Schumer Sends Some Reconciliation Text to Parliamentarian; Talks Continue on Package

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Waiting for Godot? U.S. to press India on subsidies for rice and wheat


                                                In Today’s Digital Newspaper


Senate movement on coming reconciliation package. Senate Majority Leader Chuck Schumer (D-N.Y.) will submit text today to the Senate parliamentarian reflecting an agreement among all Democrats — including Sen. Joe Manchin (D-W.Va.) — to allow Medicare to negotiate prescription drug costs. Other topics in the package have yet to be finalized. More in Policy section.

You likely have heard this before but… A deal to create a Black Sea corridor for Ukrainian grain could be close, Turkey’s president said on Tuesday. The deal could free millions of tons of grain locked within Ukraine’s borders due to Russian blockades. Turkish President Recep Tayyip Erdogan said in a Tuesday press conference that “in a week or 10 days we will intensify the talks and try to arrive at a result.” Italian Prime Minister Mario Draghi said that Turkey had “a central role” in the plan, which he said had been outlined at the G7 meeting of leading economies by U.N. Secretary General António Guterres. “That role is to guarantee the security of ships and ensure that the ships don’t carry arms” Draghi said, adding that it did not require demining the ports, potential routes had already been identified, and the working group had been established. The missing element was “the final agreement of the Kremlin,” he said. Meanwhile, Japan will pay for a $17 million project to help Ukrainian farmers store their grain in temporary shelters and help the government develop alternate transport routes for grain exports, since its Black Sea ports are blockaded.

Oil prices tumbled on Tuesday as recession fears spark worries that an economic slowdown will cut demand for petroleum products. The U.S. oil benchmark fell below $100 per barrel. But crude oil futures rose nearly 3% by early Wednesday as investors piled back in after the heavy rout in the previous session, shifting their focus again to supply concerns even as worries about a recession mounted. Meanwhile, retail gasoline prices have now fallen for 21 consecutive days, the longest losing streak since April 2020.

European lawmakers voted today to classify some natural gas and nuclear power as "green" energy.

Yield curve inverts. The yield on the 2-year Treasury jumped higher than the yield on 10-year notes, inverting what’s known as the yield curve. When that occurs, it’s usually considered an indication that a recession will happen soon — or is already underway.

Red states are winning the post-pandemic economy. By many measures, Republican-leaning states have recovered faster economically than Democratic-leaning blue ones, with workers and employers moving from the coasts to the middle of the country and Florida. Key: 341,000

jobs in red states have been added since February 2020, while blue states were short 1.3 million jobs as of May. More, below.

Walmart said it would charge some of its suppliers a new fee to transport goods to its warehouses and stores.

Mohammed Barkindo of Nigeria, who transformed the role of OPEC secretary-general and oversaw an expansion of the organization’s market role, died unexpectedly at the age of 63.

Sen. John Boozman (R-Ark.) praised U.S. Trade Representative Katherine Tai for initiating WTO consultations on India’s subsidies for rice and wheat. But the process could take years.

Barely a month after escaping a two-month lockdown, Shanghai residents were reminded that Covid-19 is far from beaten as authorities ordered a new round of mass testing.

After months of scandals, Boris Johnson’s tenure as British prime minister came closer to ending on Tuesday with the surprise resignation of two of his most high-profile ministers: Chancellor Rishi Sunak and Health Minister Sajid Javid.

A special grand jury in Fulton County, Ga., is subpoenaing Rudy Giuliani and other advisers to former President Donald Trump, part of a Democratic county prosecutor’s investigation into efforts to overturn Georgia’s 2020 election.

The Biden administration is suing Arizona over its new rule requiring proof of citizenship to vote for president.



Equities today: Global stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. U.S. stock indexes are pointed toward weaker openings. In Asia, Japan -1.1%. Hong Kong -1.2%. China -1.4%. India +1.2%. In Europe, at midday, London +1.5%. Paris +1.6%. Frankfurt +1.4%.

     U.S. equities yesterday: The Dow was down 129.44 points, 0.42%, at 30,967.82. The Nasdaq rose 194.39 points, 1.75%, at 11,322.24. The S&P 500 gained 6.06 points, 0.16%, at 3,831.39.

Agriculture markets yesterday:

  • Corn: December corn fell 29 cents to $5.78 1/2, the contract’s lowest settlement since Feb. 4.
  • Soy complex: November soybeans plummeted 79 1/4 cents to $13.16, the lowest close price since Jan. 24. August soymeal fell $11.70 to $410.40. August soyoil fell 481 points to 59.62 cents.
  • Wheat: September SRW wheat tumbled 39 cents to $8.07, the lowest closing price since Feb. 18. September HRW wheat sank 51 1/2 cents to $8.62. September spring wheat fell 58 cents to $8.90.
  • Cotton: December cotton dropped the 400-pojnt daily limit to settle at 93.48 cents per pound.
  • Cattle: August live cattle fell $1.675 to $132.925, while August feeder futures tumbled $1.80 to $172.70.
  • Hogs: August hogs rose $2.975 to $105.95, the contract’s highest closing price since June 24. The next CME lean hog index is expected at $110.58, down 12 cents from Tuesday’s figure and the fourth straight daily decline.

Ag markets today: Corn futures traded lower for much of the overnight session but are mildly firmer this morning, while soybeans and wheat are showing stronger corrective gains following Tuesday’s sharp losses. As of 7:30 a.m. ET, corn futures were trading around a penny higher, soybeans were 10 to 15 cents higher, SRW wheat futures were mostly 18 to 19 cents higher, HRW wheat was 12 to 13 cents higher and HRS wheat was 3 to 6 cents higher. Front-month U.S. crude oil futures were around 75 cents higher and the U.S. dollar index is up around 450 points this morning.

Technical viewpoints from Jim Wyckoff:

     July 6 Corn

     July 6 Soybeans

     July 6 Crude

     July 6 Bonds

     July 6 Gold

On tap today:

     • New York Fed President John Williams gives opening and closing remarks at a New York Fed event at 9 a.m. ET and 10:10 a.m. ET.
     • S&P Global's U.S. services index for June is expected to tick down to 51.4 from a preliminary reading of 51.6. (9:45 a.m. ET)
     • Institute for Supply Management's services index is expected to fall to 54 in June from 55.9 one month earlier. (10 a.m. ET)
     • U.S. job openings are expected to fall to 11.1 million in May from 11.4 million one month earlier. Follow our coverage here. (10 a.m. ET)
     • Federal Reserve releases minutes from its June 14-15 meeting at 2 p.m. ET.
     • President Joe Biden will travel to Cleveland, Ohio and meet union workers and retirees to announce the final rule implementing the American Rescue Plan’s Special Financial Assistance program, which aims to protect workers in multiemployer pension plans faced with significant cuts to benefits.

Fed inflation expectations index forecast to show big increase. A broad index of inflation expectations that Federal Reserve Chair Jerome Powell flagged as being partly behind June’s jumbo interest-rate increase is expected to show a big rise when it’s published later this month, economists said.

Nothing on horizon to rival dollar’s status, Fed study finds. The dollar’s prime international status remains unchallenged, according to a study by Federal Reserve Bank of New York staff, despite challenges from sources including geopolitics and technologies like digital currencies. Even so, the study cites some factors that could erode the international use of the dollar over time.

Forty-six million people moved to a different ZIP Code in the year through February 2022, the most in any 12-month period in records going back to 2010, according to a Moody’s Analytics analysis of Equifax consumer-credit reports. The states that gained the most, led by Florida, Texas and North Carolina, are almost all red, as defined by the Cook Political Report based on how states voted in the past two presidential elections. The states that lost the most residents are almost all blue, led by California, New York and Illinois.


Red states are winning the postpandemic economy. The pandemic has changed the geography of the American economy. By many measures, red states — those that lean Republican — have recovered faster economically than Democratic-leaning blue ones, with workers and employers moving from the coasts to the middle of the country and Florida, the Wall Street Journal reports (link). Since February 2020, the month before the pandemic began, the share of all U.S. jobs located in red states has grown by more than half a percentage point, according to an analysis of Labor Department data by the Brookings Institution think tank. Red states have added 341,000 jobs over that time, while blue states were still short 1.3 million jobs as of May.

     Red states

Warmart will reportedly charge some suppliers new fees in response to higher transportation costs. A memo seen by the Wall Street Journal said that the new fees were the result of “Walmart adapting to the significant transformation and increased cost seen in the transportation industry over the past few years.” Amazon has made a similar move.

Market perspectives:

     • Outside markets: The U.S. dollar index is slightly weaker after hitting a 20-year high Tuesday. The yield on the 10-year U.S. Treasury note is fetching 2.814%. The 2-year and 10-year note are presently inverted (meaning the 2-year yield is higher than the 10-year), which is another clue that the U.S. economy is teetering on recession. Gold futures are weaker with silver firmer ahead of U.S. trading, with gold around $1,762 per troy ounce and silver around $19.20 per troy ounce.

     • Oil prices tumbled below $100 a barrel on Tuesday for the first time since May, falling more than 8% amid ongoing supply concerns and growing fears of a global recession. Futures for the U.S.-based West Texas Intermediate (WTI), fell Tuesday by 8%, or $8.67, trading at $99.76 per barrel for the first time since May 11. Today, Nymex crude oil prices are firmer and trading around $100.50 a barrel. Meanwhile, futures for international benchmark Brent crude fell by $7.7 to $104.76 per barrel.

        Crude drop

     • Ag trade: South Korea purchased 140,000 MT of corn from unspecified origins and 65,000 MT of feed wheat likely to be eastern European origin. Japan tendered to buy 70,000 MT of feed wheat and 40,000 MT of feed barley.

     • NWS weather: Showers and thunderstorms with excessive rainfall and severe weather possible through midweek from the High Plains to the Mid Atlantic and Southeast... ...Dangerous heat and humidity to continue from parts of the Central/Southern Plains to the Mid-Atlantic and Southeast.

        NWS 070622

Items in Pro Farmer's First Thing Today include:

     • Corrective buying overnight
     • Corn, soybean CCI ratings drop, spring wheat improves
     • Eurozone retail sales increase, but purchases of essentials declines
     • Light beef movement
     • Hog traders expecting cash market strength



— Summary: After capturing Luhansk earlier this week, Russia is now laying siege to Donetsk, the other part of the Donbas region of Ukraine. Pavlo Kyrylenko, the governor of Donetsk, urged residents to flee. He said on Tuesday that getting as many as 350,000 Ukrainians to evacuate is necessary to save lives and enable the Ukrainian army to better defend towns from Russia’s continued advance.

  • Strategy ahead. Senate Armed Services Committee Chairman Jack Reed (D-R.I.), during a telephone interview with the New York Times, said the advanced long-range artillery supplied to Ukraine by the U.S.  will be a critical weapon in halting Russia’s gains. Link for details.
  • Ukraine has lost 20% of its territory and continues to warn Western leaders that it is being outgunned by Russia 10-to-1 in artillery.

— Market impacts:

  • Ukraine expects grain crop of at least 50 MMT. Ukraine expects a grain harvest (not including oilseeds) of at least 50 MMT this year, which is “not bad given all the difficulties,” the country’s first deputy agriculture minister said, though down sharply from last year’s record 86 MMT crop. The official says most of Ukraine’s wheat crop will be milling quality and the country would need to export at least 30 MMT of grains in 2022-23.
  • Ukraine grain traders union raises production forecasts.  Ukraine’s grain traders union UGA revised up its forecast for the country’s grain and oilseed production by 2.9 MMT to 69.4 MMT, including 27.3 MMT of corn, 20.8 MMT of wheat, 9 MMT of sunflower seed and 1.65 MMT of rapeseed. UGA says the country will be able to export 10 MMT each of corn and wheat in 2022-23, with total grain and oilseed exports likely to be between 25 MMT and 31.5 MMT, depending on the situation with blocked ports.



— Senate movement on coming reconciliation package. Senate Majority Leader Chuck Schumer (D-N.Y.) will submit text today to the Senate parliamentarian reflecting an agreement among all Democrats — including Sen. Joe Manchin (D-W.Va.) — to allow Medicare to negotiate prescription drug costs. The Democratic proposal would allow Medicare to begin negotiating on the price of prescription drugs in 2023, according to a summary of the provisions. The parliamentarian will then begin the “Byrd Bath” review process to make sure the proposal conforms with the Senate’s arcane reconciliation rules. The remainder of the package is murky but will likely include some Green New Deal language that includes an incentive payment for Sustainable Aviation Fuel (SAF). Schumer and Manchin have been meeting regularly about what might make it into the bill, talking about tax reform and climate provisions.



— U.S. Secretary of State Antony Blinken departs Washington today on a trip to Southeast Asia which will include stops in Bali, Indonesia, for a meeting of G-20 foreign ministers, as well as Bangkok, Thailand. The State Department has confirmed that Blinken will meet with his Chinese counterpart Wang Yi while in Bali. The Chinese Foreign Ministry said the two diplomats would “exchange views on current China/U.S. relations and major international and regional issues.”

— White House released its annual report to Congress disclosing the salaries of the 454 staffers working in the executive office of the president. Link to report.

— USDA announced six senior level appointments, including naming Eric Deeble Deputy assistant secretary for the Office of Congressional Relations. Deeble was previously the policy director at the National Sustainable Agriculture Coalition. Link for details.

— OPEC chief Barkindo dies. OPEC Secretary-General Mohammed Barkindo passed away at the age of 63, just weeks before his term leading the cartel was to end July 31. The native Nigerian had led the Nigerian National Petroleum Corporation (NNPC) and oversaw OPEC since 2016. Barkindo’s successor at OPEC had already been chosen to take over August 1 — Haitham al-Ghais from Kuwait.  

     Barkindo was specifically involved in clinching a deal with non-OPEC, energizing the group by bringing Russia and other key producers on board for a series of production cuts since 2017. That agreement shored up the market following the supply glut and oil plunge of 2014-16, while he also kept the alliance together through the coronavirus pandemic, when the price of oil crashed and even briefly went negative.


— China reported its first cases of the highly transmissible Omicron BA.5.2 subvariant of Covid-19. The cases were detected in Xi’an; authorities sent parts of the city in central China into lockdown in response. Meanwhile Shanghai is once again reporting new cases of Covid-19, raising fears of new restrictions.



— Sen. Boozman applauds U.S. request for WTO consultations with India on wheat, rice subsidies. The request by the U.S. and other countries June 29 for consultations with India over their subsidies for rice and wheat got the thumbs up by Senate Agriculture Committee Ranking Member John Boozman (R-Ark.). “America’s farmers deserve a level playing field,” Boozman said in a statement. “I appreciate the Office of the United States Trade Representative (USTR) taking this action. Furthermore, I thank the governments of Australia, Canada, Japan, Paraguay, Thailand and Uruguay for joining the U.S. in these consultations on India’s subsidies for rice and wheat.”

     Perspective: India has “worked” the WTO for years with all sorts of delaying tactics. In this case they will further resist calls for it to reduce their use of subsidies to build the stockpiles and even to report those subsidies to the WTO. No dates have been set for the consultations. It will take years for this case to unfold, if it does.




  • Global Covid-19 cases at 551,283,678 with 6,342,322 deaths.
  • U.S. case count is at 88,067,088 with 1,018,364 deaths.
  • Johns Hopkins University Coronavirus Resource Center says there have been 592,269,252 doses administered, 221,924,152 have been fully vaccinated, or 67.35% of the U.S. population.

— Covid was the third leading cause of death in the U.S. in 2020 and 2021, accounting for 1 in 8 lives lost, according to a new review of death certificate data in JAMA Internal Medicine. A National Cancer Institute study found Covid trailed only heart disease and cancer among the leading causes of death from March 2020 through October 2021.



GOP Gov. Glenn Youngkin expands political operation as 2024 speculation grows. Virginia Gov. Glenn Youngkin is preparing to fan out across the country to stump for Republican candidates on the midterm election ballot as he tests his appetite for national politics and a possible 2024 presidential bid. Youngkin raised $2.64 million in the first half of the year for his PAC as he builds out his political operation ahead of 2024, the Washington Examiner reports. Most immediately, he’s planning to travel the country to stump for GOP candidates in the midterms. “The governor’s haul more than doubled what his three immediate predecessors raised during their first six months in office and reveals a chief executive not content to return to private life after concluding the single, four-year term afforded to him under Virginia’s constitution.”

— Americans’ confidence in the country’s institutions continues to drop to record lows in the latest Gallup survey. The presidency and the Supreme Court suffered the most precipitous declines over the past year in the percentage of Americans who have a great deal or quite a lot of confidence in them (falling 15 and 11 points, respectively). Congress is still at the bottom of the barrel (just 7%). Small business and the military are the only institutions to break 50%, while organized labor is the only one not to see a decline from a year ago. Link for details.

— Just 10% of Americans say the country is headed in the right direction, compared to 88% who think it’s on the wrong track, in a new Monmouth poll (link). That’s a record low going back to 2013. (The generic congressional ballot finds Republicans and Democrats tied at 47%, and President Joe Biden’s approval rating has dipped to 36%.)

— Gov. Greg Abbott is still the favorite to win re-election over Beto O’Rourke, but the end of Roe v. Wade and the massacre in Uvalde have upended the race: “O’Rourke has been able to keep the race competitive in Texas — and Abbott’s campaign is not taking any chances,” The Texas Tribune’s Patrick Svitek reports (link). O’Rourke’s campaign has seen a burst of energy of late, while a poll last month showed Abbott’s lead shrinking. But Abbott, who hasn’t moved to the center much for the general, remains confident that inflation and immigration will matter more to voters. And his campaign is attacking O’Rourke much more aggressively than Sen. Ted Cruz (R-Texas) did in 2018.

— Department of Justice on Tuesday said it is suing the state of Arizona seeking to block a law that would force residents beginning in January to provide proof of citizenship in order to vote in federal elections. The law could remove tens of thousands of people from Arizona voting rolls.

— A Georgia prosecutor subpoenaed Rudy Giuliani, Senator Lindsey Graham and five others with ties to Donald Trump as part of an investigation into the former president’s election interference.

— Boris Johnson’s premiership is looking shakier than ever after ministers continued to quit, triggered by the initial resignations of Rishi Sunak, the former chancellor, and Sajid Javid, the former health secretary. In all, 13 have resigned from Britain’s government in less than 24 hours. All question the prime minister’s fitness for leadership, particularly his appointment of a senior government figure despite knowing about credible misconduct allegations against him.



Sen. Patrick Leahy (D-Vt.) has been released from the hospital following his surgery for a broken hip last week. He’s now in a rehabilitation facility “where he will continue to recover and focus on his physical therapy regimen,” according to his staff.



More than 250,000 dependent visa holders across the U.S are at risk of leaving the country in which they were raised after aging out of qualifying for lawful status under their parents' visas. Thousands have already aged out and have been able to stay under temporary visas or have voluntarily left the country. Link to LA Times item.

— Trump-era revisions to endangered species rules tossed by judge. The Trump administration’s changes to Endangered Species Act regulations no longer remain in effect as of Tuesday after a federal judge in California rejected the federal government’s request to keep them in place. The ruling was a win for the conservation groups and 18 other states and cities that challenged the Trump-era rules.


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