House to Vote Tuesday Evening on Senate-Passed $480 Bil. Hike to Debt Limit

USDA WASDE report Tuesday to include some big S&D revisions
 

Washington Focus

House Speaker Nancy Pelosi (D-Calif.) called House members back from their recess early to vote Tuesday evening on the Senate-passed short-term debt hike measure. If the House clears the bill (S 1301) and President Joe Biden signs it into law, it would raise the debt limit by $480 billion to $28.9 trillion, setting up another showdown that could take place in December (see table below). House Majority Leader Steny Hoyer (D-Md.) said he expects the work will be complete by Tuesday evening.

     Senate GOP Leader Mitch McConnell (R-Ky.) — who has faced criticism from his own members for proposing the short-term debt hike — vowed in a phone call and letter (link) to President Joe Biden that Republicans will not help raise the debt ceiling in December. He also railed against Majority Leader Chuck Schumer’s (D-N.Y.) speech, saying the Democratic senator’s “tantrum” had “poisoned the well” with GOP senators. “Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation. ...They cannot invent another crisis and ask for my help,” McConnell wrote.

     Republicans also say there were successful in denying Democrats their requested “blank check” for suspending the debt limit until after 2022 elections.

The Senate is on recess, but Democrats in the chamber continue to discuss ways to lower the $3.5 trillion price tag for President Biden’s social spending and climate change agenda (Build Back Better/BBB). Sen. Mark Warner (D-Va.) said it would come in “around $2 trillion” after negotiations. Warner in a Bloomberg Television interview said that he hopes the Democrats “will have a plan out shortly” and it will include new social-spending initiatives “as well as some long-overdue tax fairness.”

     Various groups have already sent letters and warnings to Democratic leaders to not touch their reconciliation spending levels. The groups include climate change proponents and the ag sector.

Some deadlines and extensions ahead:

The World Bank Group and the IMF hold their 2021 annual meetings in Washington on Oct. 11 to discuss the economic outlook, financial stability, and poverty. The confab runs through Oct. 17. Tuesday’s session includes an IMF press briefing on the World Economic Outlook update and on their Global Financial Stability Report.9

Economic Reports for the Week

Measures of inflation in China and the U.S. highlight this week’s economic dat

Monday, Oct. 11

• Americans to observe Indigenous Peoples’ Day. President Biden has proclaimed that the second Monday of October, when Columbus Day is traditionally marked, will also be a celebration of the contributions of indigenous peoples.   

Tuesday, Oct. 12

• Bureau of Labor Statistics (BLS) releases the Job Openings and Labor Turnover Survey. Consensus estimate is for 11.1 million job openings on the last business day of August, slightly more than the July figure, which was a record high.
• National Federation of Independent Business releases its Small Business Optimism Index for September. Expectations are for a 99 reading, slightly less than the August data.
• China’s exports, long a growth engine for the country’s economy, are expected to increase 21% from a year earlier in September, according to economists. That is down from a 25.6% gain in August. Meanwhile, inbound shipments are forecast to rise 19.1% from a year earlier, retreating from the 33.1% jump in August.
• International Monetary Fund (IM) releases its World Economic Outlook report during annual meetings.

Wednesday, Oct. 13

• MBA Mortgage Applications
• Federal Open Market Committee (FOMC) releases the minutes for its September monetary-policy meeting.
• BLS reports consumer price data for September. Economists forecast a 5.3% year-over-year rise, which would match the August reading. The core CPI, which excludes volatile food and energy prices, is seen increasing 4%, also even with the August data.  Higher energy prices fare fueling inflation concerns. Soaring prices for commodities including crude oil and natural gas could push up inflation in coming months, economists say. The resulting squeeze on U.S. households will likely be reflected in September's CPI.
• China’s factory-gate prices for September are expected to surge 10.4% from a year earlier, a pace that would surpass its previous peak in 2008, according to economists. Higher commodity costs have led to the rise in producer prices this year, but so far that hasn’t fed through to consumer inflation. Economists forecast the consumer price index rose only 0.7% from a year earlier in September.

Thursday, Oct. 14

• U.S. jobless claims are forecast to fall for the second consecutive week as employers hold on to workers in a tight labor market. The data on claims, a proxy for layoffs, will cover the week ended Oct. 9.
• BLS releases the producer price index for September. Consensus estimate is for a 0.5% month-over-month rise and for the core PPI to gain 0.4%. This compares with increases of 0.7% and 0.6%, respectively, in August.
• Fed Balance Sheet
• Money Supply  

Friday, Oct. 15

• Census Bureau reports on retail sales spending for September. Consumer spending is expected to decline 0.1% from August to $618 billion. Excluding autos, retail sales are seen rising 0.6% month over month after jumping 1.8% previously.
• University of Michigan releases its Consumer Sentiment Index for October. The consensus call is a for a 74.8 reading, two points more than the September figure. In August, the index hit a decadelong low as consumer concerns about inflation heated up.

Key USDA & international Ag & Energy Reports and Events 

Some big USDA S&D revisions are coming Tuesday, Oct. 12. USDA’s 2021-22 domestic balance sheets will reflect the Sept. 1 stocks data and the final 2021 wheat crop estimate, along with any changes to corn and soybean production. That could produce some major adjustments, especially for soybeans, which will see projected 2021-22 ending stocks rise sharply — potentially above 300 million bushels.

     On the energy front, the International Energy Agency on Thursday publishes its latest monthly oil market report, with supply and demand forecasts, preceded by OPEC’s assessment of the market on Wednesday. The IEA will also release its World Energy Outlook on the same day.

Monday, Oct. 11

     Ag reports and events:

• Malaysian Palm Oil Board data for September production and exports
• Malaysia Oct. 1-10 palm oil exports
• Holiday: Argentina, Canada, U.S.

Tuesday, Oct. 12

     Ag reports and events:

• Export Inspections
• Crop Progress
• WASDE
• Cotton Ginnings
• Crop Production
• Cotton: World Markets and Trade
• Grains: World Markets and Trade
• Oilseeds: World Markets and Trade
• World Agricultural Production
• Livestock and Poultry: World Markets and Trade
• China farm ministry’s CASDE outlook report
• AHDB grain market outlook conference
• French agriculture ministry’s crop production estimate
• EU weekly grain, oilseed import and export data
• Holiday: Brazil

     Energy reports and events:

• API weekly U.S. oil inventory report

Wednesday, Oct. 13

     Ag reports and events:

• Broiler Hatchery
• Feed Grains Database
• Meat Price Spreads
• Season Average Price Forecasts
• Wheat Data
• China’s first batch of September trade data, including imports of soybeans, meat and edible oils
• France AgriMer monthly grains report
• Brazil Unica cane crush, sugar output data (tentative)
• Holiday: Thailand

     Energy reports and events:

• API weekly U.S. oil inventory report
• EIA weekly U.S. oil inventory report
• U.S. weekly ethanol inventories
• Genscape weekly crude inventory report for Europe’s ARA region

Thursday, Oct. 14

     Ag reports and events:

• Cotton and Wool Outlook
• Oil Crops Outlook
• Dairy Monthly Tables
• Feed Outlook
• Rice Outlook
• Wheat Outlook  
• Port of Rouen data on French grain exports

     Energy reports and events:

• EIA weekly U.S. oil inventory report
• U.S. weekly ethanol inventories
• EIA natural gas storage change
• IEA monthly Oil Market Report
• Russian weekly refinery outage data from ministry
• Insights Global weekly oil product inventories in Europe’s ARA region

Friday, Oct. 15

     Ag reports and events:

• CFTC Commitments of Traders report
• Peanut Prices
• Weekly Export Sales
• Feed Grains: Yearbook Tables
• Turkey Hatchery
• Malaysia Oct. 1-15 palm oil exports
• FranceAgriMer weekly update on crop conditions
• Holiday: India

     Energy reports and events:

• Baker Hughes weekly U.S. oil/gas rig counts