Different Views on Possible Ag Disaster Aid for 2022 Crops & Livestock

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U.S. equities continue to crater as weaker outlook for U.S., world economy

 

                                                In Today’s Digital Newspaper

 

Work is underway to include ag disaster aid for 2022 crops and livestock in an eventual omnibus spending measure that will come in a post-election, lame-duck session of Congress. No official word yet on the total amount, but USDA has reportedly advised Congress of the likely aid needed, if any. Sources signal a possible congressional tally of around $5 billion. But…  USDA reportedly has informed committees that they still have $3 billion unobligated of previous ag disaster funding and that they aren’t pushing for additional. More in Policy section.

The U.S. yield curve continues to invert, with some predicting it could have much more to go. Allspring Global Investments see the 2-year versus 10-year yield curve hitting negative levels not seen since the 1980s. Meanwhile, a dollar index soared to a fresh record, reflecting bets for outsize Federal Reserve interest rate hikes.

Of note: China’s currency fell below the level of 7 yuan to the dollar for the first time in more than two years.

New data shows China's economy improved slightly in August as stimulus measures kicked in but renewed Covid-19 curbs and a worsening property downturn continue to damp its outlook. Details with perspective in China section.

A key barometer of the U.S. and world economy has frequently been the outlook for FedEx. It expects rough times ahead. The delivery giant slashed its earnings forecast and said it would reduce flights and freeze hiring, after reporting disappointing preliminary quarterly results. Its CEO, Raj Subramaniam, said he expects a global recession. FedEx shares tumbled.

Former Treasury Secretary Larry Summers told a Globe Summit audience that Europe is in dire straits because of its reliance on Russian energy and China's struggles with Covid lockdowns and extreme heatwaves could cause a global slowdown.

The German government says it is taking control of Russian oil giant Rosneft’s subsidiary in Germany, citing the need to ensure continued operations at three oil refineries in the country that account for 12% of the country's oil processing capacity. The subsidiary of the Russian oil giant was placed under trusteeship on Friday, giving it federal regulatory control of the facilities in Schwedt, Karlsruhe and Vohburg. The move was executed through the German Energy Safety Act and can be renewed every six months. More in Russia/Ukraine section.

The U.S. will give Ukraine up to $600 million in additional weaponry from its stockpiles, Joe Biden said. On the ground in Ukraine, President Zelenskyy said a mass burial site was found in Izyum, recently recaptured from Russian forces.

The world is hurtling toward $1 trillion in weather-disaster damages by the time 2023 wraps up, according to a Bloomberg account. The floods, droughts, storms and fires will destroy homes, ruin crops, further disrupt shipping, hobble energy supplies and, ultimately, end lives. More below.

Think China doesn’t need more pork imports? China’s ag ministry says the price of pork in the country for the week ended Sept. 9 was up 1.2% from the previous week and 69.4% higher than last year. China will release a record 200,000 MT of pork from state reserves this month to boost supplies and stabilize prices. They will need more imports to temper the price surge.

Carbon farming: PepsiCo and ADM are partnering to implement regenerative farming practices on 2 million acres of American farmland by 2030.

President Biden will meet with the families of Brittney Griner and Paul Whelan at the White House today. This is the first time he will meet with them in person. Griner was detained in Russia in February for carrying vape cartridges containing cannabis oil in her luggage. The two-time US Olympic basketball gold medalist pleaded guilty to drug charges and said she accidentally packed the cartridges while in a hurry. She was convicted in August and sentenced to nine years in jail. Whelan has been imprisoned in Russia for more than three years after being convicted on espionage charges that he denies.

Election Day 2022 is 52 days away. Election Day 2024 is 781 days away.

 

MARKET FOCUS

Equities today: Global stock markets were mixed but mostly lower overnight. U.S. Dow is currently around 350 points lower, and at two-month lows, following a tough past four sessions, with the market set to record its fourth down week out of the last five. Traders were absorbing an ugly earnings warning from FedEx, which reported weakening global shipment volumes for its latest quarter and withdrew its full-year guidance (more on this below). In Asia, Japan -1.1%. Hong Kong -0.9%. China -2.3%. India -1.8%. In Europe, at midday, London +0.2%. Paris -1.1%. Frankfurt -1.4%.

     U.S. equities yesterday: The Dow ended down 173.27 points, 0.56%, at 30,961.82. The Nasdaq declined 167.32 points, 1.43%, at 11,552.36. The S&P 500 fell 44.66 points, 1.13%, at 3,901.35.

     FedEx withdrew its earnings forecast on worsening business conditions, dragging the broader market down Thursday in a potentially worrying sign for the global economy. The package-delivery giant flagged weakness in Asia and challenges in Europe and said conditions could deteriorate further in the current period.

     Global commodity flows, including critical supplies of fossil fuels, food, and fertilizer continue to be hampered regardless of which side is winning the fight. A new report by S&P Global Ratings estimates that war-related global energy and food shocks will last through at least 2024. Those shocks will continue to weigh on GDP and fiscal performance.

Agriculture markets yesterday:

  • Corn: December corn futures fell 4 3/4 cents to $6.77 1/2.
  • Soy complex: November soybeans fell 3 1/2 cents to $14.51 1/2, still up over 39 cents for the week. December soymeal rose $4.90 to $428.00, while December soyoil fell 57 points to 64.30 cents.
  • Wheat: December SRW wheat fell 27 1/4 cents to $8.45, after climbing overnight to a two-month intraday high at $8.84 3/4. December HRW wheat dropped 20 3/4 cents to $9.26 1/4. December spring wheat fell 9 1/4 cents to $9.28 3/4.
  • Cotton: December cotton rose 58 points at 103.29 cents, nearer the session high.
  • Cattle: October live cattle surged $1.275 to $145.625. October feeders fell 50 cents to $180.925. USDA-reported live steers averaged $142.73 the first three days this week, up from last week’s $142.48 average.
  • Hogs: October lean hogs rose $1.35 to $96.05, the contract’s highest close since Aug. 17. The CME lean hog index fell 9 cents to $97.58 (as of Sept. 13), a seven-month low, but today’s quote is expected to rise 19 cents, the first daily gain since Aug. 17.
     

Ag markets today: Corn, soybean and wheat futures extended price losses from earlier in the week during overnight trade. As of 7:30 a.m. ET, corn futures were trading around 4 cents lower, soybeans were 6 to 7 cents lower and wheat futures were 3 to 6 cents lower. Front-month crude oil futures were around 65 cents higher, and the U.S. dollar index was more than 200 points higher this morning.

Technical viewpoints from Jim Wyckoff:

     Sep 16 Corn

     Sep 16 Soybeans

     Sep 16 Crude

     Sep 16 Bonds

     Sep 16 Euro

     Sep 16 Gold

On tap today:

     • University of Michigan consumer sentiment index is expected to rise to 60 in September's preliminary reading from 55.1 in August.
     • CFTC Commitments of Traders report, 3:30 p.m. ET.

On Saturday, President Biden heads to the U.K. for Queen Elizabeth II’s funeral on Monday. While there, he’s expected to meet privately several allies, including Britain’s new PM, Liz Truss. On Wednesday, the president will address the United Nations. Meanwhile, Biden gave a sit-down interview to Scott Pelley that will air on the Sunday night season premiere of 60 Minutes. Today, Biden is planning to meet separately with the families of Brittney Griner and Paul Whelan (a pair of Americans being held in Russia) at the White House.

Inflation watch: Consumers spent 16% more on utility payments in August than they had a year earlier, according to Bank of America. The U.S. Energy Information Administration said last week that it expects retail electricity prices to surge 7.5% this year. That would be the biggest percentage jump since 2006, when prices rose 10.4% in tandem with rising natural-gas prices—the culprit this time, too. The price of natural gas, which accounts for 38% of U.S. power generation, has more than doubled so far this year.

     And unlike gasoline prices, electricity costs are going up, not down. And no relief is in sight ahead of Nov. 8 elections. This week's Consumer Price Index report showed costs for electricity in the U.S. climbed at their fastest rate in 40 years. In August, average electricity prices were nearly 16% higher than they were in August 2021. And, Over 20 million U.S. households have fallen behind on their utility bills.

     It could be worse: The U.S. benchmark for wholesale natural gas is up about 70% over the last 12 months, while the European benchmark has skyrocketed by roughly 240%. Since natural gas is the source of about 40% of U.S. electricity generation, those higher prices feed through to higher monthly bills.

Larry Summers comments on Europe, China. The U.S. and Europe are both being buffeted by high inflation. Both will likely slide into recessions this year or next. But the situation is far more dire there than here, according to Harvard economist Larry Summers, because of Europe’s reliance on Russian oil and gas. “We are largely self-sufficient in energy,” Summers told a Globe Summit audience at the Harvard Kennedy School on Thursday evening, according to the Boston Globe. “Europe is completely dependent on imports of fossil fuels.”

     Summers said Europe, especially Germany, left itself economically vulnerable by not diversifying its energy supplies. Germany relied on Russia for 55% of its gas before Russia’s invasion of Ukraine in February. Relying on Russia was “asking for trouble if you didn’t completely trust President Putin. . . which is to say you were asking for trouble,” said Summers, who served as Treasury secretary during the Clinton administration and president of Harvard from 2001 to 2006.

     Summers was asked about the impact of China’s struggles with Covid lockdowns and extreme heatwaves. He said they would reduce the country’s exports and also reduce consumption at home. “It will slow global growth,” he said of China’s economic slowdown. One plus, he said, would be a drop in commodity prices since China is a major importer of oil, soybeans, gold, and copper. However, Summers said his biggest concern was that “a weaker China may become a more truculent China.” Without increasing prosperity to keep its society together, the government may turn to nationalism and foreign scapegoating to promote cohesion, he said.

The World Bank says central banks need to be careful about raising interest rates so rapidly that they cause a global recession. Policy makers around the world have been pushing up borrowing costs to tame galloping inflation worldwide, reports the WSJ (link). Global growth is already cooling and tighter monetary policy risks accelerating the slowdown, a World Bank report said.

     Central banks

Eurozone inflation confirms record inflation in August. Eurozone inflation hit another record high of 9.1% in August, EU statistics office Eurostat confirmed on Friday, driven by sharply higher energy and food prices. Consumer price inflation in the 19 countries using the euro rose 0.6% from July. Eurostat said that 3.95 percentage points of the year-on-year change came from more expensive energy and 2.25 points from food, alcohol and tobacco. But even when excluding volatile energy and unprocessed food, core inflation still jumped 5.5% from a year earlier and was up 0.4% from July.

No fertilizer miracle. A few months ago, Scotts Miracle-Gro Co. was bracing for the biggest summer ever. After two years of struggling with production, the company had ramped up to meet consumer demand for seed, fertilizer and other garden products. But the orders never came, and now the company must find a way to deal with the excess inventory. The company is one of many that are dealing with an overhang of product, having failed to anticipate the shift in consumer purchases. Link to details via the WSJ.

Market perspectives:

     • Outside markets: The U.S. dollar index is up in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.463%. The 2-year U.S. Treasury note yield climbed to 3.901%, which is the highest level since 2007. Crude oil futures were, with U.S. crude around $85 per barrel and Brent around $91 per barrel. Gold and silver futures were weaker in electronic trading, with gold around $1,673 per troy ounce and silver around $19.05 per troy ounce.

     • Treasuries are flashing warning signs. A key part of the yield curve risks inverting to a level last seen in the early 1980s as the US inches closer to a recession, Allspring Global Investments said. Two-year yields will surge in the next six months, it projects, increasing the inversion with 10-year yields to at least 100 basis points, from about 44 bps today.

        Treasuries warning

     • Crushing soy: ADM's soybean crushing business is poised for a record 2022 profit, with crush margin looking elevated for the rest of the year, according to Bloomberg Intelligence.

     • The world has a $1 trillion La Niña problem. Weather catastrophes cost the world $268 billion in 2020, and another $329 billion in 2021, according to Aon, a data and research firm. A Bloomberg report (link) says that if the coming period looks anything like the chaos La Niña brought in 2020 and 2021, the total during the three-string run will likely come close to, or possibly even top, $1 trillion by the end of 2023. Odds that the cooling of the equatorial Pacific will linger through October have risen to 97%, according to a new forecast by the U.S. Climate Prediction Center. The chances of La Niña sticking around through January are 80%. The last string of three La Niñas was 1998-2001, and before that 1973-1976, according to Michelle L’Heureux, a forecaster and scientist specializing in the phenomenon for the U.S. Climate Prediction Center. While some of the $1 trillion total isn’t tied directly to La Niña, the phenomenon, along with climate change, is what’s setting the terms. “La Niña is like the conductor of a weather symphony,” L’Heureux said.

     • Alaska is bracing for what has been described by forecasters as the strongest storm to impact the state in more than a decade. The system — the remnants of Typhoon Merbok — is expected to bring hurricane-force winds, torrential rain and enormous waves to Alaska's west coast today and this weekend.

     • NWS weather: There is a Slight Risk of severe thunderstorms over parts of the Central Plains through Saturday morning... ...There is a Marginal Risk of excessive rainfall over parts of the Northern Rockies/Northern High Plains, Florida, and Upper Mississippi Valley/Upper Great Lakes through Saturday morning.

        NWS 091622

Items in Pro Farmer's First Thing Today include:

     • Followthrough selling overnight
     • Russian wheat export tax declines again
     • Coceral cuts EU wheat, corn production forecasts
     • China’s economy perks up but property sector remains a concern (see China section)
     • Cash cattle market firms
     • Cash hog index ends long string of declines

 

RAIL DEAL OR POSSIBLE STRIKE UPDATE

— Update:

  • Union members hold final say on us rail deal, or possible strike. Marathon talks led to a tentative agreement Thursday. What happens next depends on more than 100,000 workers represented by a several different unions, who’ll have to decide whether to ratify their leaders’ deals or reject them, setting the stage for a massive work stoppage.
  • The tentative deal, the text of which hasn’t been publicly released, included record wage increases and new protections but didn’t include paid sick days workers had sought, according to union leaders. The tentative freight-rail agreements include a 24% wage increase over five years, 2020 through 2024, including 14.1% effective immediately, as well as five annual $1,000 payments, the National Carriers’ Conference Committee said.
  • The cooling-off period in which work stoppages are prohibited has been extended to last several weeks past when workers vote to accept or reject its terms, White House press secretary Karine Jean-Pierre said. A timeline for those votes has not been released.
  • The dilemma: Union members are likely to weigh the viability of pulling off a successful strike and the political impact it could have before the midterm elections, as well as how much the tentative deal does to address their core concerns, said Wilma Liebman, a former deputy director of the Federal Mediation and Conciliation Service and former chair of the National Labor Relations Board.
  • Another try: The International Association of Machinists and Aerospace Workers union says it is now working to get a new agreement after its members rejected a tentative deal that had been struck earlier.
  • Some agreement: The BLET, the International Association of Sheet Metal Air, Rail & Transportation Workers, and the Brotherhood of Railroad Signalmen have all now agreed to the tentative pact, according to the National Carriers’ Conference Committee, which represents national freight railways in bargaining. Together, the three speak for about 60,000 workers, it said in a statement.
  • Feel the Bern? Sen. Bernie Sanders (I-Vt.) said in a statement: “Now it’s up to the rank-and-file union members to evaluate this deal and determine whether it works for them. These workers have not had a raise in three years and continue to work incredibly long hours under brutal working conditions. I will respect and support whatever decision they make.”
  • Freight railroads immediately restored services they had suspended earlier in the week. Union Pacific Corp. and Norfolk Southern Corp. said they are working to resume normal operations after halting some service in anticipation of a work stoppage.
  • Bottom line: The deal, if approved, could raise shipping costs as railroads try to recoup their added labor costs, analysts said. But it could improve service, which has suffered from capacity and labor shortages.

 

RUSSIA/UKRAINE

— Summary: The Biden administration said it would send an additional $600 million of arms to Ukraine, including more High Mobility Artillery Rocket Systems — guided missiles that have wreaked havoc on Russia’s army. The U.S. has given Ukraine around $15 billion in military assistance since the start of the war. Meanwhile, the Kremlin warned that if America supplied Ukraine with longer-range missiles, it would cross a “red line” and become “party to the conflict.”

  • Ukrainian authorities have found 440 graves at a mass burial site in Izium, an eastern city recently recaptured from Russian forces, Ukraine's Defense Ministry said in a Twitter post today. "We want the world to know what is really happening and what the Russian occupation has led to," Ukraine's President Volodymyr Zelensky said, adding that Ukrainian and international journalists will be shown the site to see what had been uncovered. Izium was subject to intense Russian artillery attacks in April and was taken back by Ukrainian forces on Saturday, delivering a strategic blow to Russia's military assault in the east.
  • Germany seized control of three refineries belonging to Rosneft, Russia’s state-owned oil giant. The economy ministry said that a federal regulator will take over the operation of the units, which account for around 12% of the country’s oil processing. The move will counter the “impending threat to the security of energy supply” from Russia, argued the ministry. Link to more details via Reuters.

    Germany is also in advanced talks to take state ownership of Uniper and two other large gas importers known as VNG and Securing Energy for Europe (formerly Gazprom Germania). The three are central pillars of the country's key energy infrastructure, managing, storing and directing flows. Teams of traders at the companies also buy and sell billions of euros in energy contracts each year to keep the market humming and stable.
  • Want free fertilizer? Russia said it would provide developing countries for free what more than 300,000 tonnes of Russian fertilizer stuck in European ports. During remarks in Uzbekistan at the Shanghai Cooperation Organization summit, Putin also said that Europe had only “partially” removed sanctions against Russia that are negatively impacting their ability to sell fertilizer on the global market. He also stated that Russia was increasing its grain exports, but did not offer details.
  • Ukraine storage: Russia has destroyed, damaged or seized control of 14% of Ukraine’s crop storage capacity since invading in February, according to a U.S. government-backed report. Researchers examined satellite images of 344 storage facilities — out of almost 1,400 nationwide — and concluded that Ukraine’s grain storage capacity fell to 49.8 million metric tons, down from a pre-war capacity of 58 million metric tons. The report (link) was released by the Conflict Observatory, a group established in May with financial backing from the State Department. Link to State Department statement.

 

POLICY UPDATE

— How much ag disaster aid for 2022 crops and livestock will wind up in an eventual omnibus spending measure? USDA has reportedly informed Congress of the amount needed, if any, but no official word yet. With $10 billion announced for a combined 2020 and 2021 crops and livestock aid package, a 2022 tally around $5 billion appears likely, at least from farm-state lawmaker ideas. However, USDA reportedly has informed committees that they still have $3 billion unobligated of previous ag disaster funding and that they aren’t pushing for additional.

     Comments: The final ag disaster tally could and should include aid for rice producers to give them a fair shake at past omissions, sources advise. Also, recall the recent White House request for $1.5 billion in ag disaster aid. Coupled with the apparent $3 billion in unobligated prior ag disaster funding, that could be why USDA has reportedly signaled no additional aid funding is needed. But farm-state lawmakers will have their own ideas.

— White House releases a “comprehensive” framework for overseeing digital token, mandated by President Biden’s March executive order. Missing from the report were any clear timeline or specific rules and proposed legislation for how to regulate such assets. Yesterday, a pair of Senate hearings highlighted how a key regulatory question remains unresolved.

     When is a token a security, and when is it a commodity? Sen. Pat Toomey (R-Pa.), the top Republican on the Banking Committee, asked that question of the SEC chair, Gary Gensler. The answer depends on how you interpret a 20th century Supreme Court ruling involving Florida orange grove investments. Interpretations vary. Gensler contends that the “vast majority” of crypto tokens are securities under that test. But the CFTC’s chair, Rostin Behnam, took the opposite position yesterday.

     While Gensler faced hard questions from Republicans, Behnam had an easier time when he appeared before the Senate agriculture committee, the New York Times notes. The Senate Ag panel held a hearing on a bill covering the regulation of cryptocurrencies. The legislation (S 4760) would put the CFTC in charge of regulating digital assets considered to be digital commodities, but witnesses at the hearing called on the panel to clarify or further define what constitutes a digital commodity. Behnam’s stance is that “most” crypto tokens are commodities. The “vast majority” vs. “most” debate is a bigger deal than it sounds. Crypto lobbyists fear it could further muddle the regulatory future of tokens. Sheila Warren, CEO of the Crypto Council for Innovation, said that leaving it up to the CFTC, Securities and Exchange Commission (SEC) and courts to make that determination would not be workable.

     Senate Ag Ranking Member John Boozman (R-Ark.) tweeted he looked forward to working on the legislation to get it ready for consideration by the panel.

     White House is murky on the matter. When questioned at a press briefing about the different positions held by the SEC and CFTC, one senior administration official said they were “in some ways competing,” but argued that both agencies already have the authority they need to police crypto. “I don’t think there’s a tension,” the official said.  

 

PERSONNEL

— Biden reportedly to name estate tax experts as IRS’s top lawyer. President Biden is likely to nominate Beth Kaufman, a partner at the law firm Caplin & Drysdale, to be the top lawyer at the Internal Revenue Service as the White House prepares to overhaul the agency’s leadership, according to people familiar with the matter.

— Pekoske cleared as TSA chief. David Pekoske was confirmed by the Senate for another term as head of the Transportation Security Administration (TSA) via a vote of 77-18 Thursday.

 

CHINA UPDATE

— China’s economy perks up but property sector remains a concern. China’s economy showed surprising resilience in August amid faster-than-expected growth in factory output and retail sales. Industrial output grew 4.2% in August from a year earlier, the fastest pace since March. Retail sales rose 5.4%, the largest year-over-year increase in six months. However, the property sector contracted further in August as home prices, investment and sales extended losses. Property investment last month fell 13.8%, the fastest pace since December 2021. New home prices fell 1.3% year-on-year in August, the fastest since August 2015. The Chinese economy faces more difficulties this year compared with 2020, but it is likely to maintain a recovery trend for the whole of 2022, Fu Linghui, a spokesman at the National Bureau of Statistics said.

     Perspective: In August last year, China was battling Delta outbreaks, disrupting consumer spending and industrial production. So, comparisons to year ago need to be put in perspective. On a month-to-month basis, the recovery looks less impressive: In seasonally adjusted terms, retail sales were down 0.05% m/m in August. Industrial value-added output increased by just 0.32% m/m in August, slower than the 0.38% rise in July. And the pick-up in economic activity was also very focused on areas that have enjoyed stimulus.

— The Chinese currency has fallen below a closely-watched threshold of 7 yuan to the dollar in offshore trading in Hong Kong for the first time in more than two years. The yuan has fallen largely because the Federal Reserve’s interest rates have pushed up the value of the dollar. The yuan could fall further as China’s economy continues to struggle. Previous yuan weakness caused investors to move money out of China. But authorities have closed many of the loopholes that once allowed money to be moved out of the country.

     Yuan

— Chinese pork prices surge. China’s ag ministry says the price of pork in the country averaged 30.69 yuan ($4.43) per kilogram for the week ended Sept. 9, up 1.2% from the previous week and 69.4% higher than last year. China will release a record 200,000 MT of pork from state reserves this month to boost supplies and stabilize prices. 

 

ENERGY & CLIMATE CHANGE

— White House releases plan to cut construction carbon emissions. The Biden administration said Thursday it will tell agencies and federally-funded projects to buy low-carbon types of steel, concrete, asphalt, and flat glass. Taken together, those four materials account for nearly half of all domestic carbon emissions from the manufacturing sector, and 98% of the government’s construction materials purchases, according to the White House.

— Biden plans floating platforms to expand offshore wind power. The plan would target sites in the Pacific Ocean off the California and Oregon coasts, as well as in the Atlantic in the Gulf of Maine.

— Carbon farming: PepsiCo and ADM are partnering to implement regenerative farming practices on 2 million acres of American farmland by 2030. Link for details.

 

HEALTH  UPDATE

Summary:

  • Global Covid-19 cases at 611,038,123 with 6,523,438 deaths.
  • U.S. case count is at 95,585,483 with 1,052,939 deaths.
  • Johns Hopkins University Coronavirus Resource Center says there have been 612,781,120 doses administered, 224,636,858 have been fully vaccinated, or 68.18% of the U.S. population.  

 

POLITICS & ELECTIONS

A no-surprise October surprise: The House Jan. 6 committee plans to hold a hearing late this month and release early findings and recommendations before the election, Axios reports. The committee will meet virtually today to plan the rest of their schedule, including upcoming hearings, members told Axios. "We sunset Dec. 31," Chairman Bennie Thompson (D-Miss.) told reporters this week. Members told Axios that while their final report will likely come after the election, plenty of news could be made before. Thompson told Axios the time between an expected Sept. 28 hearing and the election "won't be a quiet period": "The goal is to have … some information pushed out, obviously, before the November election." The panel may release its interim report in that window.

— NYT/Siena poll: Democrats up 2 points in generic ballot. Democrats have a two-percentage-point edge in the generic congressional ballot, 46% to 44%, among registered voters in a New York Times/Siena College survey. That’s about the same as in their last poll, in July, when Democrats led by one point.

     President Biden’s approval rating up. His rating is now 42%, up from 33% percent in the last poll. Neither Biden nor his agenda is especially popular, the poll suggests. Voters are about evenly divided over student loan forgiveness; many don’t even know about the Inflation Reduction Act. Link for details.

— Trump warns of violence if indicted. Former President Trump said that if he were indicted, "I think you’d have problems in this country the likes of which perhaps we've never seen before… That's not inciting," Trump told conservative radio host Hugh Hewitt. "I don’t think the people of this country would stand for it ... [I]t would just tear this country apart."

 

CONGRESS

— House members have only seven legislative days on the schedule before they leave until the midterm elections. That’s one less than initially planned, as leaders canceled votes today in absence of a resolution to fund the government.

     The Senate is scheduled to come back for two weeks in mid-October, but there’s speculation the work period weeks might be canceled to give lawmakers more time on the campaign trail. Sen. Debbie Stabenow (D-Mich.), a member of Democratic leadership, said she anticipated the Senate will be in session for at least a portion of the two-week stretch, in part to work through the backlog of more than 40 judicial nominees. “Judges are really a driving force for us,” Stabenow said, adding that “leadership will have to think long and hard about” canceling the October work days.

— CR/stopgap spending bill update. House Majority Leader Steny Hoyer (D-Md.) said Thursday that the House could begin consideration of a short-term spending bill next week, but it’s clear there is still lots to iron out before then. Sen. Roy Blunt (R-Mo.), a member of the Senate Defense spending panel, called Ukraine money the “most likely additional thing” to get tacked onto the bill to keep the government funded.

— Remember when Congress was going to make daylight saving time permanent? The sun might be setting on the congressional effort to make daylight saving time permanent. The Senate passed the bill — unanimously — five months ago. But in the House, there’s a holdup. "The problem is we can't get a consensus. Some people wanted standard time. Some people wanted daylight saving. Some say split the difference, but there's no consensus. We can't move anything unless there is a consensus," Rep. Frank Pallone (D-N.J.), said Thursday.

— Dimon, Moynihan, other bank CEOs to appear before Senate panel Sept. 22. Jamie Dimon of JP Morgan Chase and Brian Moynihan of Bank of America are expected to appear in a Senate Banking Committee hearing titled “Annual Oversight of the Nation’s Largest Banks” on Sept. 22, according to a committee release.

 

OTHER ITEMS OF NOTE

Cotton AWP edges back higher. The Adjusted World Price (AWP) for cotton rose to 95.17 cents per pound, effective today (Sept. 16), an increase from 94.92 cents per pound the prior week, the second consecutive week the AWP has been back below $1 per pound. Meanwhile, USDA announced that Special Import Quota #22 would be established Sept. 22 for 55,633 bales of upland cotton, applying to supplies purchased no later than Dec. 20 and entered into the U.S. not later than March 20.

— Biden spokesman calls Chinese land buys near military bases ‘homeownership issue.’ White House spokesman John Kirby dismissed questions about foreign land buys close to U.S. military bases and potentially tied to the Chinese Communist Party (CCP), calling it a “homeownership issue.” Kirby, National Security Council coordinator for strategic communications, tried to handle the topic during a Sept. 13 briefing about Chinese entities “buying up U.S. real estate” including “farms around military installations,” given that some could link to the country’s ruling regime. The matter concerns a corn mill investment by a Chinese company in the city of Grand Forks, North Dakota — sitting within 15 miles of the Grand Forks Air Force Base that houses sensitive drone, satellite, and surveillance technology. The top executive of its parent company had also served as a member of the CCP’s rubber-stamp legislature of Shandong Province, China. Kirby initially said “the question of homeownership is a little bit out of [his] swim lane.” Pressed further, the former Pentagon spokesman shifted the focus to Biden’s foreign trade policy, saying that “the president has been nothing but clear about our concerns about Chinese unfair trade practices and economic practices.” When told the topic wasn’t about trade, Kirby said, “​​I’m probably not the right person to ask about homeownership here in the United States.” White House press secretary Karine Jean-Pierre then said the White House could “get back to [the reporter] afterward.”

     What the Biden spokesman should have said. President Biden directed the Treasury-led committee that scrutinizes foreign investment in America to consider the national security impact any deals would have on U.S. technological leadership, including biotechnology and “elements of the agricultural industrial base that have implications for food security.” Treasury Secretary Janet Yellen said the order would sharpen the focus of the Committee on Foreign Investment in the United States (CFIUS) “on protecting America’s national security while maintaining the U.S. open-investment policy.” The CFIUS, created in 1975, would consider five factors when assessing a transaction: the impact on U.S. supply chain resiliency, the effect on U.S. technological leadership, investment trends that could affect national security, cybersecurity risks, and risks to Americans’ personal data. Link to a White House fact sheet on the order. Link to the executive order.

 

KEY LINKS


WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | Student loan forgiveness | Russia/Ukraine war, lessons learned | Election predictions: Split-ticket | Congress to-do list |


 

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Friday Wrap Up | September 23, 2022

Davis Michaelsen and Editor Brian Grete discuss this week's market action...

After the Bell | September 23, 2022

Corn, soybean futures plunge to two-week lows on surging dollar, escalating recession concerns; wheat also down sharply.

Cattle on Feed Report mostly neutral

Both placements and marketings were near the top end of pre-report estimates.

Dollar Continues Bull Run | September 23, 2022

Prolonged drought plagues China, Russia opens polls in Ukraine and the British pound taps long-time low...