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

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