, McCarthy could be removed with a majority vote. These discussions are being used by some House Republicans as leverage to push for an impeachment inquiry against President Biden. Rep. Matt Gaetz from Florida emphasized the need to act and force votes on impeachment when they return to Washington, suggesting that McCarthy's support for such actions might impact his position as Speaker.

— In Rhode Island's special primary election, Democrat Gabe Amo emerged as the top candidate from a crowded field of 12 contenders. Amo, who worked in the White House during both the Obama and Biden administrations, secured this victory despite facing a progressive opponent who received campaign support from Sen. Bernie Sanders. Gabe Amo, the son of immigrants from Ghana and Liberia, has the potential to become the first Black candidate elected to the House from Rhode Island. He will now proceed to the special election on November 7, where he will face Republican Gerry Leonard, a Marine veteran. This vacancy in the House arose due to the career change of Rep. David Cicilline, a Democrat.

     Another House seat is set to become vacant when Rep. Chris Stewart, a Republican from Utah, leaves office due to his wife's health.

— Sen. Sherrod Brown (D-Ohio) is facing a challenging re-election in 2024. Ohio, once a key swing state, has shifted solidly toward Republicans in recent years. Brown is counting on his personal appeal to working-class families and union trades, casting himself as a pro-labor, progressive populist, to retain support from White working-class voters who have leaned toward former President Donald Trump, the Washington Post reports (link).

     Brown's re-election race is seen as a critical test of whether Democrats can regain support in states like Ohio and similar regions. This race is closely watched because it's one of the few where Democrats must defend seats in states Trump won as they seek to maintain their Senate majority.

     Brown's approach centers on connecting with blue-collar workers and addressing their concerns about the economy, corporate interests, and layoffs at large manufacturing companies. He emphasizes fighting for workers' rights and challenging corporate power.

     Although Ohio has shifted toward Republicans, Brown has won his previous elections decisively, including in 2018 when he defeated his Republican opponent by nearly seven percentage points. His ability to connect with blue-collar workers and position himself as less liberal than the Democratic Party as a whole has contributed to his success.

     Of note: Brown's support for punitive tariff measures on Chinese steel imports, backing of the United States-Mexico-Canada trade agreement, and opposition to free-trade deals have also bolstered his credibility with voters and distinguished him from other Democrats. Despite the decline in union membership in Ohio over the years, Brown's relationship with manufacturing labor unions continues to play a significant role in his appeal to White working-class voters.

     Brown's re-election campaign focuses on issues like income inequality, corporate power, and economic struggles faced by working-class families. His record of delivering policy wins for workers, such as the Chips and Science Act, which supports domestic semiconductor production, has earned him support from unions.

     The race will feature several Republican challengers, including Ohio State Sen. Matt Dolan, businessman Bernie Moreno, and Ohio Secretary of State Frank LaRose. These candidates criticize Brown's ability to improve the economy and accuse him of being too aligned with the Biden administration despite his populist rhetoric.

     In his campaign, Brown aims to showcase his bipartisan accomplishments, such as the Fend Off Fentanyl Act, which he co-sponsored with Sen. Tim Scott (R-S.C.), and his efforts to address issues like rail safety in the aftermath of the East Palestine train derailment.

     Bottom line: While Brown's appeal to working-class voters remains strong, the 2024 election outcome in Ohio will provide insights into whether Democrats can regain support in states that have shifted politically and whether Brown's progressive, pro-labor approach can still resonate with voters in a changing political landscape.

— Tests on Sen. McConnell show no evidence of stroke or seizure disorder. Amid concerns about Senate Republican leader Mitch McConnell's (R-Ky.) health and ability to lead, the Capitol's attending physician Brian Monahan stated that there is "no evidence" of McConnell having a seizure disorder or a stroke. Monahan's statement comes after McConnell froze for over 30 seconds during a recent public appearance. He underwent medical examinations, including a brain MRI and EEG, to determine the cause of the episode. However, Monahan's letter did not offer a conclusive medical opinion on the underlying cause.

     McConnell returned to the Senate Tuesday after a month-long recess, giving an eight-minute speech on the Senate floor, briefly alluding to a “particular moment” during the August break that “received its fair share of attention. While no Senate Republicans have suggested he step down, McConnell's condition has raised concerns, particularly with the 2024 elections approaching. Despite these concerns, McConnell's allies have indicated that he has maintained his regular political activities, including meetings, phone calls, and fundraisers. Sen. Dick Durbin (D-Ill.), the Senate Democrats' second-ranking leader, revealed that McConnell linked his recent episodes to a concussion he sustained in March. McConnell mentioned that the concussion had lasting effects on him, according to Durbin.

     Of note: Some members are expressing the need for McConnell to be more transparent about his recent health issues. While there is no immediate effort to remove McConnell from his leadership position, the unity within the party appears to be somewhat fractured. GOP Sen. Rand Paul, also from Kentucky, has challenged McConnell's response to his health concerns. Paul specifically questioned the explanation provided by Capitol physician Brian Monahan, which suggested that McConnell's health issue may have been due to lightheadedness or dehydration. Paul, who is an ophthalmologist, expressed skepticism about this explanation and suggested that McConnell may have experienced a neurological event instead.

— Senators are planning to vote on a three-bill spending package next week, which includes funding for veterans and agriculture. This move is aimed at making progress before the September 30 deadline to avoid a gov’t shutdown. The package being prepared in the Senate includes appropriations bills for Agriculture-FDA, Military Construction-VA, and a third measure that could cover Energy and Water, State and Foreign Operations, or Transportation-HUD.

     This marks the Senate's first floor votes on fiscal 2024 appropriations bills. These bills received strong bipartisan support during committee markups, with unanimous support for Agriculture-FDA and Military Construction-VA bills, as well as for Energy and Water and Transportation-HUD bills. The State and Foreign Operations measure had just two votes against it in committee.

     While lawmakers acknowledge the need for a stopgap measure to keep the government funded beyond September 30, both chambers aim to hold votes this month to make progress toward a final agreement later in the year.

     The House has already passed its Military Construction-VA bill, and the Senate plans to use the House-passed bill as the basis for its three-bill package.

     Meanwhile, the duration of the stopgap funding bill is still under debate, as it would provide more time to pass additional bills and negotiate. Additionally, there is the possibility of including the $44 billion in supplemental funds requested by President Joe Biden for Ukraine and disaster relief in the late-September stopgap. Senate Minority Leader Mitch McConnell (R-Ky.) emphasized the importance of keeping the American people safe, with the supplemental spending bill seen to achieve that goal.

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