House GOP Plans More Speaker Votes

As expected, Vilsack tapping CCC for trade promotion and food aid

Today’s Digital Newspaper

MARKET FOCUS

New trading limits for grain, oilseed futures, effective Nov. 1
USDA daily export sale: 117,200 MT corn to Mexico during 2023=2024 marketing year
Coca-Cola announced better-than-expected profits and revenue
ADM profit tops estimates on good ethanol margins, Brazilian exports
S&P 500 earnings per share on track for 1.1% year over year rise
Global demand for oil will reach its peak this decade: IEA
Record outflows from ESG funds reflect Wall Street's waning enthusiasm
Pershing Square Holdings CEO Ackman's bond short covering triggers Treasuries rally
Bitcoin surged in value early Tuesday
China achieves record copper production amid strong domestic demand
UAW walks out of Stellantis' plant, adding 6,800 Mich. workers to strike
Ag markets today
Some trans-Pacific container lines diverting vessels to Mexico port
Record high expected for U.S. soybean meal exports in 2023
Indonesia to implement new rice price measures
NWS weather outlook
Pro Farmer First Thing Today items

CONGRESS

House Republicans aim to end feuding and resume legislative work
Sizing up the latest House GOP leadership candidates
House lawmakers launch discussion on next Water Resources Development Act

ISRAEL/HAMAS CONFLICT

Hamas releases two more hostages, signaling potential progress in negotiations
Israel willing to delay ground invasion of Gaza for a few days

RUSSIA & UKRAINE

Russia's Rusal buys 30% stake in Chinese alumina plant amid supply disruptions
Ukraine’s Black Sea corridor gain exports reach 700,000 MT

POLICY

USDA to tap $2.3 billion from CCC fund for trade promotion and food aid
ERP payments rise to $8.19 billion, while CFAP totals see minor adjustments

PERSONNEL

Leadership changes announced for USDA's APHIS
Top aide to Sen. Elizabeth Warren joins Biden's National Economic Council

CHINA

Economists cast doubt on China's ambitious 2035 income goal
SCMP: China’s former economic tsar, Liu He, maintains influence behind closed doors
WSJ: China initiates charm offensive in preparation for potential Xi Jinping U.S. visit
China’s gov’t land sales revenue continues to drop
How far is China’s slowdown spreading? Ask a dairy farmer 6,000 miles away: WSJ

TRADE POLICY

Argentina expands export incentive program

ENERGY & CLIMATE CHANGE

USDA releases study on agriculture and forestry's role in U.S. carbon markets
Nigeria aims to curb raw mineral exports, promoting local value addition

LIVESTOCK, NUTRITION & FOOD INDUSTRY

HPAI spreads to 12 commercial turkey flocks in four U.S. states; trade restrictions

HEALTH UPDATE

CDC recommends everyone age 6 months and older get seasonal flu vaccine

POLITICS & ELECTIONS

Chris Christie qualifies for third GOP presidential debate with adequate donor support
Rep. Dean Phillips preparing to announce primary challenge to President Biden
N.C. Senate advances proposed congressional map that could favor GOP

OTHER ITEMS OF NOTE

Biden administration proposing major changes to H-1B visa program
White House on Monday designated 31 communities as technology hubs

MARKET FOCUS

— New trading limits for grain, oilseed futures. Effective Nov. 1, the new daily trading limits will be 35 cents for corn (currently 45 cents), 95 cents for soybeans (currently $1.05) and 50 cents for SRW and HRW wheat futures (currently 60 cents). If there is a limit close, the expanded limits the following day would be 55 cents for corn, $1.45 for soybeans and 75 cents for SRW and HRW wheat.

— Equities today: Asian and European stocks were mixed overnight, with Asian shares mostly up and European shares mostly down. U.S. Dow opened around 150 points higher. In Asia, Japan +0.2%. Hong Kong -1.1%. China +0.8%. India closed. In Europe, at midday, London flat. Paris +0.7%. Frankfurt +0.3%.

U.S. equities yesterday: The Dow opened the week down 190.87 points, 0.58%, at 32,936.41. The Nasdaq rose 34.52 points, 0.27%, at 13,018.33. The S&P 500 lost 7.12 points, 0.17%, at 4,217.04.

— Coca-Cola announced better-than-expected profits and revenue in its latest earnings report, despite concerns about the company's stock price and shifting consumer trends. The beverage giant has faced challenges as it navigates a market impacted by inflation, which prompted the company to increase prices. However, this move led to some consumers refraining from purchasing Coca-Cola products. Despite these challenges, Coca-Cola expressed satisfaction with its recent financial results and raised its profit and revenue outlook for the year.

— Archer-Daniels-Midland (ADM) reports Q3 profit beat driven by ethanol margins and Brazilian exports. ADM exceeded Wall Street's third-quarter profit expectations. ADM's strong performance in this quarter was attributed to favorable ethanol and sweetener margins, as well as robust Brazilian crop exports. Despite lower year-on-year results, ADM has raised its full-year earnings outlook, thanks to a strong performance in the first three quarters and favorable market conditions. ADM has thrived on increased demand for food, animal feed, and biofuels. Additionally, record-large corn and soybean harvests in Brazil have offset reduced supplies from drought-impacted Argentina and war-torn Ukraine. ADM operates by processing, trading, and shipping crops globally, often capitalizing on crises such as wars or droughts that lead to shortages. ADM's largest revenue unit, the Ag Services and Oilseeds segment, experienced a 21% drop in operating profit due to the surge in South American crop exports, which reduced demand for U.S. supplies. Lower year-on-year oilseed crushing results also impacted profitability. The results of Singapore-listed agribusiness Wilmar International (ADM's joint venture partner with a 22.5% equity stake) negatively affected ADM's oilseeds sub-segment. On the other hand, ADM's Carbohydrate Solutions segment, driven by strong margins in ethanol, sweeteners, and starches, reported a 49% increase in operating profit. However, ADM's Nutrition segment reported lower results due to weak demand for meat protein alternatives and unplanned downtime at a large soy processing facility following an accident in September.

— So far this reporting season, S&P 500 earnings per share are on track for a 1.1% year over year rise, on 1.0% revenue growth, according to Refinitiv. If sustained, that would be a return to per-share profit growth after three quarters of flat or down earnings.

— Oil prices fell Monday as diplomatic efforts in the Middle East intensify aiming to contain the conflict. WTI traded down $2.59, -2.9%, to close at $85.49. Brent traded down $2.33, -2.5%, to close at $89.83. However, prices are higher today, with Brent rising above $90 and WTI trading near $86.

— Agriculture markets yesterday:

Corn: December corn fell 5 1/4 cents to $4.90 1/4, at the session low.
Soy complex: January soybeans fell 14 3/4 cents to $13.05 1/2, near the session low. December soybean meal lost $3.40 at $420.50 and near mid-range. Prices hit a four-month high early on. December bean oil closed down 145 points at 51.94 cents and near the session low. Prices hit a four-month low.
Wheat: December SRW rose 1 1/4 cents to $5.87 1/2, while HRW rose 3/4 cent to $6.70 3/4. December spring wheat rose 7 cents to $7.37 3/4.
Cotton: December cotton futures rose 133 points to 83.73 cents today and nearer the session high.
Cattle: Cattle futures plunged on active long-liquidation Monday, with the expiring October live cattle contract diving $6.025 to $178.25 and most-active December futures crashing $6.275 to $178.35. Expiring October feeder futures sank $4.20 to $237.625, with the November contract plummeting $6.425 to $235.80.
Hogs: Hog futures ended Monday on a mixed note. The nearby December contract gained 17.5 cents to $66.175, while the deferred contracts posted mixed closes.

— Ag markets today: Corn faced followthrough selling overnight, while wheat more than erased Monday’s modest gains. Soybeans posted two-sided trade. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents lower, soybeans were around a penny higher, SRW wheat futures were 5 to 6 cents lower, HRW wheat was 7 to 9 cents lower and HRS wheat was 3 to 4 cents lower. Front-month crude oil futures were modestly firmer, while the U.S. dollar index was nearly 350 points higher.

Key day for cattle futures. Monday’s hefty selloff in live cattle futures did major technical damage. Additional heavy selling today would completely flip the script and give bears the strong upper hand. But if buyers show up under the market it would suggest yesterday’s price action was an overdone bearish reaction. Volatility could be extreme as daily price limits expand to $10.00 for live cattle and $12.25 for feeders today.

Cash hogs drop, pork cutout firms. The CME lean hog index is down another 72 cents to $79.07 (as of Oct. 20), extending the seasonal downturn. The pork cutout value firmed 58 cents on Monday, marking the second straight daily gain after an extended pullback.

— Quotes of note:

“If the bond market is starting to decipher more accurately the effective fiscal position of the U.S., then we’re in trouble.” — Former CBO Director Douglas Holtz-Eakin, now president of the American Action Forum.
“It’s hard to focus on your homework when you’re thinking about how you could run all the factories in America.” — David Zhi LuoZhang, 20, who took a leave of absence from the University of Pennsylvania, to focus on his AI startup. The size of the market for generative-AI applications and the rapid pace of development have young founders ditching class for the business world.
House without a leader. “This looks like a group of 11th graders trying to pick the junior class president, and it will hurt our party long term,” said former Gov. Chris Christie of New Jersey, who is challenging Trump for the party nomination. “It’s going to be very hard to make the case that the American people should turn over control of the government to Republicans when you can’t even elect a speaker.”

— IEA warns oil demand to halve by 2050 amid energy transition, declares fossil fuels no longer 'safe or secure'. The International Energy Agency (IEA) predicts a nearly 50% decline in oil demand by 2050 if governments fulfill their commitments to transition to cleaner energy sources. This comes with a warning that investments in oil and gas are no longer secure. Fatih Birol, the head of the IEA, pointed to recent events like Russia's invasion of Ukraine, Middle East tensions, and record-breaking temperatures as evidence of the risks associated with continued reliance on fossil fuels.

Birol has persistently called for an end to new oil and gas investments, despite resistance from many industry players, including energy executives in the United States and OPEC. He stated that oil and gas cannot be considered safe or secure energy choices for countries and consumers worldwide.

This warning comes after Chevron's $53 billion purchase of Hess and ExxonMobil's acquisition of Pioneer, signaling confidence from major oil companies in the future of fossil fuels. Chevron's CEO, Mike Wirth, criticized the IEA's prediction that fossil fuel demand would peak before the end of the decade.

The IEA's report highlighted the evolving risks of over-investment in fossil fuels as governments seek to enhance energy security in the wake of the Ukraine conflict. Although there will be a surge in liquefied natural gas (LNG) projects from 2025, the risk of over-investment means that concerns about underinvestment in oil and gas supply are no longer valid.

The IEA's 2023 report projects peak demand for global oil, natural gas, and coal before 2030, with oil demand expected to drop to 92.5 million barrels per day by 2030 and 54.8 million barrels per day by 2050 if government pledges are met. However, if governments fail to follow through on their commitments and maintain existing policies, oil demand is projected to only slightly decline to 97.4 million barrels per day by 2050.

OPEC, on the other hand, predicts an increase in oil demand to 116 million barrels per day by 2045, highlighting a significant discrepancy between producer forecasts and those of the IEA.

In the IEA's scenario where government pledges are met, unabated fossil fuels are expected to account for only 32% of global energy supply in 2050, compared to 80% in 2022. Renewable energy sources, biomass, nuclear, and carbon-captured coal and gas generation would make up 66% of global energy generation.

While progress has been made in clean energy investments, the IEA emphasizes the need for more ambitious government policies to limit global warming to the critical threshold of 1.5 degrees Celsius, as outlined in the 2015 Paris Agreement. The IEA warns that global emissions are still on track to raise global average temperatures by approximately 2.4 degrees Celsius this century, leading to severe climate change impacts.

In the most ambitious "net-zero" scenario proposed by the IEA, unabated fossil fuels would only represent 12% of global energy demand by 2050. Birol also highlighted the challenge of fragmentation, citing conflicts involving Ukraine and Israel.

— Record outflows from ESG funds reflect Wall Street's waning enthusiasm amid market turmoil. Money managers witnessed a record number of closures for ESG (Environmental, Social, and Governance) funds in the last quarter, signaling a shift away from the sector amid broader market challenges like economic slowdown, higher interest rates, and a market slump. This move away from ESG-focused funds aligns with increasing regulatory scrutiny on greenwashing and deceptive claims made by investment funds. Additionally, some Republican-led states have escalated their boycotts of asset managers involved in ESG investments.

Despite the challenges, ESG investing is not disappearing but is experiencing a reduction in size. Investors withdrew $2.7 billion from ESG funds in the last quarter, marking the fourth consecutive quarter of outflows from such funds, according to data from Morningstar. A significant portion of these withdrawals came from two funds: BlackRock's iShares ESG Aware MSCI USA ETF and the Parnassus Core Equity Fund, managed by Parnassus Investments in San Francisco.

For the first time, U.S. money managers closed more ESG funds than they opened, the New York Times reports. This may be part of a long overdue shakeout: Following a three-year boom in ESG fund creation, there were 661 in operation at the end of September, up 11% since the start of the year.

Market perspectives:

— Outside markets: The U.S. dollar index was firmer, with the euro and British pound both weaker against the greenback. The yield on the 10-year U.S. Treasury note has firmed at around 4.87% but it remained off its highs from Monday that saw it initially move above 5% before falling back lower. There is a lower tone in global government bond yields. Crude oil futures were moderately higher, with U.S. crude around $85.85 per barrel and Brent around $90.20 per barrel. Gold and silver were under significant pressure ahead of economic data, with gold around $1,973 per troy ounce and silver around $22.96 per troy ounce.

— Pershing Square Holdings CEO Bill Ackman's bond short covering triggers Treasuries rally. Ackman played a significant role in sparking a sharp rally in Treasury securities when he announced on social media that he had covered his short bet on bonds. This move came as the yield on the 10-year Treasury note rose to 5% for the first time in 16 years. The 10-year yield, which influences mortgage and corporate loan rates, briefly reached 5.021% before reversing course and settling at 4.836% during the day. At the beginning of the year, the yield on the 10-year note was around 3.8%. Ackman's statement on social media, specifically on X, mentioned that there is too much risk in the world to maintain short positions on bonds at the current long-term rates. He also noted earlier that the economy was slowing more rapidly than recent data indicated.

— Bitcoin surged in value early Tuesday as investors grew excited about the prospect of exchange-traded funds based on spot bitcoin. That built on a recent rally: Monday's end-of-day level was already the highest since May 2022.

— China achieves record copper production amid strong domestic demand and softening global prices. China has maintained its record copper production levels, indicating the resilience of demand in the world's largest consumer of the metal. In September, capacity growth at smelters propelled copper production to reach 1.14 million tons, marking the second consecutive month of record-high production. This surge in domestic copper production can be attributed to the thriving renewable energy sector, which has offset weaknesses in the property market.

Conversely, international copper prices briefly dropped to their lowest levels in nearly a year on Monday, signaling weakening global demand for the metal. Despite this discrepancy between domestic and international markets, China's robust copper production highlights the country's ongoing need for this essential industrial material.

— UAW walks out of Stellantis' Sterling Jeights plant, adding 6,800 Michigan workers to strike. The United Auto Workers (UAW) initiated a walkout at Stellantis' Sterling Heights, Michigan, Assembly Plant, intensifying the Stand Up strike that has been ongoing for nearly six weeks. This action involves around 6,800 workers and has brought the total number of striking UAW workers across the nation to almost 40,000. The strike, which started on Sept. 15, has led to layoffs and an estimated loss of $9.9 billion in the auto industry. The union's discontent centers on key issues such as wage progression, temporary worker pay, and cost-of-living adjustments. Negotiations between Stellantis and the UAW continue, with both parties expressing their desire to resolve issues promptly.

General Motors pulled its full-year guidance while reporting third-quarter earnings and revenue. While the company has the fewest UAW members on strike, compared with rivals Ford and Stellantis, it’s still taking a hit. GM said Tuesday morning that the strikes, which started in mid-September, have cost it more than $800 million in pretax earnings. The UAW will focus on another number, as it seeks higher wages and better benefits: GM’s nearly $3.1 billion in quarterly profit. Ford reports earnings after the close Thursday, and Stellantis reports next week.

— Global demand for oil will reach its peak this decade, the IEA predicted for the first time, amid growing popularity of electric cars and the cooling of China’s economy. Oil gained, with Brent rising above $90 and WTI trading near $86.

— USDA daily export sale: 117,200 MT corn to Mexico during 2023=2024 marketing year

— Some trans-Pacific container lines are diverting vessels to Mexico’s Port of Lázaro Cárdenas to avoid congestion at the Panama Canal. Link for details via Journal of Commerce.

— Record high expected for U.S. soybean meal exports in 2023-24. The U.S. is on track to achieve a record-breaking year in soybean meal exports, with an estimated 13.2 million tons shipped in MY 2022-23, valued at nearly $7 billion. This surge in exports is attributed to increased soybean crush for biomass-based diesel production and expanded shipments to the European Union and Vietnam, as Argentina's soybean meal exports were hampered by drought.

Looking ahead to 2023-24, U.S. soybean meal exports are projected by USDA to set a record at 13.9 million tons. With competitive pricing compared to South American supplies and a surplus of soybean meal production, the U.S. aims to meet the global demand for this essential agricultural product.

— Indonesia to implement new rice price measures. Indonesia will introduce new measures on rice prices to ensure affordability amid concerns of a supply crunch due to dry weather, a senior finance ministry official said. The government has approached global rice exporters to make sure supply remains available while making sure prices remain under control. Indonesia will also extend the government’s rice handout program through December.

— NWS weather outlook: A significant early season winter storm will bring heavy snowfall later Tuesday through Wednesday across portions of the Northwest, Northern Rockies, and Northern Plains... ...Heavy rainfall and some areas of flash flooding will be possible for portions of the Southern Plains and Great Lakes... ...Much above average temperatures for much of the central and eastern U.S. mid-week.

Items in Pro Farmer's First Thing Today include:

     • Corn and wheat weaker, beans firmer this morning
     • Consultant’s Brazil crop estimates unchanged, but bias weakens
     • Crop progress report highlights
     • Eurozone October PMI at near 3-year low, stirring recession worries

CONGRESS

— House Republicans aim to end feuding and resume legislative work. There is guarded optimism that House Republicans will unite behind the chosen nominee after weeks of public disagreements. Lawmakers held a meeting to hear proposals from candidates who outlined their strategies for unifying the party and advancing legislative priorities, including reducing federal spending and enhancing border security. A GOP vote to select the party's nominee is scheduled, with a full House floor vote expected in the coming days.

Support seems to be coalescing around several individuals, including House Majority Whip Tom Emmer (R-Minn.), Republican Study Committee Chairman Rep. Kevin Hern (R-Okla.), House Republican conference vice chairman Rep. Mike Johnson (R- La.), and Byron Donalds of Florida, an ally of former President Donald Trump.

The large field of now eight candidates sets the stage for an unpredictable outcome, with the possibility of multiple rounds of internal House GOP conference voting. The eventual House speaker-designate will need to secure the support of a majority in the House, requiring 217 out of 433 House votes if all members participate.

— Sizing up the latest House GOP leadership candidates. Here is what the New York Times’ DealBook says about the pre-political careers of the relative unknowns vying to be speaker and lists their top donors, based on Federal Election Commission data from Open Secrets:

Tom Emmer, Minnesota: The Majority Whip ran his own law firm before running for office. He’s on the Financial Services Committee and his biggest givers are AIPAC, a pro-Israel lobbying group, and the private equity firms Bluff Point Associates and Apollo Global Management.
Austin Scott, Georgia: Scott owned an insurance brokerage. He’s on the Intelligence, Armed Services and Agriculture Committees, and his top donors are in the insurance and farming sectors, including WSR Insurance and the National Cattlemen’s Beef Association.
Byron Donalds, Florida: Donalds worked in finance and insurance, and is on the Financial Services Committee and the Oversight and Accountability Committee. His top donor is Robinhood Markets, the retail trading app.
Kevin Hern, Oklahoma: Hern was an aerospace engineer before owning a McDonald’s franchise. He is on the Ways and Means Committee and his top donors include the asset manager Blackstone, the insurer Cigna and Marathon Petroleum.
Gary Palmer, Alabama: Palmer worked in engineering construction before pivoting to policy. He’s on the Energy and Commerce Committee and the Oversight and Accountability Committee. His biggest funders are local industrial and construction companies.
Jack Bergman, Michigan: A retired Marine Corps lieutenant general, Bergman is on the Armed Services and Veterans Affairs Committees. His biggest donor is a company that helps veterans claim their benefits, followed by the financial services firm Atlanticus and the tech giant Oracle.
Mike Johnson, Louisiana: A longtime lawyer, Johnson is on the Judiciary and Armed Services Committees. His biggest givers are the pharmaceutical distributor Morris & Dickson and the software developer Praeses.
Pete Sessions, Texas: Sessions worked at Southwestern Bell Telephone and is on the Financial Services and Oversight and Reform Committees. His top donors are Bankers Life, an insurance company, and Deason Capital, an investment firm.
Bonus candidate: Patrick McHenry, North Carolina: The interim speaker is not officially running for the top role, but there is discussion about giving him the powers to conduct legislative business. He chairs the Financial Services Committee and often sides with the Chamber of Commerce in its feuds with Democratic regulators. His top donors are Apollo, Truist Financial and AIPAC.

— House lawmakers launch discussion on next Water Resources Development Act (WRDA). House lawmakers are initiating discussions on the next WRDA, a legislative framework that authorizes water-related projects managed by the Army Corps of Engineers. The discussion is scheduled to take place today during a planned House Transportation and Infrastructure subcommittee hearing. The hearing will feature appearances from key figures, including Assistant Secretary of the Army for Civil Works Michael L. Connor and Lt. Gen. Scott A. Spellmon, who serves as the Corps’ commanding general and chief of engineers. They will provide insights into past WRDAs and discuss the requirements and priorities for future legislation in this domain.

ISRAEL/HAMAS CONFLICT

— Hamas releases two more hostages, signaling potential progress in negotiations. Hamas has freed two elderly women as part of ongoing efforts to secure the release of over 200 individuals held captive since the Oct. 7 attack, which resulted in the deaths of 1,400 Israelis. This release follows the liberation of an American mother and daughter, mediated by Qatar and Egypt, just three days earlier. These positive developments have raised hopes among the families of remaining hostages, who have been urging Israel to prioritize negotiations rather than pursuing a ground invasion of Gaza, which could jeopardize further talks and potentially lead to a regional conflict. It is important to note that Israeli bombings in the Gaza Strip have reportedly resulted in the loss of over 5,000 lives, as reported by local authorities.

— Israel is willing to delay a ground invasion of Gaza for a few days to allow talks on releasing a large number of the hostages Hamas is holding there, two Israeli officials told Axios. "Both Israel and the Biden administration want to exhaust every effort to try and get hostages out of Gaza," a senior Israeli official said. "If Hamas proposes a big package, of course we will be ready to do things in return."

President Biden's team is negotiating with Israel and the Qatari and Egyptian mediators, who are talking with Hamas.

RUSSIA/UKRAINE

— Russia's Rusal buys 30% stake in Chinese alumina plant amid supply disruptions triggered by Ukraine invasion. Russian aluminum giant United Co. Rusal International PJSC has agreed to purchase a 30% stake in a Chinese alumina plant, Hebei Wenfeng New Materials Co., as a response to supply disruptions caused by Russia's invasion of Ukraine. The deal is valued at 1.91 billion yuan ($262 million), with the final price potentially adjusted based on Wenfeng's working capital and debt, but not expected to exceed 2.5 billion yuan, as stated by Rusal in an exchange filing. This move aims to secure a crucial ingredient supply for Rusal amidst ongoing global tensions.

— Ukraine’s Black Sea corridor gain exports reach 700,000 MT. About 700,000 MT of grain have been exported through Ukraine’s new Black Sea export corridor since it began operating in August, the country’s ag ministry said. Some 38 ships have entered Ukrainian ports via the corridor and more than 30 have departed with grains and other goods.

POLICY UPDATE

— USDA to tap $2.3 billion from CCC fund for trade promotion and food aid. USDA will release $2.3 billion from the Commodity Credit Corporation (CCC) to support trade promotion and international food aid programs. USDA Secretary Tom Vilsack will make this announcement today during the World Food Prize’s Borlaug Dialogue in Des Moines, Iowa, responding to a request from Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.). The funds will be allocated as follows:

$1.3 billion for the Regional Agricultural Promotion Program (RAPP) to diversify export markets and provide support to specialty crop industries.
$1 billion to address global hunger through food aid programs.

Vilsack emphasized the importance of the CCC and USDA's market development and aid programs, especially amid challenges in international commodities markets and global food insecurity. These funds will help strengthen the presence of U.S. agriculture in existing and new markets, ensuring that high-quality American agriculture and food products reach those in need worldwide.

USDA highlighted the growing agricultural trade deficit and increased competition in export markets, emphasizing the need for additional investments in market development and diversification away from dependence on a few large markets.

The funds for trade promotion and food aid will not be part of traditional programs but will instead be allocated to the RAPP to enable exporters to enter new markets and increase market share. Additionally, there will be targeted technical assistance to the specialty crops industry.

USDA said the recent challenges in supply chains and ongoing conflicts have exacerbated global food insecurity. An estimated 205 million people require life-saving food assistance, and 768 million people face chronic hunger. The U.S., with its surplus commodities, is well-positioned to address these gaps by extending food aid to those in need globally. The $1 billion donation will support efforts to combat global hunger and aid U.S. agriculture through the purchase of surplus commodities, in collaboration with the U.S. Agency for International Development (USAID).

— Emergency Relief Program (ERP) payments rise to $8.19 billion, while CFAP totals see minor adjustments. After a period of relative stability, Emergency Relief Program (ERP) payments have been adjusted higher by USDA as of Oct. 23. The total ERP payments now stand at $8.19 billion, up from the previous figure of $8.16 billion. Notably, ERP Phase 2 payments have increased to $742.99 million, compared to the earlier figure of $714.95 million. The number of payment recipients has also grown and currently stands at 9,968.

In contrast, the Coronavirus Food Assistance Program (CFAP) figures have seen minor changes, with total CFAP 1 payments edging up slightly to $11.84 billion, as opposed to the previous $11.83 billion. Most other totals within these programs have remained relatively consistent as of Oct. 23.

PERSONNEL

— Leadership changes announced for USDA's Animal and Plant Health Inspection Service (APHIS). USDA’s APHIS announced several leadership changes. Dr. Jack Shere will transition into a senior leader role, focusing on recruiting qualified and diverse veterinarians and scientists for APHIS. Dr. Donna Lalli, who has been serving as acting Associate Administrator since February, will join the Administrator's Office permanently as an Associate Administrator. Sarah Helming will permanently assume the role of Deputy Administrator for Emergency and Regulatory Compliance Services (ERCS), overseeing select agents, investigative and enforcement, biodefense, and emergency management programs. Wendy Anderson has been appointed as the new Director of the Wildlife Services Western Region, bringing her extensive experience to the role. These changes aim to enhance APHIS' effectiveness and mission delivery.

— Top aide to Sen. Elizabeth Warren joins Biden's National Economic Council. Jon Donenberg, a prominent figure in Sen. Elizabeth Warren's (D-Mass.) team, is set to become a deputy director on President Biden's National Economic Council (NEC), succeeding former deputy director Bharat Ramamurti. Donenberg's responsibilities will encompass various economic issues, including student debt relief, competition, financial regulation, and technology policy. His appointment comes ahead of the 2024 election, during which President Biden's economic plan will play a pivotal role. Donenberg has played a significant role in shaping Sen. Warren's policies related to student debt, financial regulation, taxation, competition, and technology.

CHINA UPDATE

— Economists cast doubt on China's ambitious 2035 income goal. In a recent analysis by economists Hunter L. Clark and Matthew Higgins of the Federal Reserve Bank of New York (link), China's aspiration to achieve per capita income similar to that of a mid-level developed country by 2035, as outlined by President Xi Jinping, is met with skepticism. The authors cite challenges such as population aging, diminishing returns on investment-focused growth, increased state intervention, legacy credit issues, and restricted access to foreign technologies as obstacles to this goal. They argue that, even with optimistic growth assumptions, China is unlikely to significantly bridge the income gap with high-income nations in the foreseeable future.

Bottom line: The article delves into historical data, economic models, and structural factors that may hinder China's growth prospects and concludes that achieving this goal presents formidable challenges.

— SCMP: China’s former economic tsar, Liu He, maintains influence behind closed doors amid economic challenges. In a surprising revelation, the South China Morning Report notes that sources indicate that China's retired vice-premier and trusted aide to President Xi Jinping, Liu He, has retained his role as the office director for a crucial economic policymaking body headed by Xi. Despite his low profile in the public eye, the 71-year-old remains a sought-after figure for high-ranking foreign delegations visiting Beijing, including prominent Western leaders. This unexpected continuity of political influence raises questions about how China is navigating complex economic challenges while keeping a seasoned economic expert like Liu He in the fold. Link for details.

— WSJ: China initiates charm offensive in preparation for potential Xi Jinping U.S. visit. As anticipation grows over whether Chinese President Xi Jinping will accept President Biden's invitation for a visit to the United States, China is launching a charm offensive aimed at paving the way for Xi's first U.S. trip in over six years, the Wall Street Journal reports (link). While Beijing has not yet confirmed Xi's visit, Chinese Foreign Minister Wang Yi is expected to travel to Washington for summit-preparation meetings with Secretary of State Antony Blinken this week, according to sources cited by the WSJ. Additionally, a delegation of Chinese business, cultural, and sports figures, including basketball star Yao Ming, is scheduled to arrive in New York for public engagements. This comes after recent increases in academic exchanges and efforts to promote Chinese investment during the U.N. General Assembly last month. The State Department has refrained from commenting, and China's embassy in Washington has cited an inability to comment on agendas but emphasized the significance of people-to-people exchanges, echoing statements made by both Chinese and U.S. leaders.

— China’s gov’t land sales revenue continues to drop. China’s government land sales revenue fell for a 21st month in September, data from the finance ministry showed. Land sales revenues in September fell 21.3% from a year earlier, after falling 22.2% the previous month. For the first nine months of the year, sales dropped 19.8% from a year earlier to 3.0875 trillion yuan ($422.42 billion).

— How far is China’s slowdown spreading? Ask a dairy farmer 6,000 miles away. The Wall Street Journal reports (link) weak demand among Chinese consumers for milk is rippling out to the rolling hills of New Zealand.

TRADE POLICY

— Argentina expands export incentive program as presidential front runner Sergio Massa takes lead. Sergio Massa, the current front runner in Argentina's presidential race, has announced the expansion of the country's export incentive program. The initiative, initially focused on boosting soybean and soybean products exports, will now encompass all export sectors for the next 30 days. Under this program, companies will have the opportunity to exchange 30% of their foreign currency earnings from alternative exchange markets.

Additionally, Massa expressed his support for a modification in Argentina's 2024 budget to include a primary fiscal surplus projection of 1% of GDP, up from the prior planned 0.9% of GDP.

Massa's strong showing in the initial round of voting, where he secured 37% of the vote, has surprised observers, as libertarian candidate Javier Milei, who was expected to lead, garnered 30% of the vote. The two candidates will compete in the upcoming vote on Nov. 19.

ENERGY & CLIMATE CHANGE

— USDA releases study on agriculture and forestry's role in U.S. carbon markets. USDA published a report (link) titled "A General Assessment of the Role of Agriculture and Forestry in the U.S. Carbon Markets." This report, part of the USDA's commitments under the Growing Climate Solutions Act (GCSA), provides an examination of current market activity, identifies barriers preventing farmer and forest landowner participation in carbon markets, and highlights opportunities for improvement. While recognizing the potential for agriculture and forestry to combat climate change, the report also sheds light on challenges, including high transaction costs.

— Nigeria aims to curb raw mineral exports, promoting local value addition. Nigeria plans to introduce stricter regulations to limit the export of raw minerals and encourage the export of processed mineral products. The move is aimed at boosting job creation and increasing the value of the country's exports, Bloomberg reports (link). Dele Alake, Nigeria's Minister for Solid Minerals, emphasized the need for foreign companies to establish processing factories locally, stating that minerals should not be exported without value addition within the country. Nigeria, Africa's largest crude oil producer, seeks to diversify its revenue sources as its oil output declines. The country possesses significant mineral reserves, including lithium, gold, bitumen, and iron ore, and aims to emulate nations like Indonesia in moving up the commodities value chain while boosting employment.

In the past, Nigerian governments have struggled to revive the mining and quarrying industry. Despite setting ambitious targets a decade ago, the sector contributed only 0.2% to the country's GDP in the previous year, according to PwC. Encouraging foreign companies to refine minerals within Nigeria faces challenges, such as unreliable electricity supply, weak domestic demand, and illegal mining activities. Insecurity in northern Nigeria, marked by armed gangs conducting abductions and killings and displacing local communities, further hampers mining activities.

To address these issues, the Nigerian government recently announced new regulations to combat smuggling and enhance industry oversight. Additionally, it plans to revoke mining licenses that have remained unused for 18 months. The government has also partnered with Australian authorities to train locals in the technical aspects of the mining industry, aiming to improve regulation and exploration of the country's mineral resources.

Finance Minister Wale Edun mentioned significant interest from foreign direct investors in Nigeria's solid minerals sector, expressing expectations for positive outcomes from these investments.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Highly pathogenic avian influenza (HPAI) spreads to 12 commercial turkey flocks in four U.S. states, prompting trade restrictions from Mexico. The highly pathogenic avian influenza (HPAI) situation in the U.S. has escalated as of Oct. 23, with 12 commercial turkey flocks confirmed to be affected across four states. Among the impacted counties, eight out of nine had previously reported H5N1 infections earlier in the year, suggesting the potential for the virus to become endemic in the local environment and resident wild flocks.

The outbreak has not only raised concerns about the poultry industry but has also resulted in mounting trade restrictions. Mexico, a significant destination for U.S. poultry and related products, has suspended all poultry imports from the four affected states: Minnesota, South Dakota, Utah, and Iowa.

HEALTH UPDATE

— The CDC recommends that everyone age 6 months and older get a seasonal flu vaccine each year, but fewer than half of Americans get vaccinated. To boost the nation's uptake, the agency is reviewing a nasal spray flu vaccine that can be self-administered.

POLITICS & ELECTIONS

— Chris Christie qualifies for third GOP presidential debate with adequate donor support. Former New Jersey Governor Chris Christie announced that he now has enough donors to meet the qualification criteria for the third GOP presidential debate. Christie had already been performing well in both New Hampshire and national polls, fulfilling the other half of the Republican National Committee's (RNC) qualification requirements. Christie becomes the fifth GOP candidate to secure a spot in the Nov. 8 debate in Miami. The other qualifiers include Donald Trump, who has stated his intention to skip the event, Vivek Ramaswamy, Florida Governor Ron DeSantis, and former South Carolina Governor Nikki Haley. However, North Dakota Governor Doug Burgum has the required donors but falls short in polling, while Senator Tim Scott (R-S.C.) has the polling support but lacks the necessary donors to qualify for the debate.

— Rep. Dean Phillips preparing to announce Democratic primary challenge to President Biden. Phillips of Minnesota is reportedly preparing to formally announce his candidacy. The 54-year-old congressman has been advocating for fellow Democrats to challenge Biden and is expected to make the announcement in Concord, New Hampshire, hours before the state's primary ballot deadline. The Democratic National Committee (DNC) has not sanctioned New Hampshire's primary due to the state's refusal to adhere to the DNC calendar, causing potential complications for the race. A Phillips candidacy could become a distraction for Biden, who is already facing minor primary opposition from activist Marianne Williamson and preparing for a likely rematch with former President Donald Trump. Phillips, a centrist businessman, won his House seat in 2018 by defeating a Republican incumbent in a district that had traditionally leaned GOP. He faces significant hurdles, including missed filing deadlines in some early primary states, the DNC's endorsement of Biden's re-election, and the need to gain donor support. His House seat could also be at risk if he carries through with a presidential campaign, as he already faces a primary challenge in his district.

— North Carolina Senate advances proposed congressional map that could give GOP an advantage. The Associated Press reports (link) Republicans in the North Carolina Senate have advanced a proposed map for the state’s congressional districts starting in 2024 “that could position the party to pick up at least three seats in the U.S. House next year.” On Monday, the Senate Redistricting and Elections Committee “approved a plan for North Carolina’s 14 U.S. House seats, creating 10 districts that appear to favor a Republican, three that favor a Democrat and one that could be considered competitive, according to statewide election data included with the proposal.” The Senate is expected to vote Tuesday on the proposed congressional map, and it could receive final approval in the similarly GOP-led House as early as Wednesday. Redistricting legislation cannot be vetoed by the Democratic governor.”

OTHER ITEMS OF NOTE

— Biden administration is proposing major changes to the H-1B visa program for high-skilled foreign professionals, after the government found earlier this year that companies had colluded to try to increase their chances of winning a coveted visa.

— White House on Monday designated 31 communities as technology hubs. The hubs will be able to compete for $40 million to $75 million apiece in grants. Link for more via the New York Times.

KEY LINKS

House GOP Plans More Speaker Votes

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