Fed Moves Up Expected Timeline for Raising Interest Rates

( )

Did Vilsack signal RFS change via interview with AgriTalk?

 


In Today’s Digital Newspaper


 

Market Focus:
• Fed surprises some traders even though signals were clear before
• New jobless claims at 412,000 were more than expected
• Yellen defends Biden budget plan
• U.S. and European Union plan to cooperate more
• India puts plan on hold to reduce edible oil import duties: Reuters

• Memphis Bridge traffic jams continue
• Heatwave across western U.S. expected to become more severe
• Weather outlook  
• USDA daily export sale: 135,000 MT soybean cake &meal to Philippines for 2020-21
• Ag demand update

Grain and soy futures slump amid rain and dollar strength
• Brazil’s soybean exports to date running near in line with year-ago
• Pace of Argentine soybean sales have nearly caught up to year-ago  
• APK-Inform trims wheat crop forecast for Ukraine, raises corn crop projection
• Reports Argentina nearing a deal on beef exports
• Beef market slides as cash prices climb
• Exports in focus for lean hog market

Policy Focus:
• Bipartisan infrastructure plan gains support
• U.S. antitrust regulators challenging Aon’s proposed acquisition of rival Willis Towers Watson
• Vilsack blasts lawsuits from trying to block loan forgiveness for selected minority farmers

Biden Administration Personnel:
• Senate vote today on Beaudreau for number two Interior post
• EPA water office nominee wins Senate confirmation

China Update:
• China cancels new-crop soybean, cotton buys
• Chinese surveillance cameras targeted by FCC on security worries
• National security police in Hong Kong arrested top editor of pro-democracy newspaper
• China launches three astronauts to staff its new space station

Trade Policy:
• U.S./U.K. announce five-year suspension of tariffs in civilian aircraft dispute

Energy & Climate Change:
• Is USDA’s Vilsack hinting at a reduction in RFS levels?
• Democratic lawmakers push EPA on reports of RFS waivers
• Bill to mandate disclosure of climate risks passes
• GM speeds up its electric-vehicle production targets

Livestock, Food & Beverage Industry Update:
• Senate Ag panel sets June 23 hearing on cattle market/industry

Coronavirus Update:
• CureVac’s Covid-19 vaccine falls short

Politics & Elections:
• Democratic candidates for mayor of New York City held final debate
• Obama Presidential Center could see a late-summer groundbreaking

Congress:
• Juneteenth is about to become a national holiday
• Manchin lists demands for voting rights bill 

• Democrats mull plan to push immigration changes
• Trump-era asylum rules eased in violence case

Other Items of Note:
• Cyberwarfare takes center stage in Biden-Putin talks
• U.S. North Korea policy; N. Korea crops hit by floods  

 


MARKET FOCUS


 

Equities today: U.S. stock futures are signaling a lower open. Global stock markets were mostly down overnight following the hawkish FOMC meeting results from the Federal Reserve Wednesday afternoon (see related item below) that roiled many markets, including equities. In Asia, equities finished mostly lower, tracking declines in US equity markets Wednesday. The Nikkei was down 272.68 points, 0.93%, at 29,018.33. The Hang Seng Index was up 121.75 points, 0.43%, at 28,558.59. European equities are mixed in early trade activity. The Stoxx 600 was down 0.2% with regional markets seeing gains of 0.2% to losses of 0.5%.

     U.S. equities yesterday: The Dow dropped 265.66 points, 0.77%, at 34,033.67. The Nasdaq declined 33.17 points, 0.24%, at 14,039.68. The S&P 500 lost 22.89 points, 0.54%, at 4,223.70.

     Stocks

On tap today:

     • U.S. initial jobless claims for the week ending June 12 are expected to fall to 360,000 from 376,000 the prior week. (8:30 a.m. ET) Update: New jobless claims at 412,000 were more than expected — 3.5 million workers remain on jobless benefits.
     • Philly Fed Manufacturing report (8:30 a.m. ET)
     • USDA Weekly Export Sales report, 8:30 a.m. ET
     • Leading Indicators report (10 a.m. ET)
     • U.S. Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee (10 a.m. ET)

Fed signals earlier rate increase as pent-up demand fuels a rise in prices. The Federal Reserve signaled Wednesday that it would probably slightly boost interest rates earlier than expected in response to economic growth and a surge in prices that has sparked inflation fears. Fed officials left the central bank’s main interest rate near zero and said it would continue to make massive purchases of Treasury and mortgage bonds to support financial conditions and the recovery.

     The Fed’s updated economic projections indicated that significantly more Fed officials now see a rate hike coming next year or in 2023. In March, most Fed officials expected no rate change through 2023.

     “The process of reopening the economy is unprecedented,” Fed Chair Jerome Powell said at a virtual news conference. “Shifts in demand can be large and rapid, and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expect.”

     IHS Markit, a forecasting firm, predicts the U.S. economy will grow at an annual rate of 11% in the current quarter, slowing only to a rapid 8.5% pace in the final three months of the year.

     If inflation should stay high, Powell said, the Fed could always make adjustments in its easy-money policies, including its main lever, interest rates. In their latest projections Wednesday, Fed officials said inflation would hit 3.4% this year, up a full point from their March forecast. Still, most Fed officials continue to believe that inflation will fall back to about their 2% target next year.

     Inflation

     Inflation background

     Perspective: In March, most policymakers indicated that the Fed’s benchmark interest rate would probably stay near zero through 2023. But their new projections show that 13 out of 18 Fed members expect some rate hikes occurring by 2023.

     Fed rates forecast

     Taper timeline. This summer, Powell is expected to lay out a plan for scaling back the Fed’s monthly program of buying $120 billion of Treasury and mortgage bonds, which has held down long-term rates and supported the housing and stock markets.

     Powell said there are a lot of uncertainties about the path of the labor market as well as inflation. “This is an extraordinary, unusual time,” he said. “We really don’t have a template or any experience of a situation like this, and so I think we have to be humble about our ability to understand the data.”

     Bottom line of FOMC and presser: The Federal Reserve is signaling a faster-than-expected pace of policy tightening. Yesterday’s dot plot suggested two rate hikes by the end of 2023 and Chair Jerome Powell said it was the “talking-about-talking-about meeting” in reference to the discussion on tapering. The action the bank did take yesterday was to raise by 5 basis points the rate on its overnight reverse repurchase-agreement facility and the interest paid on excess reserves, amid the growing dollar glut in short-term funding markets.

Yellen defends Biden budget plan. U.S. Treasury Secretary Janet Yellen defended the Biden administration's $6 trillion budget proposal for fiscal year 2022 before the Senate Finance Committee, saying ambitious fiscal policy would help counter racial inequality and climate change. Yellen said investments in paid family leave, infrastructure, reducing emissions and making housing and education more affordable would lead to long-term economic benefits.

U.S. and European Union plan to cooperate more on technology regulation, industrial development and bilateral trade, European Commission Executive Vice President Margrethe Vestager told the WSJ (link for details and see below for a related item).

Market perspectives:

     • Outside markets: The U.S. dollar index is higher in the wake of the U.S. Fed meeting conclusion Wednesday with the euro, yen and British pound all weaker versus the U.S. currency. The yield on the 10-year U.S. Treasury note is nearly unchanged, trading just under 1.57%, while global government bond yields are firmer. Gold prices tanked to a five-week low, the U.S. dollar index rallied sharply and hit a two-month high and bond and note yields up-ticked. Gold and silver futures are seeing sizable losses ahead of U.S. trading. Gold is trading under $1,790 per ounce and silver under $26.50 per troy ounce.

     • Crude oil futures remain lower ahead of the U.S. trading start but have lifted off lows seen in Asian trading. U.S. crude is trading around $71.95 per barrel while Brent is trading around $74.10 per barrel. Futures were under pressure in Asian action, with U.S. crude down 64 cents at $71.51 per barrel while Brent was down 70 cents at $73.69 per barrel.

     • USDA daily export sale: 135,000 metric tons soybean cake &meal to Philippines for 2020-21.

     • India puts plan on hold to reduce edible oil import duties: Reuters. India has opted to not move forward on a plan to cut import duties on edible oils as prices for cooking oil in the country have now eased back from record levels, according to government and industry officials cited by Reuters. The country had been considering reducing duties after domestic soyoil and palm oil prices move than doubled the past year. “We are not cutting import duties now, a more longer-term solution has to be found,” said a government official with knowledge of the situation, Reuters said. “Cutting duties is not a sustainable solution.” The downturn in prices from recent lofty levels also factors into the decision, even though they remain around double year-ago marks. Another official told the news service that proposal could be revived in a bid to protect farmers and consumers. Around two-thirds of edible oil demand in India is met through imports, with the country putting a duty of 32.5% on palm oil imports and 35% on crude soybean and soyoil.

     • Memphis Bridge traffic jams continue. Repair work on a nearly 50-year-old bridge that spans the Mississippi River has jammed traffic for over a month, hampering the region’s economic recovery and further straining the U.S. supply chain.

     • A heatwave across the western U.S. is expected to become more severe, raising the risk of wildfires and heat deaths in an area already experienced drought conditions. Several states have issued excessive heat warnings, and roughly 200 million people will experience temperatures over 90 degrees Fahrenheit as the week goes on. Power grid officials of economic powerhouses California and Texas have asked residents to limit energy usage to prevent outages. Meteorologists expect the heat wave to begin to subside early next week. Compounding the problem, about 54% of the West is experiencing an extreme drought, according to the U.S. Drought Monitor, with nearly 27% suffering from an exceptional drought, a more dire classification. (The New York Times is out today with an article (link) titled Climate Change Batters the West Before Summer Even Begins.)

        Weather

     • Weather outlook: Dangerous and record-breaking heat will continue across portions of the West and Central Plains, along with fire danger... ...Severe thunderstorms and heavy rainfall causing flash flooding are possible throughout the Midwest today and Ohio Valley on Friday... ...Tropical rains and potential for flash flooding are expected to approach the central Gulf Coast beginning Friday...

        NWS

      • Ag demand: Japan’s ag ministry bought 109,062 MT of food-quality wheat from the U.S., as well as 74,660 MT from Canada and 23,750 MT from Australia.

Items in Pro Farmer's First Thing Today include:

     • Grain and soy futures slump amid rain and dollar strength
     • Brazil’s soybean exports to date running near in line with year-ago
     • Pace of Argentine soybean sales have nearly caught up to year-ago  
     • APK-Inform trims wheat crop forecast for Ukraine, raises corn crop projection
     • Reports Argentina nearing a deal on beef exports
     • Beef market slides as cash prices climb
     • Exports in focus for lean hog market

 


POLICY FOCUS


 

— Bipartisan infrastructure plan gains support. Prospects for a bipartisan deal improved yesterday as 21 senators, including 11 Republicans, signed onto a bipartisan framework for a $579 billion package. Such legislation would still need support from nearly all 50 Democrats in the chamber unless more Republicans sign on, and it includes a funding mechanism —indexing the national gasoline tax to inflation —- that the White House has opposed. There are a “lot of preconditions” from Republicans and Democrats both, so getting an overall deal “will be a challenge,” Sen. Mark Warner (D-Va.), a member of the negotiating group, said after a meeting with White House officials to discuss the latest outline of a compromise.

     Bottom line: According to a draft proposal, the bipartisan plan would include $579 billion in new spending — including $312.8 billion for roads, bridges, public transit, and other transportation projects, and $266.2 billion for power, broadband, water, and other types of infrastructure. The new spending would be paid for through a variety of methods, including public-private partnerships, increased IRS tax enforcement, repurposing unused Covid-19 relief funds, and indexing the gas tax to inflation.

— Department of Justice filed its first antitrust action since President Biden took office, to block the proposed merger of Aon and Willis Towers Watson. It argued that combining two of the three largest insurance brokers would create an anticompetitive “behemoth.” The $30 billion transaction would “eliminate substantial head-to-head competition and likely lead to higher prices and less innovation,” the department’s complaint said.

— Vilsack blasts lawsuits from trying to block $4 billion loan forgiveness for selected minority farmers. Lawsuits to block $4 billion in loan forgiveness for minority farmers show a lack of historical awareness, USDA Secretary Tom Vilsack said at the BIO online convention on Wednesday. “It’s a wonder where those farmers were over the last 100 years, when their Black counterparts were being discriminated against and didn’t hear a peep from white farmers about how unfortunate that circumstance was.”

     Background. As previously reported, a federal judge in Wisconsin has blocked USDA from carrying out the debt relief program while he considers a lawsuit claiming the payments would be unconstitutional racial favoritism. District judge William Griesbach may decide as early as next week whether an injunction against the USDA is appropriate. Four other similar cases have been filed in other states.

     “To have a fair shot,” said Vilsack, “we provided debt relief” to counterbalance decades of bias in USDA programs and to help Black, Hispanic, Native American, Alaska Native, and Asian American farmers cope with the disruptions of the pandemic. “Now we are having white farmers stepping up and asking why they’re not included in this program,” said Vilsack. “Well, it’s pretty clear why they’re not included — because they’ve had the access of all the programs for the last 100 years. … It’s important, I think, for us to acknowledge the cumulative effect of discrimination, and this is one way that Congress is directing us to do that.”

     USDA on Wednesday asked for public input “to identify barriers that people of color and underserved communities and individuals may face in obtaining information” from the department. The request, made in the Federal Register, asked for public comment by July 15. Link for details.

     USDA plans to create a Racial Equity Commission later this year to focus on systemic impediments to fair treatment in its programs.
 


BIDEN ADMINISTRATION PERSONNEL


 

— Senate vote today on Beaudreau for number two Interior post. The Senate will vote around midday on the nomination of Tommy Beaudreau to be deputy secretary at the Department of Interior. He is expected to easily win confirmation after the procedural vote in the chamber to take up the nomination was approved 89-9.

— EPA water office nominee wins Senate confirmation. The Senate voted yesterday (June 16) to confirm Radhika Fox, the Biden administration’s nominee to head up the EPA’s Office of Water. Fox was confirmed by a 55-43 vote, making her the first woman of color and the first person of Asian American descent to lead the Environmental Protection Agency’s water office. One of her initial tasks will be ironing out a new definition of what qualifies as a federal waterway.
 


CHINA UPDATE


 

China cancels new-crop soybean, cotton buys. U.S. export sales activity for China the week ended June 10 included net reductions of 43,000 tonnes of soybeans (new sales of 20,000 tonnes but cancellations of 63,000 tonnes) and cancellations of 8,800 running bales of Upland cotton that had sold for 2021-22.

     For 2020-21, activity included net sales of 6,036 tonnes of corn, 63,014 tonnes of sorghum, 2,527 tonnes of soybeans and 4,409 running bales of Upland cotton.

     For 2021, there were net reductions of 422 tonnes of pork (net sales of 1,600 tonnes but cancellations of 2,000 tonnes) but net sales of 3,581 tonnes of beef.

— Chinese surveillance cameras targeted by FCC on security worries. U.S. regulators are poised to ban products from Huawei and four other Chinese electronics companies, including surveillance cameras widely used by American schools but linked to oppression in western China, stepping up pressure on tech suppliers alleged to be security risks.

— National security police in Hong Kong arrested the top editor of a popular pro-democracy newspaper and searched the newsroom, in the most targeted action involving a media organization’s journalistic operations yet in a yearlong crackdown on dissent.

— China launched three astronauts to staff its new space station. It is a milestone in the country’s rapidly expanding program, which is being promoted as a source of national pride. Beijing will carry out 11 missions over the next two years to complete the construction of the orbital outpost and expects the three-module station to be fully operational by 2022. It's part of a broader ramp-up for China's space program, which continues to operate a rover on the far side of the moon and just put another one on Mars.

     China is also accelerating plans for government-sponsored satellites to beam the internet from space. It's looking to launch 10,000 satellites in the next five to ten years as part of its "StarNet" constellation, using a similar strategy that it took on Earth with Huawei and 5G. That would put it on course to compete with private sector companies in the U.S —  like SpaceX's Starlink and Amazon's Kuiper — which are looking to blanket the globe.
 


TRADE POLICY


 

U.S./U.K. announce five-year suspension of tariffs in civilian aircraft dispute. Following on the lines of the compromise announced earlier this week with the European Union (EU), the U.S. and U.K. reached agreement to suspend tariffs they have imposed over the Airbus/Boeing dispute. The agreement with the U.K. is said to be nearly identical to the one reached with the EU earlier this week on the topic. The U.S./U.K. accord includes establishing a working group on large civil aircraft with each side agreeing to provide any financing to aircraft firms will be “on market terms” and that research and development funding will be provided “though an open and transparent process.” The two will also jointly analyze and address “non-market practices of third parties that may harm their respective large civil aircraft industries.” The five-year tariff suspension applies from July 4. 

     U.S. Trade Representative Katherine told a media roundtable in Brussels on Tuesday: “This was a test of our relationship and our ability to build confidence and trust.” Europeans are watching the U.S. pledge to fix the “Section 232” national security tariffs on EU steel and aluminum that the Biden administration inherited from former President Donald Trump. On the Section 232s, which are supposed to be fixed by the beginning of December, Tai said: “There are hard questions that we have to face and deep feelings that we’re going to have to address… we’re going to push ourselves and our partners in the EU for an outcome that is going to be good for our relationship, for our industries, for our economies, for our workers.”

 


ENERGY & CLIMATE CHANGE


 

Is USDA’s Vilsack hinting at a reduction in RFS levels? Remarks by USDA Secretary Tom Vilsack to the AgriTalk radio program on the Renewable Fuel Standard (RFS) blending levels being worked on by EPA are causing some concern with biofuel backers. Asked about reports EPA was considering lowering RFS blending mandates and may be considering new small refinery exemptions (SREs), Vilsack told the program EPA is dealing “with a tough situation over there, because they are dealing with the consequences of decisions that were made in the previous administration in terms of what happened in 2020 and what's happening in 2021.”

     But what sparked more concern is a comment by Vilsack on the coming 2021 biofuel and 2022 biofuel levels. “It's going to be important before we make judgment about this, to take a look at the total package, to see exactly where we are at the end of the day,” Vilsack said. He also said his agency has expressed the need for the biofuel industry to be supported and noted biofuels will play a major role in the administration’s climate change efforts. But his remarks on looking at the “total package” on the RFS levels has spawned concern there may be some credence to reports EPA may lower biofuel blending levels, including for conventional (primarily corn-based) ethanol.

     EPA has targeted July for releasing the proposed RFS levels and is seeking to finalize them by November 30. However, EPA has not yet sent the proposed levels to the Office of Management and Budget for review as part of the regulatory process in setting the regulation. 

— Democratic lawmakers push EPA on reports of RFS waivers. A group of House and Senate Democrats are calling on EPA to not take any actions to waive Renewable Fuel Standard (RFS) requirements for some refiners as some media reports have suggested. While expressing support for the administration’s efforts on climate change, the lawmakers said in the letter (link) to EPA Administrator Michael Regan and National Economic Council Director Brian Deese that they are “concerned that rolling back the RFS obligation for refiners directly contradicts this work. Following through on the actions reportedly under discussion would directly undermine your commitment to address climate change and restore integrity to the RFS and we urge you to reject them.”

     The lawmakers said the media reports suggest options being considered by the administration “all unjustifiably waive Clean Air Act compliance requirements for a small group of refiners that the EPA has repeatedly determined are not negatively impacted by the RFS.” And they cautioned the actions would mean an increase in greenhouse gas emissions. EPA needs to set the 2021 and 2022 RFS levels “with strong blending targets” and address the court action calling on EPA to reinstate 500 million gallons of RFS requirements that were waived for the 2016 compliance year. This situation again underscores the challenge ahead for EPA as it crafts RFS plans ahead.

— Bill to mandate disclosure of climate risks passes. Publicly traded companies would be required to disclose financial risks related to climate change under a bill passed by the House yesterday and sent to the Senate where it faces an uncertain future. The bill would also require disclosure of other so-called environmental, social, and governance information such as that related to political spending, tax jurisdictions and executive pay raises.

— GM speeds up its electric-vehicle production targets. The auto giant said it would build two new U.S. battery plants and now plans to spend $35 billion on EVs  by 2025, up from a forecast of $20 billion a year ago. It is another sign of the auto industry’s embrace of electric vehicles as key to its future. The company also raised its guidance for pretax profit excluding one-time items for the first half of this year, thanks to continued strength in the U.S. vehicle market and progress combating the semiconductor shortage.

 


LIVESTOCK, FOOD & BEVERAGE INDUSTRY


 

— Senate Agriculture Committee sets June 23 hearing on cattle market/industry. The Senate Agriculture Committee has set a hearing for June 23 on “Examining markets, transparency, and prices from cattle producer to consumers.” The move was welcomed by Sen. Chuck Grassley (R-Iowa) who has been a long critic of the US cattle market situation and consolidation in the industry. “GR8 NEWS Ag Cmte answering my calls 2hold a hearing on June 23 on unfairness in cattle market/industry +need for transparency,” Grassley said on Twitter. “This is opportunity to educate senators/public on the dire issues family farmers r facing while up against Big Cattle/ 4 packers control 80% of market.”

 


CORONAVIRUS UPDATE


 

Summary: Global cases of Covid-19 are at 177,069,914 with 3,833,795 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 33,498,511 with 600,653 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 312,915,170 doses administered, 146,456,124 have been fully vaccinated, or 44.6% of the U.S. population.

— CureVac’s Covid-19 vaccine falls short. The highly anticipated shot had an efficacy of just 47% in a clinical trial, which doesn’t bode well for it getting adopted anywhere.

 


POLITICS & ELECTIONS



— Democratic candidates for mayor of New York City held their final debate before next week’s primary. The NYT ranked their performances (link).

— Obama Presidential Center could see a late-summer groundbreaking after years of lawsuits, fundraising and federal reviews. The $700 million estimated cost of the campus will house the Obama Presidential Center in Chicago’s Jackson Park. The center will include a public library and recreational space. It has been slowed down by challenges from activists for years, in part because some believe it should be built on private property.

 


CONGRESS  



— Biden plans to sign legislation today that would make June 19 a federal holiday commemorating the end of slavery in the U.S., after the House and Senate passed the bill in votes earlier this week. The measure to establish the Juneteenth National Independence Day passed 415-14 yesterday, a day after it cleared the Senate by unanimous consent. Juneteenth marks June 19, 1865, when Maj. Gen. Gordon Granger arrived with federal troops in Galveston, Texas, and informed the last enslaved people there that they were free, months after the end of the civil war.

— Manchin lists demands for voting rights bill. Sen. Joe Manchin (D-W.Va.) delivered a list of changes he wants to see in voting rights legislation in a bid to strike a compromise on an issue that’s put him at odds with the rest of his party. Manchin is the only Democrat in the chamber who hasn’t signed onto a Senate version of the sweeping overhaul of election laws that Schumer will try to bring to the floor next week.

     Manchin’s office circulated a three-page memo this week which indicates his willingness to support key provisions of the For the People Act, the marquee Democratic bill that the House passed in March — including provisions mandating at least two weeks of early voting and measures meant to eliminate partisan gerrymandering of congressional districts. But the memo also sketches out several provisions that have historically been opposed by most Democrats, including backing an ID requirement for voters and the ability of local election officials to purge voter rolls using other government records.

— Democrats mull plan to push immigration changes. Senate Democrats are weighing plans to speed some components of a stalled immigration overhaul through the Senate later this year as part of a broad Democrat-only measure with much of Biden’s economic agenda. The idea was discussed yesterday at a meeting between Senate leadership and all 11 Democrats on the Senate Budget Committee.

     Meanwhile, U.S. Attorney General Merrick Garland overturned two cases decided by the Trump administration that made immigrants fleeing domestic or gang violence generally ineligible for asylum in the United States.
 


OTHER ITEMS OF NOTE     


— President Biden and Russian President Vladimir Putin agree to disagree. Noting the “hype” around the summit, Biden said his aim was “straightforward” about the Kremlin’s trampling of human rights, military adventurism in Ukraine and attacks on democracy, including interference in U.S. elections. “I want President Putin to understand why I say what I say and why I do what I do and how I will respond to certain actions that harm American interests,” said Biden, who said the summit was about establishing “some rules of the road.”

     Biden said that the prospect of an American military response to Russia’s actions was never broached. But he also suggested that America’s cyber capabilities exceeded Moscow’s, hinting that the U.S. could retaliate in kind to continued cyberattacks from within Russia. And he said “the consequences ... would be devastating for Russia” if imprisoned Putin foe and opposition leader Alexei Navalny, who survived a poisoning with a Russian nerve agent last year, were to die in the state’s hands.

     Biden said that Putin, too, is interested in averting a new Cold War as he sees China on his borders, increasingly asserting economic and military power.

     The potential success of the meeting, Biden said, meeting wouldn’t be measurable for at least “six months,” snapping at a reporter who asked why he was confident Putin would change his behavior. “I’m not confident I’m going to change his behavior,” Biden said, his voice rising. “What the hell?” (Biden apologized for being “a wise guy” to the reporter, CNN’s Kaitlan Collins, after motorcading to the airport for the trip home).

     Putin during his longer briefing said, “We don’t share the same positions in many areas, but I think both sides showed a willingness to understand one another and to find ways to bring our positions closer together.” He rejected blame for the military buildup at the Ukrainian border and the jailing and deaths of opponents, and he brought up mass shootings in the United States and accused the U.S. of human rights violations.  Putin compared Navalny’s protest movement seeking democratic reforms to the insurrectionists who sought to overturn the U.S. presidential election by storming the Capitol on Jan. 6. Asked about that analogy, Biden called it “a ridiculous comparison.”

     To the cyberattack charges, Putin said of the U.S.: “All they do is make insinuations.” He said he thought the U.S. was not genuinely interested in getting to the bottom of these cases.

     Biden said he told his Russian counterpart that critical infrastructure has to be off-limits to any attacks, cyber or otherwise, and he supplied him a list of 16 sites that Russia must never attack. The list (likely the 16 critical infrastructure sectors noted by the U.S. Cybersecurity and Infrastructure Security Agency) includes energy, food, and water systems — and also the U.S. defense industry.

     Biden said he also raised the issue of the repression in Moscow of several foreign news outlets.

     On a point of agreement, Biden said he and Putin concurred on efforts to prevent Iran from acquiring a nuclear weapon. The U.S. is engaged in negotiations in Vienna to return to the Iran nuclear accord, where Russia is one of six cosignatories. Additionally, the two sides agreed to start an interagency dialogue aimed at improving relations and to return their ambassadors to each other’s capitals soon.

     Afterward, Putin described Biden as a “very balanced, professional man.” Biden said of Putin: “I think the last thing he wants now is a Cold War.”

     Bottom line: Biden laid out expectations for future relations with Russia, but success will be measured in changes in Russian behavior.

— U.S. North Korea policy. Sung Kim, the U.S. special envoy for North Korea, will meet with Japanese and South Korean officials in Seoul over the weekend as the Biden administration begins efforts to align on North Korea policy. Kim’s trip comes as North Korean leader Kim Jong Un warned of a “tense” food situation developing in the country because of poor crop yields due to typhoon-induced flooding. Link to details via a WSJ item.


 

 

Latest News

After the Bell | September 21, 2021

After the Bell | September 21, 2021 Corn ends lower as USDA rating improves and harvest picks up, wheat lower, soybeans higher.

ASF confirmed in Haiti as thousands of migrants swarm the U.S. Border

The presence of the virus in the Americas paired with a surge in Haitian migrants at our southern border heightens concern the highly contagious disease could make its way to the U.S.

First Thing Today Audio | September 21, 2021

Experts believe a bailout is likely for the beleaguered Chinese real estate firm, the Biden administration reopens international travel and the pork product market takes a dive...

Legislative Crisis: Dems Link Debt Limit to Funding Bill Amid GOP Senate Hurdle

OECD boosts global inflation forecasts | Congestion mounts at Calif. Ports | U.S./U.K. trade

Ahead of the Open | September 21, 2021

Ahead of the Open | September 21, 2021 Corn futures seen lower after USDA crop ratings improve and harvest accelerates, soybeans firmer.

First Thing Today | Sept. 21, 2021

Cordonnier warns his U.S. corn & soybean yield forecasts may fall. Gulf terminals slowly coming back online. Inflation will continue to rise over the next two years. Cattle hold up well in the fact of economic jitters.