USDA readies next Trump tariff aid payouts
— Bolton: Intellectual property rights to be ‘major subject’ of U.S./China trade talks. The U.S. has had enormous concerns for years "about the practice of Chinese firms to use stolen American intellectual property to engage in forced technology transfers, and to be used, really, as arms of the Chinese government's objectives in terms of information technology in particular,” U.S. national security adviser John Bolton said in an interview with National Public Radio. "Huawei is one company we've been concerned about," Bolton said. "There are others as well. I think this is going to be a major subject of the negotiations that President Trump and President Xi Jinping agreed to in Buenos Aires."
Huawei Technologies' Chief Financial Officer Meng Wanzhou is scheduled to appear in a Vancouver court today for a bail hearing as she awaits possible extradition to the United States. The arrest in Canada of Meng came at the U.S. request over indications that the firm has run afoul of sanctions against Iran.
While Bolton said he knew ahead of the meeting between President Trump and Xi that the U.S. was about to arrest Meng Wanzhou, he was not sure that Trump was aware. The White House later said that Trump did not know about the arrest when he met with Xi.
— USDA in 'final steps' on second and final farmer aid payments under the Market Facilitation Program (MFP), USDA Undersecretary for Marketing and Regulatory Programs Greg Ibach said in Chicago on Thursday. "The aid package is still very much something that is on the table at USDA," Ibach told reporters after addressing the American Seed Trade Association (ASTA). "The secretary is working through the final steps with the president to make that final determination."
Despite the discussion, Ibach said there will not likely be much change in the calculations the agency used to make the first round of payments that are projected at $4.7 billion. "I think big changes in those formulas are hard to justify because we need to stay within our WTO obligations as well," he said. USDA still views the second round of payments under the one-time aid plan as "probably appropriate," Ibach said.
— USDA working on two key GMO-related regs. USDA is poised to release its plan on GMO labeling soon and is also working on its plan to update the rules regarding regulation of GMO crops, according to USDA Undersecretary for Marketing and Regulatory Programs Greg Ibach.
The Office of Management and Budget (OMB) cleared the GMO labeling final rule last week, with Ibach saying at an American Seed Trade Association (ASTA) meeting Chicago that it should come in the "near future" — by January 1. Sources indicated the rule was not going to be released immediately by USDA after it cleared OMB and Ibach's comments appear to back up that expectation. Ibach pointed out USDA has already been sued before the reg has been finished and "that creates more headaches for USDA." Consumer groups filed suit against USDA for missing a July deadline set forth in law to finalize the rules. Ibach reiterated that USDA is hoping to time the GMO labeling requirements with the FDA update to the Nutrition Facts on product labels so that food manufacturers only have to go through redesigning labels once. "We are hoping to meet that target for that reason," he commented.
Meanwhile, Ibach said a separate rule updating USDA regs covering GMO crops is ready to be made public in a few weeks. USDA has already met with some 85 groups on the topic. Some of the groups are "very positive" on biotechnology, but others, he noted, are "skeptical" on the topic. The public portion of the rulemaking is hoped to be started "in the next few weeks and months.” USDA's focus on the update will cover the "needs of the entire industry," Ibach commented, from farmers to consumers and can hopefully be implemented over the next several years. USDA last updated the rules covering GMO crops in 1987.
— Other items of note:
The House and Senate passed a measure to keep the government running for two more weeks, sending it to President Trump's desk for his signature. The measure funds parts of the government through Dec. 21.
Insurance flexibility for harvest delays. USDA’s Risk Management Agency (RMA) is providing flexibility for farmers who are unable to complete harvest prior to Dec. 10, the end date for insurance policies covering most spring-planted crops, including corn and soybeans. Farmers should contact their insurance agent. Under RMA’s guidance, approved insurance providers may allow additional time to harvest when the following conditions are met:
* Farmers give timely notice of loss to their crop insurance agent;
* The approved insurance provider determines and documents that the delay in harvest was due to an insured cause of loss;
* Farmers demonstrate that harvest was not possible due to insured causes; and
* The harvest delay was not due to a lack of sufficient equipment or manpower to harvest the crop by the end of the insurance period.
— Markets. The Dow on Thursday had a wild ride, down nearly 800 points at one time, but rallying to still close lower but considerably off the lows. The Dow fell 79.40 points, 0.3%, to 24,947.67, and the S&P 500 lost 4.11 points, 0.2%, to 2,695.95. Both indexes are modestly higher for the year. The Nasdaq Composite added 29.83 points, 0.4%, to 7,188.26, bringing the technology-heavy index’s gains for 2018 to 4.1%.
Equities came back in part on a report by the Wall Street Journal which said Fed officials still think the broad direction of short-term interest rates will be higher in 2019, but as they push up their benchmark, they are becoming less sure of how quickly they will need to act or how far they will need to go.
Focus today will be on this morning’s Employment report. Economists expect employers added 198,000 jobs during November and unemployment held at 3.7%. Analysts expect a further acceleration in average hourly earnings, estimating wages advanced 3.2% for the month from a year earlier. The labor force participation rate will be another attention point as it rose to 62.9% in October. Expectations remain that the Fed will still increase rates at its Dec. 18-19 meeting, but the CME FedWatch tool is now at 74.9% odds for a rate boost, down from over 80% recently.