Focus: FOMC Meeting, Biden Meets with Putin, Infrastructure Talks Countdown

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Vilsack appears Tuesday before Senate panel and will get lots of questions



Washington Focus


 

President Joe Biden continues his European travels after the G7 confab. On his agenda: meeting with European officials and on June 16 in Geneva with Russian President Vladimir Putin.

     U.S. Trade Representative Katherine Tai will join Biden in Brussels for meetings with EU counterparts and then for Tuesday’s U.S./EU summit.

Back at home, Congress continues its hearings on the fiscal year (FY) 2022 budget, with USDA Secretary Tom Vilsack appearing on Tuesday before the Senate Ag Appropriations Subcommittee. That is likely why USDA on Friday finally released long-delayed details on second-half 2019-crop WHIP+ payments and on the Quality Loss Adjustment (QLA) program (link for details).

     Topics that lawmakers will (or should) likely ask Vilsack to comment on include the ag sector’s growing worry list of topics:

  • Livestock pricing issues
  • Meat industry concentration
  • Cyberattacks and ransom paid by JBS
  • Line speeds for meat processing
  • Mandatory country-of-origin labeling
  • Loan forgiveness-plus to selected minority farmers, delayed by court action
  • Using CCC Charter act for climate change program
  • Delayed CFAP contract payments for livestock and poultry producers; why it took so long for WHIP+ payments
  • Staffing and opening of FSA offices
  • Staffing update for ERS
  • EPA’s announcement regarding the “water rule” (WOTUS rule)
  • Reported White House efforts to aid refiners regarding the RFS program
  • Dairy: Lawmakers always want more funding for dairy
  • Conservation: Lawmakers always want more funding for conservation
  • Food stamps: Lawmakers always want more funding for food stamps (SNAP)

     Here is a topic farmers and analysts want lawmakers to ask but they likely will not: Why is USDA getting behind private industry in accurately forecasting U.S. crop and stocks of key grains and cotton and why was USDA’s World Board so slow in assessing China’s corn import needs and now Brazil’s corn crop downturn?

Talks continue on infrastructure reform. Last week a group of 10 bipartisan senators released a $1.2 trillion package, $579 billion of which represents net new spending beyond what is already anticipated. The proposal, lacking a lot of details, eliminates the social programs that President Biden included in his American Jobs Plan and focuses instead on core physical infrastructure, and it does not include a tax increase, the people said.
 


Hearings and Events This Week


 

Monday, June 14

  • Ransomware attacks. Senate Intelligence Committee Chair Mark Warner (D-Va.) will join Washington Post columnist Karen Tumulty for a discussion on ransomware attacks against industries and vulnerabilities in U.S. cybersecurity.
  • Batteries. Secretary of Energy Jennifer Granholm and Acting Assistant Secretary of Energy Efficiency and Renewable Energy Kelly Speakes-Backman participate in a department roundtable titled "A National Lithium Battery Blueprint" focused on "strengthening a domestic lithium battery supply chain that creates clean energy jobs while mitigating climate change."  

Tuesday, June 15

  • Federal Deposit Insurance Corp. board meets. On the agenda is a notice of proposed rulemaking on real estate lending standards. The board will also discuss creating an FDIC fintech advisory council.
  • FY 2022 budget: Energy Department. Energy Secretary Jennifer Granholm will appear before the Senate Energy and Natural Resources Committee hearing on the president's budget request for the department for fiscal year 2022.
  • Antitrust. Senate Judiciary Committee's antitrust panel hearing titled "Protecting Competition and Innovation in Home Technologies." The hearing, presided over by subcommittee chair Sen. Amy Klobuchar (D-Minn.), will tackle emerging smart technologies and devices.
  • USDA Sec. Tom Vilsack appears before the Senate Agriculture Appropriations Subcommittee hearing on USDA’s FY 2022 budget.
  • Nomination: EPA. Senate Environment and Public Works Committee hearing on the nomination of Jeffrey Prieto to be general counsel of the Environmental Protection Agency.

Wednesday, June 16

  • Democratic mayoral candidates for New York hold a debate. Eric Adams, Andrew Yang, and Kathryn Garcia lead the crowded field.
  • 1890 land grant institutions. House Ag hearing.
  • Broadband. House Small Business subcommittee hearing, “Supporting Small Entities through Investments in the National Infrastructure: Broadband.”
  • Treasury Secretary Janet Yellen appears before a Senate Finance Committee hearing.
  • FY 2022 budget: Interior. Senate Interior-Environment Appropriations Subcommittee hearing with Interior Secretary Deb Haaland.

Thursday, June 17

  • Treasury Secretary Janet Yellen heads to the House Ways and Means Committee to pitch President Joe Biden's fiscal year 2022 budget.
  • Cybersecurity threats. Senate Homeland Security Subcommittee on Emerging Threats and Spending Oversight hearing titled "Addressing Emerging Cybersecurity Threats to State and Local Government."
  • Forest Service. Senate Energy and Natural Resources Committee hearing on the U.S. Forest Service.

Friday, June 18

  • Iran holds elections amid renewed tensions with the West and delays on a new nuclear deal. Cleric Ebrahim Raisi is favored to win.
     

Economic Reports for the Week



Focus is on Wednesday’s FOMC statement as analysts will look to see if there is any change in the central bank’s “transitory” views of U.S. inflation. The big event will conclude with a policy statement and Jerome Powell presser. Other economic reports of interest include the latest retail sales report, the producer price index update and industrial production numbers.

 

Tuesday, June 15

  • National Association of Home Builders releases its Housing Market Index for June. Economists forecast an 83 reading, matching the May figure. Home builders remain very bullish on the housing market but are concerned about the availability and cost of building materials.
  • Census Bureau reports retail-sales data for May. Expectations are for a 0.5% month-over-month decline, following a flat April. Excluding autos, spending is seen rising 0.6%, compared with a 0.8% decrease previously.
  • Bureau of Labor Statistics (BLS) releases the producer price index for May. Consensus estimate is for a 0.4% monthly increase, with the core PPI, which excludes volatile food and energy prices, expected to rise 0.4% as well. This compares with gains of 0.6% and 0.7%, respectively, in April.

Wednesday, June 16

  • MBA Mortgage Applications
  • FOMC announces its monetary-policy decision. With the federal-funds rate all but certain to remain near zero, Wall Street is looking for clues as to when the Federal Reserve might scale back its bond purchases.
  • Census Bureau reports new residential construction data for May. The economists forecast a seasonally adjusted annual rate of 1.63 million housing starts, slightly higher than April’s data. Housing starts are just below their post-financial-crisis peak of 1.73 million from March.
  • China reports retail sales
     

Thursday, June 17

  • Jobless Claims
  • Conference Board releases its Leading Economic Index for May. The LEI is expected to rise 1.1% month over month to 114.5, after gaining 1.6% in April. The index has now surpassed its pre-Covid peak, set back in January of 2020. The Conference Board now projects 8% to 9% annualized gross-domestic-product growth for the second quarter, and 6.4% for the year.
  • Department of Labor reports initial jobless claims for the week ending on June 15. Jobless claims this past week were 376,000, the lowest total since March of 2020.Fed Balance Sheet
  • Money Supply

Friday, June 18

  • Bank of Japan announces its monetary-policy decision. The central bank is widely expected to keep its key interest rate at negative 0.1%. The BOJ recently updated its GDP forecast to 4% growth for fiscal 2021 and 2.4% for fiscal 2022.

 


Key USDA & international Ag & Energy Reports and Events 


 

With USDA’s June Acreage report at the end of the month, the focus continues on weather, both for U.S. crop prospects, and Brazil’s drought-impacted corn crop.

Monday, June 14

     Ag reports and events:

  • Export Inspections
  • Crop Progress
  • Cotton and Wool Outlook
  • Oil Crops Outlook
  • Dairy Monthly Tables
  • Feed Outlook
  • Rice Outlook
  • Wheat Outlook
  • EU weekly grain, oilseed import and export data
  • Holiday: Australia, China, Hong Kong

     Energy reports and events:

  • EIA monthly Drilling Productivity Report

Tuesday, June 15

     Ag reports and events:

  • Feed Grains: Yearbook Tables
  • FT Commodities Global Summit, day 1
  • Malaysia June 1-15 palm oil export data
  • Malaysia CPO export tax for July (tentative)

     Energy reports and events:

  • API weekly U.S. oil inventory report
  • Citizens Energy Congress, day 1; speakers include Baker Hughes CEO Lorenzo Simonelli, Eni CFO Francesco Gattei
  • FT commodities summit, day 1; speakers include Vitol CEO Russell Hardy, Trafigura CEO Jeremy Weir, Gunvor Chairman Torbjorn Tornqvist, Mercuria CEO Marco Dunand

Wednesday, June 16

     Ag reports and events:

  • Broiler Hatchery
  • Livestock, Dairy, and Poultry Outlook
  • Sugar and Sweeteners Outlook
  • Potato Stocks
  • Turkey Hatchery
  • FT Commodities Global Summit, day 2
  • Australia’s Abares agricultural commodities report
  • Brazil’s Unica may release cane crush, sugar production data (tentative)
  • CNGOIC oilseed conference, Chengdu, China, Day 1

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • U.S. weekly ethanol inventories
  • Genscape crude inventory report for Europe’s ARA region
  • FT commodities summit, final day; speakers include Vitol CFO Jeffrey Dellapina, Trafigura CFO Christophe Salmon
  • Citizens Energy Congress, final day; speakers include former BP CEO Bob Dudley
  • China’s May output data, including crude oil and refining

Thursday, June 17

     Ag reports and events:

  • Weekly Export Sales
  • Port of Rouen data on French grain exports
  • Itau webinar on agribusiness outlook, Sao Paulo, Brazil
  • CNGOIC oilseed conference, Chengdu, China, Day 2

     Energy reports and events:

  • EIA natural gas storage change
  • Russian weekly refinery outage data from ministry
  • Insights Global weekly oil product inventories in Europe’s ARA region

Friday, June 18

     Ag reports and events:

  • CFTC Commitments of Traders report
  • Peanut Prices
  • Fruit and Tree Nut Data
  • Vegetables and Pulses Data
  • Coffee: World Markets and Trade
  • Milk Production
  • China customs to trade data, including imports of corn, wheat, sugar and pork
  • FranceAgriMer weekly update on crop conditions

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • China issues May output data for oil products
  • ICE Futures Europe’s weekly commitment of traders report, week ended June 15

 

 

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