Former Top USDA Economist: Suspend the RFS Biodiesel Mandate
Biden heads to Europe, may offer U.S. wheat donation to Ukraine
In Today’s Digital Newspaper
President Biden heads for Europe to meet with allies on Ukraine. Biden is set to land in Europe this afternoon. The main event of the trip will be tomorrow’s NATO summit in Brussels. Ukraine President Volodymyr Zelenskyy will take part via video in Thursday’s NATO meeting, where he’ll deliver an address and may “fully participate” in the talks, his spokesman Serhiy Nykyfotov said on television. After the Brussels summit, Biden will head to Poland. While there, Biden is set to meet with Polish President Andrzej Duda.
Zelenskyy said there is “nothing left” of Mariupol, as the Pentagon said Russian soldiers had now entered the besieged port city and that Russian warships are pounding it. Zelensky said there are about 100,000 people in the city, living in inhumane conditions.
The Russian stock market is preparing for an unusual reopening, with Moscow using some creative policies to limit the fallout.
The U.S. estimated that Russia has lost more than 10% of its original invasion force as a result of fierce Ukrainian resistance. The Pentagon said that Ukrainian forces have begun to go on the offensive in parts of the country, for example looking to retake Kherson, a southern city that fell early in the war. Earlier, Dmitry Peskov, Putin’s spokesman, repeatedly refused to rule out the possibility of Russia using nuclear weapons in Ukraine if faced with an “existential threat.”
The war in Ukraine is lifting prices for commodities well beyond oil and wheat… details below. USDA Secretary Tom Vilsack on Tuesday made comments about Ukraine agriculture, but he mainly said it is a “wait-and-see” situation.
“God forbid we have a weather problem this year,” said Dan Basse, head of AgResource Co., who described war in the Black Sea region as the greatest supply shock since World War I. “This is the biggest supply shock that we can find, looking backwards at our data to 1914 … on a caloric basis,” he said, amounting to about 11% of the world’s annual consumption. “A war that extends to June would be catastrophic for the spring crops” of corn, wheat and sunflowers, added Basse during on online forum organized by the Farm Foundation.
A sustained halt in Russian energy exports could have a dire effect on the global economy, a report from the Federal Reserve Bank of Dallas said on Tuesday.
Gasoline prices in March are on track for the biggest month-over-month increase since the mid-’70s.
Dr. Joe Glauber, a former top USDA economist, said: “I know this isn’t necessarily the most popular suggestion, but I think the (United States) should consider suspending these mandates” for biodiesel production and use. He made the remarks during a Farm Foundation event. “To me, food sort of trumps that.”
Inflation in Britain hit 6.2%, its highest level since March 1992. Increased food, energy and fuel prices were mostly to blame. Meanwhile, the U.K. announced an urgent fuel tax cut to fight a cost of living crisis.
The U.S. and U.K. struck a deal to lift U.S. tariffs on British steel and aluminum and U.K. tariffs on American whiskey, motorcycles and tobacco. The U.K. will lift retaliatory tariffs on more than $500 million worth of U.S. exports to the U.K., including distilled spirits, farm products and consumer goods.
On the farm policy front, Sens. Thune and Klobuchar introduced the Conservation Reserve Program Improvement Act.
Today is the third day for hearings regarding Supreme Court nominee Ketanji Brown Jackson. Barring unforeseen revelations, little stands in the way of her confirmation.
An easily transmitted version of the Omicron variant called BA.2 represents a growing share of Covid-19 cases in the U.S., new federal estimates show — about 35% as of the week ending on March 19.
Department of Transportation Secretary Pete Buttigieg said the administration was ready to dole out $2.9 billion in grants for state and local infrastructure projects, such as highway, bridge, freight, port and public transit expansions and repairs.
Equities today: Global stocks markets were mostly higher overnight. The U.S. Dow opened around 160 points lower. Asian equities finished mostly higher. The Nikkei advanced 816.05 points, 3.00%, at 28,040.16. The Hang Seng Index was up 264.80 points, 1.21%, at 22,154.08. European equities are mostly lower, with the Stoxx 600 down 0.5% and most regional markets seeing losses of 0.2% to 1.0%. However, British markets were seeing modest gains.
U.S. equities yesterday: The Dow rose 254.47 points, 0.7%, to close at 34,807.46. The S&P 500 climbed 50.43, 1.1%, to 4,511.61. The Nasdaq Composite closed at 14,108.82, up 270.36, 2.0%.
There’s only one stock-market sector in the green this year: The new FANG is going to be fuel, agriculture, natural resources and gold,’ one investor says of the energy sector’s rally. Link for details. However, prices for U.S. crude oil have gained 20% since they crossed $90 a barrel on Feb. 3, while energy equities have risen a more modest 11%.
Agriculture markets yesterday:
- Corn: May corn futures fell 3 1/4 cents to $7.53. December corn gained 6 cents to $6.70 and posted a contract high for the second day in a row, hitting $6.70 3/4.
- Soy complex: May soybeans rose 5 1/2 cents to $16.96 1/2, a lifetime-high close for the contract for the second straight session. May soymeal fell $4.50 to $476.80 per ton. May soyoil rose 83 points to 74.54 cents per pound.
- Wheat: May SRW wheat fell 1 cent to $11.18 1/4, after climbing overnight to a nearly two-week high at $11.69 1/4. May HRW rose 3 1/4 cents to $11.16 1/2, the contract’s highest close since March 15. March spring wheat gained 7 cents to $10.95 3/4. Cotton: May cotton futures edged up 3 points to 130.04 cents per pound, a lifetime-high close for the contract.
- Cattle: June live cattle fell 65 cents to $135.70. May feeder cattle futures fell 32.5 cents to $165.425.
- Hogs: June lean hogs rose 25 cents to $120.075, closing near the session high as bulls recovered from early losses to extend yesterday’s gains and put the $122.00 contract high posted March 16 in sight. Pork cutout values surged $5.10 to $106.71, near a two-week high and led by a gain of nearly $13 in hams. Movement totaled 273 loads.
Ag markets today: Corn, soybean and wheat futures held within Tuesday’s price ranges overnight in relatively quiet trade that has markets trading near session highs this morning. As of 7:30 a.m. ET, corn futures were 3 to 4 cents higher, soybeans were mostly 9 to 14 cents higher and wheat futures were mostly 14 to 17 cents higher. Front-month crude oil futures were nearly $2.50 higher but below yesterday’s highs and the U.S. dollar index was around 250 points higher this morning.
Technical viewpoints from Jim Wyckoff:
On tap today:
• U.S. new-home sales, due at 10 a.m. ET, are expected to rise to an annual pace of 805,000 in February from 801,000 one month earlier.
• Federal Reserve speakers: Chairman Jerome Powell at a BIS Innovation Summit panel on emerging challenges in a digital world at 8 a.m., Cleveland's Loretta Mester holds a press conference at 10 a.m., San Francisco's Mary Daly in a moderated discussion at 11:45 a.m., St. Louis's James Bullard to the Mid-Size Bank Coalition of America at 3 p.m., and Mr. Bullard on the economy and monetary policy at 9:05 p.m. ET. After Powell's comments on Monday, the CME's FedWatch tool is now pricing in a 50-basis point hike at the next meeting as greater than 60% and that figure is likely to rise over the next month.
Recession watch: The Federal Reserve Bank of Dallas warned that a cutoff of Russian energy could cause a global recession. A downturn appears “unavoidable” if the bulk of Russian oil-and-gas products are off the world markets for the rest of the year, according to a report (link) by the regional Fed bank.
Inflation in the U.K. reached a new three-decade high in February. The country's consumer-price index rose 6.2% from a year earlier and is expected to rise further in the coming months on higher energy and other commodity prices. Inflation was last higher in March 1992. The Bank of England expects inflation to reach 8% in the second quarter, and has cautioned that double-figure prints are not inconceivable before the end of the year if Russia’s assault on Ukraine and subsequent global supply shortages persist.
U.K. announces urgent fuel tax cut to fight cost of living crisis. U.K. Finance Minister Rishi Sunak today announced an immediate cut to fuel taxes in a bid to mitigate the country’s historic hit to living standards. In his Spring Statement, Sunak announced that fuel duty will be reduced by 5 pence per liter for 12 months, a cut he told Parliament will be worth £5 billion ($6.6 billion), starting from 6 p.m. U.K. time on Wednesday. The government hopes the cut will reduce the cost of gasoline at the pumps amid a surge in global oil prices. The level of fuel duty, a substantial contributor to British public finances, has been frozen at 57.95 pence per liter since 2011. Sunak also revealed plans to double the government’s household support fund to £1 billion for those affected by higher energy costs.
S&P slashed its forecast for global GDP growth this year to 3.3% from 4.1%. Europe will be hit particularly hard, it warned.
• Outside markets: The U.S. dollar index is higher as the euro and British pound are weaker against the greenback. The yield on the 10-year U.S. Treasury note has fallen to trade around 2.38% with a mixed-to-negative tone in global government bond yields. Gold and silver futures are higher with gold above $1,928 per troy ounce and silver around $25.15 per troy ounce.
• Crude oil futures are higher in volatile action ahead of U.S. trading. U.S. crude is trading around $111.80 per barrel and Brent around $118.40 per barrel. Futures were mixed in Asian action, with U.S. crude trading below $111.65 per barrel and Brent above $118.30 per barrel.
• Maryland and Georgia have become the first states in the country to temporarily suspend their gas taxes. The measure in Maryland will be in effect for 30 days, saving drivers 36.1 cents per gallon on gas, or 36.85 cents per gallon on diesel fuel. Georgia's suspension will last through May 31, suspending levies of 29.1 cents per gallon on gas, and 32.6 cents per gallon of diesel. A dozen other states are considering similar measures, with Connecticut set to vote on a gas tax holiday later today.
• Gasoline prices, which hit a nationwide average record high of $4.33 on March 11, are about $1.35 higher than they were a year ago, according to AAA. Every dollar of higher gasoline prices adds more than a $50 increase in households’ monthly expenses, according to Northern Trust. That has Americans at least looking more seriously at an electric car. In the week that ended March 13, one-quarter of shoppers on Edmunds.com considered a hybrid, plug-in hybrid or electric vehicle, a 39% increase from the previous week and an 84% surge from the same week in February. Meanwhile, shares of some electric-oriented companies are surging. Tesla is up more than 20% in the past few weeks, though it remains about 25% below the high it reached in early November. Plug Power, which makes hydrogen and fuel-cell systems, is up more than 50% since the 52-week low it hit in January. Of note: Electric vehicles accounted for about one in six light vehicles sold in Europe in the fourth quarter — a far higher share than in the U.S. due to tighter emissions rules and government subsidies. Looking ahead, Sparkz, a lithium battery start-up, wants to work with the United Mine Workers to recruit and train 350 displaced coal workers for a battery gigafactory it plans to build in West Virginia – the heart of coal country. Groundbreaking on the factory is expected this year.
• If March gas prices average $4.22 a gallon… it will be with the biggest month-over-month price increase since U.S. Energy Information Administration records began in the mid-’70s. The next-highest increase was after Hurricane Katrina in 2005.
• These elevated gas prices sting a little less than they did in the early ’80s because vehicles have become more fuel efficient, the WSJ notes. While gas prices in 1980 and in March of this year are similar after adjusting for inflation, drivers need 25% less fuel to travel the same distance today as was needed then.
• Chevron Corp. says it can help double Venezuela’s 800,000 barrels-a-day production within months. That could replace the loss of roughly 700,000 barrels a day the U.S. was importing from Russia before it attacked Ukraine. And it could help lower gasoline prices. The Biden administration is listening. Chevron is the only major U.S. producer to retain assets in Venezuela following nationalizations by the Socialist government and, much later, U.S. sanctions.
• Palm oil caps best run in a month on tight edible oil supply. Palm oil futures advanced for a third day, the longest winning streak in about a month, supported by a global shortage of vegetable oils and surging prices of fossil fuels. Futures for June delivery increased 3.8% to close at 6,195 ringgit a ton, bringing the gain this week to 10%. Soybean oil has also gained for three straight days and is up more than 4% since Friday.
Meanwhile, canola prices have almost doubled in the past year to a record following a severe drought that slashed Canadian production, and soybean oil and palm oil are not far below all-time highs because of dry weather in South America and a worker shortage in Malaysia.
• NWS weather: A lessening threat for severe weather and flash flooding will continue into the Southeast on Wednesday... ...Snow and ice accumulations will continue into Wednesday for northern parts of the Great Lakes... ...Critical fire weather threat for parts of Texas, with record heat through this week across the West.
Items in Pro Farmer's First Thing Today include:
• Firmer, but relatively quiet overnight trade
• Russian weather looks favorable for winter crops
• Cold Storage Report out this afternoon
• Slow developing cash cattle market
• Pork cutout strengthens
— Summary: President Joe Biden leaves for Brussels today as he prepares to attend a summit of EU heads of state and government followed by a meeting of NATO leaders on Thursday. Speaking to reporters on Tuesday, U.S. National Security Advisor Jake Sullivan said that both Europe and the United States would announce a new package of sanctions targeting Russia on Thursday, and a call for “joint action” on addressing Europe’s energy security and reducing reliance on Russian oil and gas. The Kremlin, for its part, seems to be conceding that its invasion is not going to plan. President Vladimir Putin’s chief spokesman, Dmitry Peskov, admitted in an interview with Christiane Amanpour that Moscow has not yet met its military objectives in Ukraine. When asked what Putin had achieved, he replied: “Well, first of all, not yet. He hasn’t achieved yet.”
- Biden to sanction hundreds of Russian lawmakers. The Biden administration is preparing new sanctions on most members of Russia’s State Duma, the lower house of parliament, as the U.S. continues its crackdown on Moscow over its ongoing war against Ukraine, the Wall Street Journal reported (link).
- Besides new sanctions, the U.S. and partner nations will unveil a new action aimed at “enhancing European energy security and reducing Europe’s dependence on Russian gas,” National Security Adviser Jake Sullivan said. A key issue among some allied nations is how far to go in restricting Russian fossil fuel, given their reliance on it. Reports note that Germany and Hungary sought to put the brakes on a potential Russian oil embargo. Sullivan: “The president is traveling to Europe to ensure we stay united, to cement our collective resolve, to send a powerful message that we are prepared and committed to this for as long as it takes, and to advance our response on all three critical fronts that I’ve described: helping the Ukrainian people defend themselves, imposing and increasing costs on Russia, and reinforcing the Western alliance.”
Sullivan said the sanctions would combine new actions with a crackdown on sanctions evasion. NATO and EU leaders will discuss European security, the continued humanitarian response to Ukrainian refugees, and ways to pressure China not to help Russia.
On Friday, Biden travels to Warsaw to meet with Poland’s President Andrzej Duda and American troops defending NATO territory and helping with humanitarian efforts. More than 2.1 million Ukrainian refugees are in Poland, which now faces the prospect of Russian troops in next-door Belarus.
- Pro Farmer on Tuesday reported that President Biden could announce some U.S. wheat donations to Ukraine during his trip to Europe this week. The amount if announced would be around 400,000 tons.
- Cyberattack strategy. After Biden warned Monday of intelligence indicating Russia was contemplating a cyberattack on the U.S., National Security Adviser Jake Sullivan added details about NATO’s position on such a threat. A cyberattack by Russia on a member country could trigger a collective response from the U.S. and its allies, but not necessarily a military one, he said.
- Russia trade bill hits hurdle in Senate over oil ban. Negotiations on a bill that would end normal trade relations (MFN/PNTR) with Russia have hit a slowdown in the U.S. Senate that could push final passage into next week. Sen. Mike Crapo (R-Idaho.) said he would block Democrats’ attempts to fast-track the bill through the Senate if they were to proceed without including a ban on Russian oil imports. But adding that measure would require the House to again vote on the bill before it could be sent to Biden for his signature and the House, which passed the legislation last week, isn’t in session to vote this week.
- France’s TotalEnergies said it would stop buying Russian oil and BNP Paribas said it would sever ties with Russia, as consumer product firms like Pepsi and P&G struggle to define what counts as “essential” to continue selling in the country.
— Market impacts:
- Russia’s crop-sowing costs may rise 20% this year: Kommersant. Russia may need at least 1 trillion rubles ($9.7 billion) for this season’s sowing of all crops, including wheat, sunflowers, potatoes and sugar beets, Kommersant reports, citing unidentified people from the industry. If so, it implies a 20% y/y growth and is caused by sharp increases in prices of seeds and imported spare parts.
- Russian wheat exports in March are holding at a near-normal pace despite the war raging in Ukraine, but that may not last as few new deals are being completed.
- Ukraine spring crop sowing area could be halved: Reuters. Ukraine’s 2022 spring crop sowing area may be 7 million hectares, compared to 15 million hectares expected before the Russian invasion, Reuters reports citing an interview with Ukrainian Agriculture Minister Roman Leshchenko. The gov’t has urged farmers to sow more spring wheat, buckwheat, oats, millet and spring barley.
“God forbid we have a weather problem this year,” said Dan Basse, head of AgResource Co., who described war in the Black Sea region as the greatest supply shock since World War I. “This is the biggest supply shock that we can find, looking backwards at our data to 1914 … on a caloric basis,” he said, amounting to about 11% of the world’s annual consumption. “A war that extends to June would be catastrophic for the spring crops” of corn, wheat and sunflowers, added Basse during on online forum organized by the Farm Foundation. “The question is, can they (Ukrainian farmers) get it in the ground?” Link for details.
Industry consensus: For most analyses, the number being used is a half crop of corn, half crop of barley, and three-quarters of a crop of wheat — limited exports over the next four to six months.
- Vilsack comments on Ukraine ag situation and impact. USDA Secretary Tom Vilsack said it is too early to tell how the Russian war with Ukraine will have on consumers and global food supplies. While touring the exhibition of farm equipment on the National Mall Tuesday, Vilsack said that 80% of what farmers harvested in Ukraine last year has already been shipped. As for the planting season ahead, Vilsack said: “We don't know whether there are sufficient fuel needs being met so farmers can put crops in the ground. We don't know what their machinery situation is. We don't know whether they… are physically able to farm,” he said.
- Bunge facility at Ukraine port sustains damage: Company. A Bunge facility in Ukraine sustained damage after the Mykolaiv port was “hit,” according to a statement by the company. Preliminary reports show some damage happen to the structure, but all employees are safe, the company added. The facility has been closed since Feb. 24 when Russia’s invasion of Ukraine began. A thorough inspection of the site will happen when it’s safe to do so, the company noted.
- The Russian war price shock is clearly visible across a growing number of countries. Russia’s invasion of Ukraine has spread pain across the developing world. It has spurred the biggest price shock in decades and choked imports of basic commodities, triggering shortages especially tough for poorer nations that were already far behind in their economic recovery from the pandemic. In Kenya, bread prices recently jumped by 40% in some areas. In Indonesia, the government has imposed price controls on cooking oil. In Brazil, the state-owned energy-giant Petrobras raised gasoline prices to distributors by 19%. In Turkey, a sharp increase in the price of sunflower oil sparked panic buying. Street protesters in Iraq, angry over rising food prices, called themselves the “revolution of the starving.” Some 50 countries, mostly poorer nations, import 30% or more of their wheat supply from Russia and Ukraine. The two countries combined provide a third of global cereal exports and 52% of the sunflower oil export market.
- Deere shares soar as Ukraine fighting stokes demand for farm equipment. Deere & Co. shares jumped to a record high on Tuesday, making it the best performing industrial stock this year, as investors bet on a surge in demand with the war in Ukraine creating a need for more agricultural production. Deere’s stock rose up to 3.3% to $436.28, an all-time high for a fourth straight session. The sharp rally in the shares since the beginning of Russia’s invasion of Ukraine nearly a month ago has led to a 25% gain this year, making Deere the top gainer in the 72-member S&P 500 Industrials Index.
— Thune and Klobuchar introduce CRP Improvement Act. Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.), members of the Senate Ag Committee, introduced the Conservation Reserve Program (CRP) Improvement Act. They said the legislation would bolster CRP by improving access to grazing, providing more enrollment options to producers, and addressing CRP implementation issues following the 2018 Farm Bill.
The CRP Improvement Act would:
- Make CRP grazing a more attractive option by providing cost-share for the establishment of grazing infrastructure – including fencing and water distribution – on all CRP practices and contracts if grazing is included in the approved conservation plan;
- Increase the CRP annual payment limitation from $50,000, which was established in 1985, to $125,000 to account for inflationary and rising land value pressures and provide landowners with more CRP enrollment options to ensure resources are appropriately conserved;
- Reinstate mid-contract management cost-share payments for activities that are not related to haying or grazing; and
- Permanently establish the State Acres for Wildlife Enhancement practice under Continuous CRP.
What’s next? Thune plans to introduce multiple farm bill proposals in advance of the current farm bill’s mostly September 2023 expiration.
— Senate Ag to hold markup on CFTC nominees. The committee will meet today to vote on whether to move President Biden’s nominations of Christy Goldsmith Romero, Kristin Johnson, Summer Kristine Mersinger, and Caroline Pham each to be a commissioner of the Commodity Futures Trading Commission to the Senate floor. The vote will be held in conjunction with a floor vote.
— China’s top Russia envoy urged Chinese business people in Moscow to seize economic opportunities created by Putin’s war on Ukraine, a strategy that could help soften the blow for the Kremlin when it comes to international sanctions. Ambassador Zhang Hanhui on Sunday told about a dozen business heads to “fill the void.”
— China’s soybean imports from U.S. and Brazil shrank in February. China’s soybean imports from the U.S. declined 41% in February from a month earlier to 3.71 million tons, according to Chinese customs data, 30% lower than the same month last year. Imports from Brazil fell 42% on month to 1.29 million tons in February, vs just 33,450 tons a year ago.
— China imported 968,173 tons of U.S. corn in February, +1% year-over-year (y/y). Shipments from Ukraine were 914,150 tons, +12% y/y.
— No survivors have been found in the China Eastern plane crash. Emergency workers have scoured the southern China hillside, where a Boeing 737 jet crashed Monday, to no avail. They are increasingly focused on finding potential clues to what went wrong… the plane’s black box has been found. Officials said the black box was "heavily damaged." A Boeing (BA) 737-800 jet carrying 132 people nose-dived Monday in rural, mountainous part southern China.
— U.S., U.K. reach trade deal to end tariffs on British steel and American whiskey. The U.S. and U.K. late Tuesday announced they have reached an agreement on U.S. Section 232 tariffs on steel and aluminum from the U.K. to historically based sustainable volumes of the products without those tariffs. A tariff-rate quota (TRQ) will be established June 1 for an aggregate annual import volume of 0.5 million tonnes under 54 product categories of steel, and 0.9 thousand tonnes for unwrought aluminum under two product categories and 11.4 thousand tonnes for semi-finished (wrought) aluminum (other than foil) under 12 product categories. The deal also includes novel smelt and cast requirements on aluminum and requires any U.K. steel company owned by a Chinese entity to conduct an audit of financial records to “assess influence from the People’s Republic of China government,” according to the Office of the U.S. Trade Representative (USTR). Those audit results must also be shared with the U.S.
The agreement also means that retaliatory tariffs on more than $500 million in U.S. exports to the U.K. will be removed, including ones on distilled spirits, various agriculture products and consumer goods.
The U.S. and U.K. will monitor steel and aluminum trade between the two.
What’s ahead: While both sides have measures in place to address unfairly traded imports and surges of imports, the joint statement indicated those alone are not enough to address “global market distortions caused by carbon intensive non-market excess capacity.” To address those situations, the U.S. and U.K. will “continue to take effective and appropriate domestic measures, such as antidumping, countervailing duty, and safeguard measures or other measures.” The TRQ on steel will be evaluated every three months by the U.S. starting no later than Sept. 1.
USA Rice President and CEO Betsy Ward said, “The U.S. rice industry applauds the Biden administration for reaching a deal with the UK to bring these retaliatory tariffs to an end later this spring. Our rice exports have been unnecessarily caught in the crossfire of the steel and aluminum trade wars for nearly four years, impacting decades of business relations with our customers in Europe. With rising inflation, skyrocketing input costs, and uncertainty all around us, the lifting of this burden is welcome news. We believe this will help pave the road for U.S./U.K. Free Trade Agreement negotiations to restart and further deepen our trans-Atlantic relationship.”
Link to announcement of actions on U.K. Section 232
Link to joint statement on U.S./U.K. agreement on steel and aluminum
— USTR Tai unwilling to commit to FTA talks with U.K. after trade dialogue discussions this week. U.S. Trade Representative Katherine Tai and U.K. Secretary of State for International Trade Anne-Marie Trevelyan talked up progress they made in the first joint Dialogues on the Future of Atlantic Trade held Monday and Tuesday in Baltimore, but Tai in particular was unwilling to give any indication of a resumption of U.S./U.K. free trade agreement (FTA) talks that were started under the Trump administration but have not been pursued by the Biden administration.
Tai said that she did not want to “prejudge or predetermine or pre-script where these dialogues take us,” later noting that the administration “will be working closely with the Congress on all matters of international trade, and on this in particular we consult with Congress closely.”
Trevelyan, however, said the U.K. was “absolutely” ready to engage with the U.S. on the FTA front. “We've said that for some time and … the reason why we want to hold these dialogues is to really be able to think about where we want to be going with our relationship, what that looks like,” she noted.
Tai said the dialogue with the U.K. and others are aimed at being flexible and responsive so “we don't spend years and spend a lot of blood, sweat and tears working on something that isn't going to be relevant to the needs of our people in our economies.”
Perspective: Based on Tai’s remarks, the timeline for any new push by the Biden administration on new trade talks does not appear imminent. Another clear signal is that they do not have any plans or timeline to pursue the approval of the lapsed Trade Promotion Authority (TPA) with the U.S. Congress, a key for any FTA talks to take place. Under TPA, Congress can vote on any proposed new trade accord in an up or down vote without any amendments.
ENERGY & CLIMATE CHANGE
— Republican wants Granholm to testify on rising gasoline prices. Energy Secretary Jennifer Granholm has been asked to testify at the Energy and Commerce Committee hearing on April 6 on the Biden administration’s efforts to help increase domestic oil and gas production, according to a letter from the panel’s lead Republican, Rep. Cathy McMorris Rodgers (R-Wash.).
Meanwhile, Granholm Tuesday said she was confident “there will be a significant increase in supply by the end of this year,” during a press briefing on the sidelines of an International Energy Agency ministerial in Paris. Granholm said much of her discussion with industry officials at CERAWeek by S&P Global in Houston earlier this month was “an assurance that the oil and gas industry was ramping up.” She added that there are opportunities for U.S. oil companies to take advantage of existing infrastructure “to ramp up, to do a service to the globe” so allies don’t feel limited to Russian energy supplies.
— Suspend the U.S. biodiesel/RFS mandate? “I know this isn’t necessarily the most popular suggestion, but I think the (United States) should consider suspending these mandates” for biodiesel production and use, said Dr. Glauber during a Farm Foundation event. “To me, food sort of trumps that.” The Renewable Fuel Standard guarantees biodiesel a share of the U.S. fuel market and a $1 a gallon tax credit is offered to producers. Glauber currently is at the IFPRI think tank and was formerly the top USDA economist.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— USDA confirms HPAI in Nebraska commercial flock. USDA’s Animal and Plant Health Inspection Service (APHIS) has confirmed highly pathogenic avian influenza (HPAI) in a flock of 570,000 commercial broiler chickens in Butler County, Nebraska, the first commercial flock confirmed in the state with HPAI. A backyard mixed species (non-poultry) flock in Merrick County, Nebraska was confirmed with HPAI on March 15. This brings the number of states with commercial flocks infected to eight and total cases of HPAI to 51 as of March 22.
— General Mills gained 1.6% in the premarket after reporting better-than-expected quarterly earnings and raising its full-year outlook. The food maker earned an adjusted 84 cents per share, 6 cents above estimates, with revenue essentially in line with analyst forecasts. General Mills said demand for food at home continues to be elevated.
— Summary: Global cases of Covid-19 are at 474,206,633 with 6,099,561 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 79,803,670 with 973,266 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 556,460,943 doses administered, 217,110,680 have been fully vaccinated, or 66.14% of the U.S. population.
— Covid infections are on a new upswing, rising 29% over the past two weeks in Nevada, 21% in New York, and 18% in Arkansas, the New York Times reported. A Centers for Disease Control and Prevention dashboard shows that wastewater sites with the highest virus spikes are up 33% over the past week.
The even more contagious Omicron subvariant BA.2 is now an estimated 35% of U.S. cases in the week ending March 19, up from 16% in the first week of March. BA.2 is more than 50% of estimated cases in New England and in the region that includes New York and New Jersey, according to the CDC.
— Jen Psaki tested positive for Covid-19 for a second time. The White House press secretary, who is experiencing mild symptoms, won’t travel to Europe with President Biden for this week’s NATO talks. She said she had two socially distanced meetings with Biden yesterday, and the president wasn’t considered a close contact as defined by CDC guidelines. She first tested positive in late October.
— Former Secretary of State Hillary Clinton tested positive for Covid-19, she said Tuesday, adding she had mild cold symptoms but felt fine, and that her husband, former President Bill Clinton, tested negative.
— Moderna is developing a 3-in-1 vaccine to cover Covid-19, the flu, and the respiratory syncytial virus (RSV). Its postpandemic strategy includes offering a Covid booster this fall that covers the Omicron variant, then expanding that shot to cover Covid and the flu, and then finally Covid, flu, and RSV.
Meanwhile, Moderna said its lower-dose Covid vaccine works in babies and young children. If regulators agree, it could mean vaccinations for the littlest kids by summer. Moderna's two-dose Covid vaccine was about 44% effective at preventing infection from the omicron variant in children 6 months to under 2 years old and about 38% effective for children 2 years to 5 years old. None of the kids developed severe illness and most breakthrough cases were mild. Moderna plans to ask the FDA for emergency clearance.
POLITICS & ELECTIONS
— Canada's Trudeau strikes surprise deal to keep power until 2025. Canada's ruling Liberal Party and opposition New Democratic Party (NDP) reached a surprise agreement that aims to keep the minority government in power until 2025, Prime Minister Justin Trudeau said. The New Democrats changed their position from supporting Trudeau on a case-by-case basis to a more long-term vision as the two parties agreed to deals on social and climate policy, which include a plan to rapidly phase out fossil fuel financing.
— House GOP members to huddle in Florida. House Republicans will spend the next three days trying to fill in some of the gaps of a legislative blueprint to guide them through the midterm elections and into the next year if they win control of the chamber. Lawmakers will hear presentations from the heads of seven task forces on the issues and legislation likely to become a part of their agenda during the annual issue conference at a Florida resort outside of Jacksonville.
— SCOTUS hearing continues today. The Senate Judiciary Committee will hold a third day of confirmation hearings today for Biden's Supreme Court nominee Judge Ketanji Brown Jackson. Jackson defended her judicial record yesterday as she answered questions from lawmakers and was grilled on some sentencing decisions. It is widely believed Democrats will have the 50 votes they need for her confirmation. If confirmed, Jackson will fill Justice Stephen Breyer's upcoming vacancy and become the first Black woman to serve on the nation's highest court.
Sen. Dianne Feinstein (D-Calif.) sought to pin Jackson down on whether she would uphold the precedents of Roe v. Wade and Planned Parenthood v. Casey, the Supreme Court cases that have protected abortion rights. “Roe and Casey are settled law of the Supreme Court concerning the right to terminate a woman’s pregnancy,” Jackson answered.
A Gallup poll ahead of this week's confirmation hearings found a high level of public support for Judge Jackson compared with other recent nominees, with 58% supporting her confirmation, 30% opposed and 12% had no opinion. That put her just below Chief Justice John Roberts’s rating in 2005, when his confirm/reject numbers were 59% to 22%, respectively. Nominees Elena Kagan, Neil Gorsuch, Harriet Miers and Brett Kavanaugh entered their hearings with less than 50% support. All were confirmed except Miers, whose nomination was withdrawn.Com
— Senate Commerce approves Ocean Shipping Reform Act. The Senate Commerce panel on Tuesday advanced by a voice vote the Ocean Shipping Reform Act. The House has approved different legislation on the same topic.
— A House committee is considering changes to the rules governing lawmakers’ trades. It has been reviewing the STOCK Act, which sets out the reporting requirements for trades. It is considering new rules and penalties “to create greater transparency and accountability in Congress,” Rep. Zoe Lofgren (D-Calif.), the chairwoman of the House Administration Committee, said recently. A hearing on the issue was scheduled for last week but has been delayed because a member has Covid, a spokeswoman said. Yesterday, Congress Trading (link) noted that House Speaker Nancy Pelosi’s (D-Calif.) husband, an active trader, reported a transaction in Tesla options worth $1,000,000 to $5,000,000.
OTHER ITEMS OF NOTE
— The Taliban reneged on a promise that girls in Afghanistan could attend high school from Wednesday. The Ministry of Education now says that schools for girls would not open until a plan could be drawn up in accordance with Islamic law.
— Coming: $2.9 billion in infrastructure grants. Department of Transportation Secretary Pete Buttigieg said Wednesday the administration was ready to dole out $2.9 billion in grants for state and local infrastructure projects, such as highway, bridge, freight, port and public transit expansions and repairs. The money is part of the bipartisan $1 trillion infrastructure bill that Biden signed into law four months ago.