New Jobless Claim Fall Below 400,000 for First Time Since Pandemic

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Weather market fuels further commodity gains | Ag sector sleeping re: cyberattacks?


In Today’s Digital Newspaper


Market Focus:
• New jobless claims fall below 400,000 for first time since March 2020
• U.S. economic recovery unlike any in recent history
• Fed will sell off its Covid-era corporate debt holdings
• Harker: Fed needs to start discussing tapering timeline
• Fed’s Beige Book reports pickup in recovery, price pressures
• Summers again comments on inflation ahead
• Phase 1 repairs to I-40 bridge completed
• Dogecoin roars back

• Yuan cooling
• World food prices rise the fastest in over a decade in May
• Fifth gear for commodity bull market is here: weather
• Ag trade update

Grain and soy futures continue to climb
• Brazil infrastructure minister warns about disruptions on Parana River
• India may cut taxes on edible oil imports as domestic food prices on the rise
• India’s annual monsoon arrives
• Steady cash cattle action
• Pork prices still climbing

Policy Focus:
• Biden, Sen. Capito to talk again Friday on infrastructure  
• Is ag sector asleep re: ransomware/cyberattacks?
• FBI names suspect in JBS ransomware attack… prominent Russian cybercriminal gang
• Biden is hacked off  
• House Ag Chairman Scott notes concerns about Biden tax proposals
• Refresher on reconciliation process because Senate Dems want to use it again

China Update:
• Private gauge of China’s services sector retreated in May
• Biden to amend Trump’s China blacklist
• Chinese dairy sector trying to expand rapidly to meet surging demand

Trade Policy:
• U.S. to levy tariffs over digital-service tax but suspend implementation
• ITA delays preliminary determination on imports of organic soymeal from India
• CPTPP said it would open talks on admitting the U.K. 

Energy & Climate Change:

• Policies targeting fossil fuel workers in Biden’s infrastructure plan
• Exxon Mobil loses a third board seat to an activist investor
• Carbon cost in EU for importers of power, metal & fertilizers to be subject to carbon levy 

Livestock, Food & Beverage Industry Update:
• Food industry impacts continue regarding JBS cyberattack
• Walmart debuts private label beef
• Pork companies seek reversal of ruling preventing them from intervening in line-speed case
• USCA requests emergency relief for livestock haulers following JBS shutdown
• FDA: Don't eat cicadas if you have seafood allergies

Coronavirus Update:
• Biden pushes goal of 70% vaccination by July 4

• Anheuser-Busch InBev offers free beer to promote vaccinations

Politics & Elections:
• Pelosi asked what she thinks about retirement

Other Items of Note:
• Japan’s election
• Rivals OK deal to oust Israeli leader
• New York may change how America does antitrust
• A 1914 Babe Ruth "pre-rookie" card has been valued at $6 million
• You don’t send me flowers any more




Equities today: Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward triple-digit lower openings for the Dow. The U.S. indexes are trading not far below their recent record highs. Asian equities were mixed with support seen in tech shares following the modest rise in US trading Wednesday. The Nikkei was up 111.97 points, 0.39%, at 29,058.11. The Hang Seng Index declined 331.59 points, 1.13%, at 28,966.03. European equities are under pressure in early trading with the Stoxx 600 down 0.6% and regional markets showing losses of 0.5% to more than 1%.

     U.S. equities yesterday: The Dow finished up 25.07 points, 0.07%, at 34,600.38. The Nasdaq was up 19.85 points, 0.14%, at 13,756.33. The S&P 500 was up 6.08 points, 0.14%, at 4,208.12.


On tap today:

     • ADP employment report is expected to show the U.S. added 680,000 private-sector jobs in May. (8:15 a.m. ET) Update: Private payrolls rose by 978,000 in May, vs 680,000 estimate.
     • U.S. jobless claims are expected to fall to 393,000 in the week ending May 29 from 406,000 a week earlier. (8:30 a.m. ET) Update: Weekly jobless claims total 385,000, vs 393,000 estimate.
     • U.S. labor productivity in the first quarter is expected to increase 5.5% from the prior quarter, a slight upward revision from a preliminary reading of 5.4%. (8:30 a.m. ET)
     • IHS Markit's U.S. services index is expected to hold at 70.1 in May, unchanged from a preliminary reading. (9:45 a.m. ET)
     • Institute for Supply Management's services index is expected to tick down to 62.5 in May from 62.7 a month earlier. (10 a.m. ET)
     • Bank of England Gov. Andrew Bailey speaks on the financial sector and climate change risks at 12 p.m. ET.
     • Federal Reserve speakers: Atlanta's Raphael Bostic on the workforce and economic mobility at 12:30 p.m. ET, Dallas’s Robert Kaplan on the economy and monetary policy at 1 p.m. ET, Philadelphia’s Patrick Harker on the workforce and economic mobility at 1:50 p.m. ET, and Vice Chairman Randal Quarles on financial regulation at 3:05 p.m. ET.

U.S. economic recovery is unlike any in recent history, powered by consumers with extra savings, businesses eager to hire and enormous policy support. Businesses and workers are poised to emerge from the downturn less damaged than after recent recessions. New businesses are popping up at a record pace. But the speed of recovery means that shortages typical for late in an expansion are cropping up much sooner — not just of goods and raw materials but of labor. Looking to coax people back into the workforce, congressional lawmakers of both parties are considering incentives such as federal funding for hiring bonuses and expanded tax credits for employers. A handful of states are moving on their own. Link to more via the WSJ. Meanwhile, here is a link to a NYT item on how to track the U.S. economic recovery.


Fed to start selling off bonds bought as part of Covid actions. The Federal Reserve Wednesday announced they will “begin winding down” their portfolio of the Secondary Market Corporate Credit Facility (SMCCF) that was deployed by the central bank as part of Covid aid efforts. The temporary emergency lending facility closed Dec. 31, 2020. “SMCCF portfolio sales will be gradual and orderly and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds,” the Fed stated, adding that the New York Fed will “announce additional details soon and before sales begin.”

     As of April 30, the facility had $13.8 billion of loans outstanding, including about $8.6 billion of corporate bond exchange-traded fund (ETF) holdings and $5.2 billion of corporate bonds, according to Fed data. A Fed official emphasized the action is unrelated to monetary policy and the Fed’s monthly purchases of $120 billion in government securities. The Fed aims to complete its sales of bonds in the portfolio by year-end and will start soon by selling ETFs and then turn to selling off corporate bond holdings later in the summer.

Harker: Fed needs to start discussing tapering timeline. The Federal Reserve should begin discussing the time frame for paring back its bond-buying program, Philadelphia Fed President Patrick Harker said. “I think it is appropriate for us to slowly, carefully move back on our purchases at the appropriate time,” Harker said yesterday during a virtual Women in Housing and Finance event. “When that is, that is something we need to start discussing.” The U.S. central bank is currently buying $120 billion of Treasury and mortgage-backed securities per month as part of the policy program it put in place last year in response to the pandemic.

Fed’s Beige Book reports pickup in recovery, price pressures. The pace of the U.S. recovery picked up somewhat in the past two months, sparking price pressures as businesses contended with worker scarcity and rising costs, the Federal Reserve said. “The national economy expanded at a moderate pace from early April to late May, a somewhat faster rate than the prior reporting period,” the U.S. central bank said in its Beige Book survey released yesterday. “Overall price pressures increased further since the last report. Selling prices increased moderately, while input costs rose more briskly.”

     Higher prices were noted for “freight, packaging, and petrochemicals prices. Contacts reported that continuing supply chain disruptions intensified cost pressures.” Some businesses noted they were able to pass those higher costs on to consumers and expect that in the future, businesses said they “anticipate facing cost increases and charging higher prices in coming months.”

     Increasing level of Covid vaccinations and reopening of activities was notable for gains in the retail and restaurant sectors. Sales activity in the automobile sector were also noted along with impacts from computer chip shortages. Improved agricultural conditions were also noted with prices having increased along with land values. The recap focused on areas like tight labor supplies and rising prices. But despite those issues, the report indicated that business contacts providing information for the recap still indicated an overall optimism ahead on the U.S. economic front as the economy continues to recover from the Covid pandemic. It also suggests little impetus for U.S. central bankers to change their stance on monetary policy just yet.

     BlackRock Chief Executive Officer Larry Fink said that investors may be underestimating the potential for a spike in inflation. “Most people haven’t had a forty-plus year career, and they’ve only seen declining inflation over the last 30-plus years,” Fink said at a virtual event hosted by Deutsche Bank yesterday. “So, this is going to be a pretty big shock.”

Summers again comments on inflation ahead. "Policymakers at the Fed and in the [White House] need to recognize that the risk of a Vietnam inflation scenario is now greater than the deflation risks on which they were originally focused," declared former Treasury Secretary Lawrence Summers, who served under the Clinton administration. "Whatever was the case a few months ago, it should now be clear that overheating — not excess slack — is the dominant economic risk facing the U.S. over the next year or two." As noted, current administration economists feel different, anticipating near-term bursts of inflation that will recede as the economy returns to normal. Meanwhile, President Biden is also not holding back on additional stimulus, unveiling a $6 trillion budget for FY 2022 last Friday that would translate into annual deficits of over $1.3 trillion (and $1.8 trillion in 2022).

Phase 1 repairs to I-40 bridge completed. The Arkansas Department of Transportation (ARDOT) said on Twitter that the Phase 1 repairs of the I-40 bridge connecting Arkansas and Tennessee at Memphis have been completed “and now Kiewit Infrastructure Group will begin preparations for Phase 2 repairs. This includes cleaning up the worksite and extending the platform.” The ARDOT said that several teams were on-site this week “inspecting, weld testing, and performing routine maintenance” on the bridge while it remains closed to traffic. They also noted that the Tennessee “reported that design plans for Phase 2 repairs were released to Kiewit Infrastructure Group on Saturday night, which the contractor will use to procure needed materials.”

Market perspectives:

     • Outside markets: The U.S. dollar index is higher on a corrective bounce from recent selling pressure. The yield on the 10-year US Treasury note was higher, trading above 1.60%, tracking gains in most other global government bond yields. Gold and silver futures are under moderate pressure ahead of US economic updates, with gold under $1,895 per troy ounce and silver under $27.87 per troy ounce.

     • Crude oil prices have surrendered earlier gains and have in moved between slight losses and gains. U.S. crude was trading around $68.75 per barrel while Brent crude was trading around $71.35 per barrel ahead of U.. gov’t inventory data due later this morning, delayed a day by Monday’s U.. holiday. Futures rose in Asian action with U.S. crude up 38 cents at $69.21 per barrel and Brent up 41 cents at $71.76 per barrel.

     • Fifth gear for commodity bull market is here: weather. The ridge of high pressure in the Pacific NW, cutting moisture flow to the Northern Plains, is the center weather story, say traders. As a result, northern Plains will have heat through the weekend.  The Midwest, to the East, has moisture in the forecast early next week. The Southwest is dry, which should favor wheat harvest. Brazil remains dry. The dry weather in the Northern Plains and Canada is an additional variable for the oil market, says analyst/trader Richard Crow.  “The canola crop will become a question if dry weather continues.  Oil supplies with the growing renewable fuel mandates and facilities being built support the oil market.  New capacity producing renewable fuel could outstrip the ability to supply oil in the future?  The meal market will stay weak as the crush is for oil.”

     • Dogecoin rallied Wednesday after Coinbase Global said it would allow users to trade the joke cryptocurrency on a platform that is geared toward more experienced investors. Fresh tweets from Tesla Chief Executive Elon Musk also provided a catalyst. The cryptocurrency, which was designed to serve no real purpose, has a market value of about $53 billion.


     • Yuan cooling. China’s central bank is trying to curb the yuan’s rise against the U.S. dollar via cooling measures, primarily a hike in required reserves from 5% to 7%. Reason for the changed strategy: The value of the yuan increased by 11% over the last year after hitting a 12-year low, and it was expected to climb further.

     • World food prices rise the fastest in over a decade in May. World food prices rose in May at their fastest monthly rate since October 2010, according to the United Nations’ Food and Agriculture Organization (FAO). Global food prices have risen for 12 consecutive months and are at their highest level since September 2011. FAO’s food price index is now only 7.6% below the all-time high from February 2011. Also of note, while FAO is calling for record-setting global cereal production in 2021-22, it expects just a “marginal” increase in stocks. Global wheat production is expected to edge 1.4% higher in the coming marketing year to 785.8 MMT.

     • Ag demand: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. bought an estimated 94,444 MT of rice in an international tender for up to 134,994 MT of the grain, with the bulk coming from China. Jordan’s state grains buyer issued an international tender to buy 20,000 MT of wheat bran.

Items in Pro Farmer's First Thing Today include:

     • Grain and soy futures continue to climb
     • Brazil infrastructure minister warns about disruptions on Parana River
     • India may cut taxes on edible oil imports as domestic food prices on the rise
     • India’s annual monsoon arrives
     • Steady cash cattle action
     • Pork prices still climbing




— Biden, Sen. Capito to talk again Friday on infrastructure. President Biden and Sen. Shelley Moore Capito (R-W.Va.), the lead Republican negotiator on infrastructure talks, met for about an hour at the White House on Wednesday and made plans to speak Friday as the two sides discuss a potential bipartisan agreement. The White House described the meeting as a “constructive and frank conversation in the Oval Office about how we can drive economic growth and benefit America’s middle class through investing in our infrastructure” and said that Biden and Capito agreed to reconnect on Friday.

      Biden wants $1 trillion in new spending and continues to push corporate tax hikes as part of the pay-fors, Politico reported (the new money Biden wants would be atop a baseline of $400 billion).

     The GOP is considering another counteroffer that could come as soon as Friday.

     Bottom line: The gap continues but at the funding level, GOP insistence that taxes not be increased, and differences over pay-fors.

— Is the ag sector asleep re: ransomware/cyberattacks? Should boards of directors be held accountable? Talks with consultants on the topic of cyberattacks on businesses usually bring up this point: Why aren’t firms better prepared? Why aren’t the boards of directors insisting on strategies to deal with such events and if not, why aren’t they being held accountable?

     It's interesting that the same kinds of questions were being asked when the pandemic hit and disrupted supply chains across the agriculture sector. The questions raised at that point focused on why companies did not have adequate contingency plans, to which many indicated the sheer size of the pandemic was nearly impossible to plan for. It seems that as the world has progressed, the level of threats has increased but the plans that companies have prepared to deal with a disease outbreak or a cyberattack do not have the breadth and depth to deal with the kinds of impacts that are now being seen.

     The meat-reducing impacts of the cyberattack have certainly caught Congress’ attention. The infrastructure plan being negotiated by President Biden and lawmakers “absolutely” needs to include provisions to strengthen U.S. cybersecurity, Rep. Henry Cuellar (D-Texas), co-chair of the Congressional Beef Caucus, told Bloomberg Radio. Cuellar is a member of the House Appropriations Committee. Cuellar stressed that more workers are needed in the cybersecurity field. Congress needs to address cybersecurity threats in part by crafting a “comprehensive” national strategy and provide adequate oversight. On the issue of regulating cryptocurrency in a bid to curb cyberattacks, Cuellar said Congress needs to take several steps but it “won’t happen overnight,” so a partnership between the federal gov’t and private sector is needed to bolster security.

     The FBI said in a statement on Wednesday, “We have attributed the JBS attack to REvil and Sodinokibi and are working diligently to bring the threat actors to justice. We continue to focus our efforts on imposing risk and consequences and holding the responsible cyber actors accountable.”

     Food industry impacts continue regarding the JBS cyberattack. Wholesale prices for beef and pork rose following the attack, and meat buyers said price increases for consumers would likely follow if problems persisted. Prices for choice cuts of beef sold in boxes rose by $5.60 to $340.16 per hundred pounds on Wednesday, marking the biggest increase in at least a month, according to USDA data. JBS USA said Wednesday they are “on schedule” to resume production at all facilities today (June 3). “JBS USA and Pilgrim's continue to make significant progress in restoring our IT systems and returning to business as usual,” according to the statement from Andre Nogueira, JBS USA CEO. “Today [June 2], the vast majority of our facilities resumed operations as we forecast yesterday, including all of our pork, poultry and prepared foods facilities around the world and the majority of our beef facilities in the US and Australia.” Given progress made, Nogueira said, “we anticipate operating at close to full capacity across our global operations tomorrow [June 3].” Meanwhile, USDA said it had contacted several major meat processors to encourage them to add capacity where possible. The agency said it would continue to encourage U.S. food and agriculture companies to take steps to protect their information technology and supply chain infrastructure.

     Meanwhile, the meat producer hack is ratcheting up pressure for greater regulatory oversight of cryptocurrency’s role as a preferred method for ransom payments that are difficult to trace. Cybersecurity consultants and others says the Treasury Department should ramp up its enforcement of anti-money laundering laws and adopt reporting rules for cryptocurrency transactions following the hack of meat processor JBS SA. Cracking down on cryptocurrency payments would make it more difficult for hackers to profit off of foreign ransomware attacks. Of note: Hamas has seen a surge in cryptocurrency donations, enabling it to circumvent international sanctions.

     The Biden administration has proposed requiring the collection of data on foreign cryptocurrency investors active in the U.S., aiming to bolster international cooperation to help in a broader crackdown on tax evasion. The Treasury Department, in its “Greenbook” of revenue proposals released last Friday, proposed a requirement for cryptocurrency brokers, such as exchanges and hosted-wallet providers, to provide information to the IRS on foreign individuals indirectly holding accounts with them.

     Revelations of cyberattacks on transportation systems in New York and Massachusetts heightened concerns about the threat from hackers, in a week when the world’s largest meat processor was targeted. On Wednesday, a ransomware attack disrupted ferry services in Massachusetts and New York’s subway operator reported it had been hacked in April, though without disruptions. Emboldened by recent successes, hackers have shifted from data-rich companies to providers of key public needs. Link for details via the WSJ.

— Biden is hacked off. Responding to reports that Russian-backed hackers are behind the latest cyberattack on the JBS meat-processing giant, President Joe Biden bristled at the notion that Russian President Vladimir Putin was testing his patience. Biden said only that he is "looking closely " at possible retaliation against Russia, which intelligence reports say has been providing cover for groups like "DarkSide" and "REvil and Sodinokibi," which is blamed for the JBS hack that shut down meat processing plants across the world. The White House said it will be a topic of discussion for the two leaders when they meet June 16.

— House Ag Chairman Scott notes concerns about Biden tax proposals. House Agriculture Committee Chairman David Scott (D-Ga.) said he has “serious concerns” about how President Joe Biden’s proposed tax increases could affect farmers, ranchers and other small businesses. Other Democrats have raised questions about Biden’s tax plans. “While I appreciate that the proposal provides for some exemptions, the provisions could still result in significant tax burdens on many family farming operations,” Scott said in a letter (link) to Biden. The chairman noted that changes to how taxes are levied on inheritances could make it more difficult for farmers to take over family businesses.

— A refresher on reconciliation process because Senate Dems are getting it ready. Under the reconciliation process, lawmakers pass a budget resolution that then provides committees with instructions to craft legislation meeting the budget’s target. That process allows lawmakers to pass bills in the Senate with just a simple majority, rather than the 60 votes most bills require. The Senate is split evenly between Democrats and Republicans. Top Democrats have said they are open to using reconciliation, though the entire party would need to be on board. Vice President Kamala Harris could act as the tiebreaking vote.

     Democrats already used reconciliation to pass a $1.9 trillion coronavirus relief package earlier this year using the budget tied to fiscal year 2021, which ends Sept. 30. Although the Senate parliamentarian, the nonpartisan official who gives guidance about what is permitted, has indicated that lawmakers could technically use the same budget resolution to pass additional legislation, her subsequent guidance has indicated that could run into procedural challenges, according to a copy of the ruling viewed by the Wall Street Journal. Democrats have indicated they will likely try to pass a fiscal year 2022 budget resolution that could be used for passing additional legislation under reconciliation.

     But wait… Politico reports that “The Senate’s chief procedural referee has effectively killed a workaround Majority Leader Chuck Schumer eyed as a bonus opportunity to pass President Joe Biden’s agenda without Republican support.




Private gauge of China’s services sector retreated in May due to shrinking overseas demand. The Caixin China services purchasing managers index slipped to 55.1 from 56.3 in April, Caixin Media and research firm IHS Markit said. Still, the reading has held above the 50 mark that separates expansion from contraction for 13 straight months. Business activity and new orders rose sharply but the subindex of new export orders fell for the third time in four months. One familiar theme: “Inflationary pressure was enormous as price gauges continued to rise. Both the measures for input costs and the prices service providers charged rose to their highest points of the year,” said Wang Zhe, senior economist at Caixin Insight Group.

     China index

— Biden to amend Trump’s China blacklist. President Biden plans to amend a U.S. ban on investments in companies linked to China’s military this week, after the Trump-era policy was challenged in court and left investors confused about the extent of its reach to subsidiary firms. Reports note that under Biden’s amended order, the Treasury Department will create a list of companies that could face financial penalties for their connection to China’s defense and surveillance technology sectors. Until now, the financial sanctions and selection of targeted companies were tied to a congressionally mandated Defense Department report. The amended order, which Biden is expected to sign later this week, will change the criteria for blacklisting entities to capture those that operate in the defense or surveillance technology sectors. The Trump order targeted companies owned, controlled or otherwise affiliated with the Chinese military.

— Chinese dairy sector trying to expand rapidly to meet surging demand. Chinese demand for milk (and cheese) has been rising steadily and spiked during the Covid-19 pandemic when doctors touted its health benefits. While the country is the world’s third largest milk producer, its 34 MMT in output only satisfied around 70% of domestic needs in in 2020, Reuters reports. While dairy operations are working to expand, finding millions of more cows is challenging, feed costs are high and both land and water are in short supply. Nevertheless, more than 200 new Chinese dairy farm projects were announced last year, according to the consultancy Beijing Orient Dairy, who adds that 60% of those new projects plant to have herds of 10,000 head or more. That would require 2.5 million cows, which is about half the country’s current milking herd. Existing operations are also working to aggressively expand. China would normally look to import heifers from New Zealand to satisfy its need for cows, but New Zealand announced in April it would stop live cattle exports within two years due to animal welfare concerns. Brazil, the U.S. and European countries could prove good sources for breeder cattle, Dou Ming, chief economist at Beijing Orient Dairy, told Reuters.




— U.S. to levy tariffs over digital-service tax but suspend implementation. The U.S. said it will impose tariffs on the U.K. and five other countries (Austria, India, Italy, Spain and Turkey) in response to their taxes on U.S. technology companies but will suspend the levies for six months as it seeks to negotiate an international resolution. The proposed U.S. tariffs of 25% would target imports worth nearly $2 billion from six countries in a move designed to pressure those countries on taxes they have levied on large U.S. tech firms.

     The tariffs come as G7 and OECD nations negotiate agreements on how to better tax multinationals, including a global minimum corporate tax rate and a tax on the profits of large multinationals in each country they operate in, rather than the countries they are headquartered in for tax purposes.

— ITA delays preliminary determination on imports of organic soymeal from India. The International Trade Administration (ITA) will delay the deadline for a preliminary determination in the countervailing duty (CVD) investigation on imports of organic soymeal from India. The investigation was started April 20 and the preliminary determination was originally due June 25. Petitioners in the case made a request to delay that preliminary determination and ITA has now set that as Aug. 30. The request was made to “provide Commerce with sufficient time to analyze adequately all alleged subsidies received by the mandatory respondents during the period of investigation,” according to a notice (link) published in the Federal Register. The final determination is still due 75 days after conclusion of the preliminary determination.

— The CPTPP said it would open talks on admitting the U.K., potentially adding another U.S. ally while Washington itself stays away. The 11 members of the group, formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP, are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The U.K. applied to join the CPTPP on Feb. 1. The U.K.’s secretary of state for international trade, Elizabeth Truss, said membership was a “key part of our trade negotiations program as a newly independent trading nation.” Japanese officials have expressed hope that the U.S. would eventually rejoin the group or at least find some way to link up with the group.




— Policies targeting fossil fuel workers in Biden’s infrastructure plan. President Biden’s infrastructure plan calls on Congress to invest $40 billion for training to help "dislocated" workers transition into new clean energy jobs. It also invests $16 billion to employ "hundreds of thousands" of fossil fuel workers to plug leaking oil and gas wells and restore and reclaim abandoned coal mines. And it calls on Congress to offer companies subsidies to build or retool manufacturing and industrial facilities in rural areas to make clean energy technologies.

— An activist investor is likely to gain a third seat on Exxon’s board. The development will add leverage to press the company on its diminished profits and fossil-fuel focus. Exxon said Wednesday that an updated vote count showed shareholders backed a third nominee of upstart hedge fund Engine No. 1, which had already won two board seats last week. A final count could take days or weeks.

— Carbon cost in EU for importers of power, metal and fertilizers to be subject to carbon levy. The EU is planning to make importers of steel, cement, aluminum and fertilizers pay for the greenhouse-gas emissions embedded in those goods, Bloomberg reported (link), citing a source. The goal is to ensure EU firms are on a level playing field with competitors in more lax regimes as the bloc tries to become the world’s first climate-neutral continent by mid-century. The commission is considering a transition period of up to three years before full entry into force of the mechanism in January 2026, according to a draft proposal. The carbon border adjustment mechanism is to be unveiled on July 14

     The cost of emissions in the EU carbon market has soared 10-fold in the past four years as the bloc bolstered the program and vowed to step up climate action. Benchmark permits to pollute jumped to an all-time high of 56.90 euros on May 14 and ended the day at 51.40 euros on Wednesday.

     Carbon trade



— Walmart debuts private label beef. The launch of McClaren Farms comes two years after the retailer announced plans to develop an end-to-end supply chain for Angus beef.

— Pork companies seek reversal of ruling preventing them from intervening in line-speed case. Seaboard Foods, Quality Pork Processors, Clemens Food Group and WholeStone Farms Cooperative have turned to the U.S. Court of Appeals for the Eight Circuit in a bid to reverse a U.S. district court decision against them as they sought to intervene in the lawsuit over USDA line speed rules in U.S. pork slaughter plants. The companies sought to intervene in the 2019 lawsuit filed by the United Food and Commercial Workers Union against USDA over the line speed ruling as they sought to appeal a March ruling. U.S. District Judge Joan Ericksen May 20 ruled that the firms were not timely in their request. They filed a joint notice of appeal with U.S. District Court for the District of Minnesota and sought to stay Erickson’s ruling pending the appeal.

— USCA requests emergency relief for livestock haulers following JBS shutdown. On Wednesday, the United States Cattlemen's Association (USCA) sent a letter (link) to Secretary of Transportation Pete Buttigieg requesting immediate regulatory relief for transporters of live animals and fresh meat products following the impact of the cyberattack on global meat supplier JBS SA. In the letter, USCA requests the Federal Motor Carrier Safety Administration (FMCSA) provide emergency regulatory flexibility for motor carriers and drivers hauling both live animals and meat products:  "After reviewing reports from our members regarding the impact of the JBS outage, USCA strongly believes this event warrants immediate regulatory action to ensure grocery store shelves stay stocked of fresh meat products. Further, agency action following the May 7, 2021, ransomware attack of Colonial Pipeline provides a precedent for the issuance of such an emergency declaration to ensure supply chain continuity of essential consumer goods."

— FDA: Don't eat cicadas if you have seafood allergies. The U.S. Food and Drug Administration issued a warning for those interested in sampling cuisine containing Brood X cicadas: Stay away if you're allergic to seafood. The FDA tweeted Wednesday that people with allergies to seafood should steer clear of eating cicadas because of their relation to sea creatures. "We have to say it," the FDA tweeted. "Don't eat #cicadas if you're allergic to seafood as these insects share a family relation to shrimp and lobsters." The Brood X cicadas, which emerge every 17 years, surfaced this month in several states, including Pennsylvania, Virginia, Indiana and Tennessee. The plentiful insects have inspired several culinary creations that use the cicadas as a main ingredient.



Summary: Global cases of Covid-19 are at 171,706,512 with 3,692,510 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 33,307,423 with 595,833 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 296,912,892 doses administered, 136,155,250 have been fully vaccinated, or 41.5% of the U.S. population.

— Biden pushes goal of 70% vaccination by July 4. President Joe Biden Wednesday announced a goal of having 70% of adults having at least one Covid-19 vaccine by July 4, labeling June a “month of action” to meet that goal. “The more people we get vaccinated, the more success we’re going to have in the fight against this virus,” Biden said, noting broadening vaccines would bring “a summer of freedom, a summer of joy, a summer of get togethers and celebrations. An All-American summer.”

     Facts and figures. The U.S. Centers for Disease Control and Prevention (CDC) signaled as of June 2, 162,272,565 (62.9%) of those 18 or older had received at least one shot.

     Shots with a beer chaser. Anheuser-Busch announced Wednesday that it would offer free beer if the vaccine goal is met, saying in a statement they would “buy America’s next round” of beer, seltzer or nonalcoholic beverage once the country reached President Biden’s goal of having 70% of the adult population get at least one coronavirus vaccination by July 4. And apparently it is just a rumor that the Baltimore Orioles promised to send tickets to those who do not get vaccines.


— Pelosi asked what she thinks about retirement. Political commentator Mika Brzezinski asked Speaker of the House Nancy Pelosi (D-Calif.) what she thought about the word “retirement” in a video released Wednesday. In the interview posted by Forbes Women, Brzezinski asked Pelosi to respond to a list of words with her opinion. One of the words Brzezinski asked Pelosi to respond to was the word “retirement.” Pelosi laughed, looked at Brzezinski, and said, “What’s that? Brzezinski laughed back and said, “Exactly.”


— Japan’s election. Japanese Prime Minister Yoshihide Suga is likely to call a snap election in September, the newspaper Asahi Shimbun reported today. The vote would take place following the conclusion of the Tokyo Olympic and Paralympic Games in September, events that the vast majority of Japanese oppose, according to recent polls; 10,000 volunteers for the games have resigned in recent months due to health concerns, organizers said.

— Rivals OK deal to oust Israeli leader. Israeli Prime Minister Benjamin Netanyahu’s chief political rival formally declared Wednesday night that he had put together a governing coalition with sufficient parliamentary backing to dislodge Netanyahu, the country’s longest-serving leader. The 71-year-old prime minister has been a commanding political presence for a generation, but the new government will not be sworn in until later this month, which could mean a tense interlude for the country. If the government is sworn in within two weeks, Mr. Netanyahu — the country’s longest-serving leader — would cede power to the most diverse coalition in Israel’s history, including for the first time an independent Arab party. The change would be a major political shake-up for a nation seeking to protect a fragile truce with the Palestinian militant group Hamas.

— New York may change how America does antitrust. The New York State legislature is in session for another week and competition law is on the docket. State Senator Michael Gianaris told the NYT’s DealBook that he’s confident there will be action on “The 21st Century Anti-Trust Act,” legislation he sponsored that would dramatically alter current standards. The revamp is necessary, Gianaris said, because “now we have digital and tech economies that have upended everything.” Some 15 state and national labor and policy groups wrote a letter to legislators that DealBook is first to report. The organizations argue that the law would “rein in many abusive tactics corporations use against other firms and workers that are difficult to challenge under current antitrust law and precedent.” Market dominance would be presumed with 40% market share. Currently, companies qualify as dominant if they have 70% to 90% of a market.

— A 1914 Babe Ruth "pre-rookie" card has been valued at $6 million, making it the most expensive sports trading card of all time, Axios reports.

     Baseball cards

— You don’t send me flowers any more… The owner of a sunflower oil factory in Bulgaria has taken legal action after U.S. soldiers accidentally stormed his business during a NATO training exercise. The mix-up occurred while soldiers were simulating the clearing of an airfield in southern Bulgaria, and continued on to Marin Dimitrov’s factory, where workers watched on as gun-wielding soldiers stalked through the premises. The incident has led to a rebuke from the highest levels with Bulgarian President Rumen Radev calling it “absolutely unacceptable.” “We always learn from these exercises and are fully investigating the cause of this mistake,” the U.S. embassy in Sofia said in a statement. “We will implement rigorous procedures to clearly define our training areas and prevent this type of incident in the future.”



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