Biden Wisconsin Visit to Focus on Infrastructure; Dairy Payment Announcement Now Not Expected

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Disaster for U.S. spring wheat crop | Brazil corn crop hits another snag | Paraguay corn hit

 


In Today’s Digital Newspaper


 

Market Focus:
• Biden’s infrastructure snafu brings a changed focus to Wisconsin trip
• Is Vilsack really going to dairy-state Wisconsin without a direct payment announcement?
• China equity funds experienced a large outflow last week
• Gas price 92 cents higher than a year ago; still higher prices predicted

• Bunker surcharge producing hefty earnings for container carriers
• Canadian farmers anticipate planting more acres of canola, barley, soybeans & lentils
• Prices for hogs in the U.S. are tumbling…
• … But some U.S. hog industry observers say USDA is missing something big
• Torrid temperatures are being felt across the U.S. Pacific Northwest
• How dry is it for California farmers?
• Big weather concern for Paraguay’s corn crop; frost/freeze for Brazil corn crop
• U.S. spring wheat ratings continue to plunge as a disaster in the making
• Ag demand update

• Corn and soybeans under pressure, but spring wheat soaring
• Frost/freeze the latest ding for Brazil’s battered safrinha corn crop
• Cordonnier sticks with his Brazilian corn crop estimate, but worried about cold snap
• Solid heat wave for the western Corn Belt likely the latter half of July
• Cordonnier maintains U.S. crop pegs, but bias is to the downside
• Spring wheat CCI rating continues to fall
• Consultancy raises Russian wheat crop forecast
• EU’s soft wheat exports lagging year-ago by 27%
• Big drop in beef movement
• Pork and cash hog bids moving in opposite directions

Policy Focus:
• Direct payment for dairy producers may not be unveiled today in Wisconsin
• Biden to sell infrastructure, “human” infrastructure spending in Wisconsin visit
• McConnell: Biden should urge Schumer, Pelosi to delink infrastructure, reconciliation bills
• Strategy to get both infrastructure and reconciliation measures passed and into law
• CFAP 2 payments edge up to $13.74 billion
• White House drafting executive order targeting anti-competitive behavior
• Schumer to Biden: Cancel student debt

China Update:
• China trade practices continue under scrutiny at WTO
• Brazil pushing for more details in China’s new soybean standards proposal
• China's leadership straining to dial back “Wolf Warrior” approach to foreign policy

Trade Policy:
• U.S. potato growers push Biden administration on Mexico import practices
• U.S./EU civil aircraft dispute ‘solution’ still reveals tensions between the two

Energy & Climate Change:
• Biofuels coalition does not expect surge in refinery exemptions following SCOTUS ruling

Coronavirus Update:
• Johnson & Johnson in talks to speed vaccine delivery to India

Other Items of Note:
• Two government antitrust lawsuits against Facebook dismissed by federal judge
• North Korean dictator Kim Jong Un has lost weight… why that may be important

 


MARKET FOCUS


 

Equities today: Global stock markets were narrowly mixed overnight. The U.S. stock indexes are pointed toward mixed openings. In Asia, Japan’s Nikkei 225 fell 0.8%, while the Hang Seng Index fell 1%. In mainland China, the Shanghai Composite Index fell 0.9%. European equities were mostly up at midday.

     U.S. equities yesterday: The Dow finished down 150.57 points, 0.44%, at 34,283.27. The Nasdaq gained 140.12 points, 0.98%, at 14,500.51. The S&P 500 was up 9.91 points, 0.23%, at 4,290.61.

     Stocks

     The market values of tech giants Apple, Amazon, Facebook and Google-parent Alphabet now total over $6.6 trillion — or about 17% of the S&P 500.

     China equity funds experienced their largest outflow last week since the first week of the year, according to EPFR, after weaker-than-expected consumption and business investment data and a Covid-19 outbreak in a key export hub.

On tap today:

     • U.S. home prices for April are due at 9 a.m. ET.
     • Conference Board Consumer Confidence Index for June, due at 10 a.m. ET.  is expected to register an increase. U.S. consumer confidence held largely flat in May at 117.2 following four straight months of increases. Economists expect it to have stayed roughly level again in June at 118.7.

Schumer to Biden: Cancel student debt. Senate Majority Leader Chuck Schumer (D-N.Y.) again called on the Biden administration to cancel $50,000 in federal student loan debt for borrowers. President Biden has said he is unsure if he has the authority to make the move by executive action. Canceling the debt by that amount would write off more than $700 billion in student debt and would completely cancel student debt for 36 million borrowers.

Market perspectives:

     • Outside markets: The U.S. dollar index is higher as the euro, yen and British pound are all weaker versus the U.S. currency. The yield on the 10-year U.S. Treasury note has firmed to trade around 1.49% with a mixed tone in global government bond yields. Gold and silver futures are lower ahead of the U.S. market day. Gold is trading around $1,770 per troy ounce and silver around $26.00 per troy ounce.

     • Crude oil markets are narrowly mixed ahead of U.S. trading, with U.S. crude nearly steady around $72.90 per barrel and Brent slightly higher around $74.25 per barrel. The declines essentially match losses registered in Asian trading where U.S. crude was down 39 cents at $72.52 per barrel and Brent was down 46 cents at $73.68 per barrel.

     • Gas price 92 cents higher than a year ago. The U.S. average price for a gallon of gasoline rose 2.5 cents from last week to $3.09 per gallon Monday, according to the travel and fuel price tracking app GasBuddy. The national average is now almost 5 cents higher than a month ago and 92 cents higher than at this time last year. GasBuddy petroleum analyst Patrick De Haan says Americans should expect to pay even more at the pump heading into the Fourth of July, a popular road trip holiday weekend. This month, the Energy Information Administration predicted gasoline would average $2.92 a gallon for the April-September summer driving season, up from $2.07 a gallon for the same period last year. For the full year, the EIA estimates regular gasoline will average $2.77 a gallon and U.S. households will spend $570 more on fuel than they did last year.

     • Bunker surcharge producing hefty earnings for container carriers. Surging demand and accelerating freight rates are generating record earnings for global container carriers and the companies are also reaping the benefits of another billion-dollar revenue source. The bunker surcharge adds up to another $1.2 billion in annual revenue for container carriers. The Bunker Adjustment Factor or BAF is an additional surcharge levied on the ship operators to compensate for the fluctuations in fuel prices. It was imposed to make up for the extra charges incurred during the shipment of goods.

     • Canadian farmers anticipate planting more acres of canola, barley, soybeans and lentils compared to 2020 levels, while seeding intentions for wheat, dry peas, corn for grain and oats have declined, according to a Statistics Canada survey released on Tuesday. The survey, conducted between May 14 and June 11, 2021, found that the intentions may be influenced by high global demand for oilseeds and soybeans.

     • Prices for hogs in the U.S. are tumbling in the wake of China’s announcement that the country’s herds have recovered from the African swine fever (ASF), the Wall Street Journal notes (link). Through last week, the most-active hog futures contract trading on the Chicago Mercantile Exchange has fallen nearly 17%, bringing the price down to 99 cents a pound — the first time it has fallen under a dollar since March. Futures posted a slight rebound Monday, rising 3% to $1.03 a pound. U.S. prices for pork cutouts — parts of the pig such as loin or ribs — have posted a steep dive in recent weeks. Loin prices have fallen 15% in the past 10 days, while ribs have declined more than 31%. Pork butt — commonly used for pork barbecue — has declined 14%, while pork bellies, used to make bacon, have dropped 18% in that time. Driving the decline is the Chinese government’s declaration that it has rebuilt hog herds devastated by an outbreak of African swine fever in 2018. The outbreak forced the nation’s hog producers to cull roughly 40% of its hog population. The nation’s agricultural ministry now says that its hog herd is back to more than 98% of its predisease levels — which was roughly 420 million head. The recovery comes well ahead of schedule, as China wasn’t projected to complete this rebuild until 2023.

        Hogs

     • But some U.S. hog industry observers say USDA is missing something big in the hog sector: the devastating impact of PRRS. Some note plenty lots of empty finishers. Says Jim Long, President-CEO, Genesus Inc.: “PRRS 144 is ripping production base in the Midwest. Up to 25% sow mortality, up to 40 -50% wean to finish deaths. It’s really nasty. It’s a terrible situation for too many producers. Maybe we are missing something but doesn’t seem much appetite to build new sow barns with 30% increase in building costs, high feed prices, labor issues, and uncertainty of hog market future.”

     • Torrid temperatures are being felt across the U.S. Pacific Northwest, triggering some power outages and more wildfires. The extreme weather is also threatening more vulnerable populations like the elderly and homeless, as well as those without air conditioning. Only about 44% households in Seattle have AC, according to the U.S. Census Bureau, as the climate there is usually temperate (highs in June average 71 degrees). The extreme temperatures began at the weekend, with mercury in the Emerald City hitting an all-time high of 108 degrees Fahrenheit on Monday. According to the National Weather Service, it was also the first time Seattle topped 100 degrees for multiple days in a row. Meanwhile, temperatures in Portland, Oregon, soared to 116 F, while the heat wave is now moving into Idaho, where temperatures above 100 are forecast in Boise for the next week. The severe weather comes about a week after record temperatures hit parts of the Great Plains to coastal California, which exacerbated an existing drought situation.

     • How dry is it for California farmers? The New York Times has an article (link) titled “It’s Some of America’s Richest Farmland. But What Is It Without Water?” It says, “A California farmer decides it makes better business sense to sell his water than to grow rice. An almond farmer considers uprooting his trees to put up solar panels. Drought is transforming the state, with broad consequences for the food supply.”

     • NWS weather outlook: Historic heat wave continues across interior sections of the Northwest and Northern Rockies... ...A stagnant airmass over the central United States will lead to additional chances for flash flooding from the Southern High Plains to the Middle Mississippi Valley today and Wednesday... ...Oppressive heat found across the Northeast and Mid-Atlantic to end the month of June before a cold front approaches the region on Wednesday, accompanied by the threat of severe weather.

        NWS
        Wx

     • Now it’s concern for Paraguay’s corn crop. While a frost/freeze is the latest drag for Brazil’s safrinha corn crop, other note that temps in Paraguay dropped low enough that some are considering 50% of the corn crop has some sort of damage.

     • U.S. spring wheat ratings continue to plunge as a disaster in the making. USDA yesterday pegged the good-to-excellent crop ratings for spring wheat at only 20%. You have to go back to the major drought year of 1988 to find a tally in the single digits. That year the spring wheat yield was 19.5 bushels per acre, around a 43% decline from the then average yield. Some analysts are penciling in a 20% to 30% or more yield reduction from average this year… and a likely double-digit price peak for the crop.

     • Ag demand: Egypt’s state grain buyer bought 180,000 MT of wheat from Romania in an international tender yesterday. Thailand tendered to buy up to 197,799 MT of animal feed wheat. Tunisia issued an international tender to buy 100,000 MT of soft wheat and 100,000 MT of animal feed barley from optional origins.

Items in Pro Farmer's First Thing Today include:

     • Corn and soybeans under pressure, but spring wheat soaring
     • Frost/freeze the latest ding for Brazil’s battered safrinha corn crop
     • Cordonnier sticks with his Brazilian corn crop estimate, but worried about cold snap
     • Solid heat wave for the western Corn Belt likely the latter half of July
     • Cordonnier maintains U.S. crop pegs, but bias is to the downside
     • Spring wheat CCI rating continues to fall
     • Consultancy raises Russian wheat crop forecast
     • EU’s soft wheat exports lagging year-ago by 27%
     • Big drop in beef movement
     • Pork and cash hog bids moving in opposite directions

 


POLICY FOCUS


 

— Direct payment for dairy producers may not be unveiled today in Wisconsin by USDA Sec. Tom Vilsack when he visits the state with President Joe Biden. While a payment is coming, some sources signal a changed focus for the trip to help sell the recently announced bipartisan infrastructure package — especially after Biden had to walk back comments that he would only sign an infrastructure measure in tandem with a reconciliation bill loaded with spending (“investment”) items pushed by far-left Democrats.  But veteran observers continue to note that when a gov’t official, especially a USDA secretary, goes to Wisconsin, they usually have something to announce about dairy policy.

     Biden will promote both the physical infrastructure bill and the multitrillion-dollar “human infrastructure: bill that Democrats will try to pass under reconciliation procedures, the White House said Monday. According to the White House, Biden “will travel to La Crosse, Wis., to highlight the benefits the bipartisan Infrastructure framework will deliver to communities across the country.” Biden will tour La Crosse Municipal Transit Utility in La Crosse before speaking. Biden told a virtual fundraising dinner on Monday that the infrastructure package would create millions of good-paying jobs and help U.S. firms to compete in the global economy. "We're in a race for the 21st century, for who is going to have the strongest economy," Biden told the event hosted by the Democratic National Committee. "And the rest of the world's not waiting around. We have more to do, and we have to move fast."

     White House Press Secretary Jen Psaki said in Biden will “keep actively making the case for this agreement and getting it over the finish line. And he’s also going to continue to make the case for his American Families Plan, which we’re also fighting to pass through the two-path approach that we’ve been discussing with all of you.”

     Included in Biden’s and perhaps Vilsack’s message will be making sure all Americans have access to broadband. Psaki noted that the pending bill includes an expansion of broadband internet access. “It’s a national disgrace that African American families are 9% less likely to have high-speed Internet than their white peers, and Latino Americans are 15% less likely. It will help address that,” Psaki said.

     As for Vilsack, some wonder if he will comment on the Wisconsin suit against the socially disadvantaged farmer debt forgiveness… usually public officials refrain from cases in litigation… and Vilsack is a lawyer. But that didn't stop him from lashing out in response to the Florida case in which he questioned where those farmers were when the discrimination was going on against Black and socially disadvantaged farmers.

— McConnell: Biden should urge Schumer, Pelosi to delink infrastructure, reconciliation bills.  Senate Minority Leader Mitch McConnell (R-Ky.) on Monday released a statement calling on President Biden to request that Senate Majority Leader Chuck Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) agree to delink the bipartisan infrastructure bill from the reconciliation bill that contains much of the “human infrastructure” spending proposed by the White House. In his statement, McConnell said, “The president has appropriately delinked a potential bipartisan infrastructure bill from the massive, unrelated tax-and-spend plans that Democrats want to pursue on a partisan basis. Now I am calling on President Biden to engage Leader Schumer and Speaker Pelosi and make sure they follow his lead.”

     “Unless Leader Schumer and Speaker Pelosi walk-back their threats that they will refuse to send the president a bipartisan infrastructure bill unless they also separately pass trillions of dollars for unrelated tax hikes, wasteful spending, and Green New Deal socialism, then President Biden’s walk-back of his veto threat would be a hollow gesture,” McConnell stressed. “Republicans have been negotiating in bipartisan good faith to meet the real infrastructure needs of our nation. The president cannot let congressional Democrats hold a bipartisan bill hostage over a separate and partisan process.”

— If infrastructure and reconciliation measures are both passed, here is how that will likely unfold, based on conversations with insiders:

  • Pelosi has indicated that she will not take up any Senate-passed infrastructure measure without reconciliation first passing the Senate. Those thinking Pelosi will not hold up the measure should recall how she delayed a pandemic aid measure for months to get what she and other Democrats wanted — this time the want list includes climate change provisions and additional tax credits and subsidies for families, home health workers and college students.
  • White House and Democratic congressional leaders will make sure centrist Senate Democrats like Sens. Joe Manchin (D-W.VA.) and Krysten Sinema (D-Ariz.) and others get significant funding and programs for their states, enough to make sure they vote for reconciliation. “It probably will not be everything our most progressive members want,” said Sen. Chris Coons (D-Del.), a close ally of the president. “It will probably be more than what some of our moderate members want.”
  • The final key is to convince Sen. Bernie Sanders (I-Vt.) to vote for reconciliation if the final price tag is “only” $2 trillion or $1.5 trillion, a level signaled by Manchin to get his support. Sanders will also get a likely promise of something big.

     Bottom line: Biden is attempting to simultaneously satisfy liberal Democrats and secure a bipartisan breakthrough, which requires major legislative acrobatics. He initially appeased progressives by promising to link the bipartisan deal with a second Democrats-only bill that would address issues such as child and elder care, stating that he wouldn’t sign one without the other. But when moderate Republicans who’d negotiated the deal’s framework with White House officials threatened to pull their support, Biden issued a lengthy statement walking it back. Insiders say the tandem strategy was in place all along, but Biden just fouled up and said it out loud. Pelosi told reporters last week there “ain’t” going to be a bipartisan bill up for a vote in the House without a companion reconciliation bill, appears unlikely because it could prompt an uprising from the more liberal members of her conference, who aren’t inclined to back a scaled-down bipartisan package without reassurances a second, larger package will follow. Of note, House, Rep. Alexandria Ocasio-Cortez (D-N.Y.) signaled in an interview Sunday that her party, not the GOP, holds the White House and majorities — however slim — on Capitol Hill. And in this case, it is Schumer and Pelosi who have the final say on strategy.  As for Biden, he recently pointed to the larger-than-expected $1.9-trillion covid aid package he enacted in as proof of his progressive bonafides. And he predicted that his legislative high-wire act will succeed because Democrats will understand the procedural hurdles of legislating and, ultimately, accept the outcome. “My party is divided, but my party is also rational,” he said. “If they can’t get every single thing they want, but all that they have in the bill ... before them is good, are they going to vote ‘no’? I don’t think so.”

— CFAP 2 payments edge up to $13.74 billion. Payments approved under the Coronavirus Food Assistance Program 2 (CFAP 2) have moved up to $13.74 billion as of June 27 from $13.73 billion the prior week. Payments include $6.28 billion in acreage-based payouts, $3.45 billion for livestock, $2.73 billion for sales commodities, $1.22 billion for dairy and $63.21 million for eggs/broilers.

     CFAP 1 payments were little changed at $10.58 billion.

— White House drafting executive order targeting anti-competitive behavior. In an exclusive, Reuters reports (link) the White House “is working on an antitrust executive order that aims to push government agencies to consider how their decisions will impact competition in an industry, according to two sources familiar with the matter.” Reuters adds the order “goes after corporate monopolies across a broad swath of industries ranging from banking to airlines, one of the sources said,” while Politico (link) says it is “aimed at promoting competition throughout the U.S. economy, a move aimed at lessening the stranglehold of dominant players in industries ranging from banking and agriculture to shipping and air travel.” Politico adds the order, which “could be issued as soon as this week,” fits “with a growing theme for President Joe Biden, who has elated progressives by appointing advocates of tougher antitrust enforcement to top jobs,” and “would also mark a big shift in the government’s approach to the concerns about monopolies that have swelled during the 21st century: No longer content to just enforce antitrust laws, the Biden administration would use federal power to actively spark competition in a vast array of businesses.”

     Politico adds: “The move would come after increasing pressure to address a slew of antitrust concerns, including within the meat producing industry. The pandemic and recent JBS hacking by Russia has highlighted the potential pitfalls of meat producer consolidation.”

 


CHINA UPDATE


 

China trade practices continue under scrutiny at WTO. China’s trade policies on canola from Canada and wine from Australia have led to those issues being raised at the WTO. China rejected an initial request by Canada for a dispute settlement panel to be established over China’s restrictions on imports of Canadian canola, which Canada maintained at a WTO meeting Monday were not based on science and were unfairly deployed by China. The country rejected Canada’s first request for a panel, a move it is allowed to do under WTO rules, maintaining their actions were to protect human and plant health, actions allowed under the WTO. Meanwhile, Australia formally requested consultations over China’s antidumping and countervailing duties it imposed on Australian wine. The Australian request sets off a 60-day period for consultations, but few expect any solution to emerge in that timeframe.

— Brazil pushing for more details in China’s new soybean standards proposal. In February, China proposed changes to its national soybean standard to the World Trade Organization, with discussions underway about replacing the current standard that was set in 2009. Brazil is asking China to clarify certain aspects of the new standard that changes quality requirements for the grain, Glauco Bertoldo, director of Brazil’s agriculture ministry's inspection services department for vegetable products, said at a recent event. “Our first impression is that the Brazilian market will not be significantly affected,” Bertoldo said. And he says the new Chinese norm seems to be “less rigorous” regarding quality parameters. But there is some concern about China’s new maximum moisture level proposal of 13%, which is under Brazil’s 14% threshold.


— China's leadership is straining to dial back the country's chest-thumping “Wolf Warrior” approach to foreign policy, afraid it has begun to undermine national interests. Link to more details via the WSJ.

 


TRADE POLICY


 

— U.S. potato growers push Biden administration on Mexico import practices. The National Potato Council (NPC) is calling on the Biden administration to keep pushing Mexico in the dispute over their potato import actions. While a recent Mexican Supreme Court ruling was “significant progress” in the dispute, the NPC said, “there are serious concerns about the long-term prospects for successful market access for U.S. potatoes in Mexico.”

     NPC contends that Mexico’s potato cartel CONPAPA is “exerting great political pressure” to impede competition from the U.S. They noted Mexico’s SENASICA in April changed the U.S. fresh potato import protocol without notification to the U.S. and involves additional sampling of U.S. potatoes to be sent to a lab selected and paid for by CONPAPA. “The clear goal of this unilateral change is to manufacture a reason to close the market to US fresh potatoes at some point in the future,” NPC said in the letter to USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai.

     Vilsack is currently scheduled to meet with Mexican Agriculture Secretary Víctor Villalobos Arámbula in early August where issues on GMO corn, glyphosate and the potato trade situation are expected to be key topics.

— U.S./EU civil aircraft dispute ‘solution’ still reveals tensions between the two. Even as the U.S. and European Union (EU) agreed to a five-year suspension of trade action in the dual civil aircraft dispute involving Airbus and Boeing, the two clashed a bit during a WTO Dispute Settlement Body (DSB) session June 28 in Geneva. The U.S. challenged the EU to provide status reports in the matter after the EU requested a status update on a separate trade issue. The U.S. said the EU was being contradictory in asking the U.S. for a status update over U.S. antidumping and countervailing duty transfers to the domestic industry under the Continued Dumping and Subsidy Offset Act of 2000. The EU countered it is only required to provide status updates at certain stages in the dispute settlement process and the portion of the dispute related to Airbus was still pending appeal and therefore they were not required to provide a status update. This shows that even the “agreement” reached between the two sides, there is still steps needed before the situation is totally resolved.

 


ENERGY & CLIMATE CHANGE


 

— Biofuels coalition does not expect surge in refinery exemptions following Supreme Court ruling. Following the U.S. Supreme Court decision last week that struck down part of a 10th Circuit Court decision curtailing EPA’s ability to grant small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS), several biofuel and corn groups hosted a call Monday (June 28) and said they do not expect the move will result in a surge in new waivers issued by the agency. Participating in the call were four groups that had urged the nation’s highest court to uphold the 10th Circuit decision: the Renewable Fuels Association (RFA), National Corn Growers Association (NCGA), American Coalition for Ethanol (ACE), and the National Farmers Union (NFU).

     Calling the decision “a disappointing outcome for us,” RFA President and CEO Geoff Cooper said that nonetheless the coalition does not believe it will “reopen the floodgates on [SREs], like we saw under the previous administration.” He noted that while the Supreme Court struck down a requirement that refineries must have maintained a continuous string of SREs since 2011 to be eligible for future waivers, it left intact other key aspects of the 10th Circuit holding.

     Two other “pillars” of the 10th Circuit decision still stand, explained Cooper. The first of those pillars held that EPA can only grant SREs — which require a finding of “disproportionate economic harm” from RFS compliance — only if associated harm is caused by the RFS itself and not outside factors like market shocks, weak demand or other outside economic factors.

     The second pillar, said Cooper, “is that EPA really must reconcile any decisions to grant exemptions with the agency's long-standing position that refineries of all shapes and sizes… pass through their RFS compliance costs, they pass through their [Renewable Identification Number (RIN)] costs, in the prices of their refined products.” He added that those two aspects of the 10th Circuit decision left standing mean “it's going to be difficult or impossible for refiners to really establish that the RFS itself is somehow harming them.”

     Regarding the Biden administration’s approach to biofuels, Cooper noted that EPA announced earlier this year that it supported the 10th Circuit decision—including the portions still in effect—and RFS and other members of the coalition expect the agency “will adopt the other two pillars to the 10th Circuit decision and continue to wind down the [SRE] program.” Looking ahead, Cooper voiced hope that EPA will issue “a clear statement of direction… that they do intend to honor and adopt those other two holdings from the 10th Circuit decision, and to do so on a nationwide basis.”

     Besides a narrow ruling on just one part of the 10th Circuit decision, the Supreme Court also did not address several other points raised in ongoing litigation around the RFS, noted Matt Morrison, a partner at Pillsbury Winthrop Shaw Pittman LLP who led the coalition’s legal strategy in the case. One is the issue of whether EPA must recover or redistribute volumes exempted using SREs. “That's what the statute specifically says, that EPA must ensure the statutory volumes are met and this has been an issue that's an important part of a few pieces of litigation still ongoing,” explained Morrison. Members of the biofuels coalition “are looking forward to working with EPA, as it reconsiders its method of setting standards to account for these exemptions if not ending them,” he added.

     A key, said Morrison, is how EPA addresses the issue in upcoming Renewable Volume Obligations (RVOs) for 2021 and 2022, which “should be coming out any day now.”

     Cooper was asked whether there were any new developments relative to transparency around SRE petitions from refiners — including the 70 now pending before EPA. Biden EPA Chief Michael Regan has committed to greater transparency under the RFS, noted Cooper. “EPA in the past had actually proposed, not once but twice, to disclose certain basic information around the identity and location of the refiners receiving these exemptions, as well as some other very basic information regarding these exemptions,” noted Cooper. “That's something we strongly support.” There is also legislation pending in Congress looking to achieve the same sorts of disclosures, he added.

     Cooper said RFA believes EPA may be looking at reviving the transparency proposal “to provide those disclosures around SREs.” He said the group does not “have exact information or details on timing and when we might see that,” but said it is “pretty confident that the EPA is going to be more of an open book when it comes to who is getting these exemptions and exactly why” going forward.

     An ongoing SRE probe by the Government Accountability Office (GAO) is also being monitored, added ACE CEO Brian Jennings. “That investigation began in January 2020, so it's ongoing,” he remarked. While the Trump administration was not cooperative with the GAO, “it's our understanding that [the Biden] EPA is now providing all the materials submitted by these small refineries to justify petitions — all the documents used by the Department of Energy, for example, to score those petitions.”

     On the question of whether legislation is needed to curb EPA authority on SREs — a position suggested by Sen. Chuck Grassley (R-Iowa) — Cooper reiterated the coalition’s belief that the parts of the 10th Circuit ruling still in effect should have a potent effect on their own. “The political wrangling will continue, I agree with that statement,” said Cooper, adding that EPA must still reconcile the 10th Circuit ruling with its approach going forward on SREs. “So, I don't think that this is entirely back in the political realm,” he remarked.

     Upshot: Cooper said, “we really don't expect there to be any appetite to legislate on the Renewable Fuel Standard as a consequence of the Supreme Court decision—whether that's on the issue of small refinery exemptions, or whether that's on the issue of 2023 and beyond, [and] the so-called ‘reset rule.’”

 


CORONAVIRUS UPDATE


 

Summary: Global cases of Covid-19 are at 181,464,256 with 3,930,657 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 33,640,573 with 604,115 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 324,414,371 doses administered, 153,776,118 have been fully vaccinated, or 46.8% of the total U.S. population.

— Johnson & Johnson in talks to speed vaccine delivery to India. Johnson & Johnson announced Tuesday it is in talks with the Indian government to come up with ways to speed delivery of its single-shot Covid vaccine to the country. The Economic Times reported earlier Tuesday that Johnson & Johnson would no longer undertake local trials of the vaccine in India after the government there opted to end bridging clinical trials for vaccines approved by regulators in other countries.
 


OTHER ITEMS OF NOTE     


— Two government antitrust lawsuits against Facebook were dismissed by a federal judge. One filed by the FTC was found “legally insufficient” because it didn’t plead enough allegations to support monopolization claims, but the commission has 30 days for an amended filing. A suit brought by 46 states was dismissed in its entirety, largely on the grounds of tardiness. The rulings came before pretrial proceedings had progressed. Monday, Facebook’s stock-market value broke $1 trillion for the first time.

— North Korean dictator Kim Jong Un has lost weight, puzzling Korea watchers and causing an upwelling of concern among North Koreans — at least as reflected in state media.

     Kim


 

 

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