U.S. & China to Hold First High-Level, In-Person Talks Since Russian Invasion of Ukraine

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Vilsack: USDA seeking info on competition in fertilizer, seed, farm inputs, food sector


Washington Focus

The House and Senate are both in session this week. But the key focus continues to be Russia’s war with Ukraine.

The U.S. and China will hold the first high-level, in-person talks since Russia’s full invasion of Ukraine, as the Biden administration continues to try to enlist Beijing to exert influence on its neighbor to end the crisis. The White House said National Security Adviser Jake Sullivan will meet in Rome on Monday with China’s top diplomat, Communist Party Politburo member Yang Jiechi.

U.S. officials say Russia has asked China for military assistance for its war in Ukraine, a request if confirmed that suggests Russian President Vladimir Putin has faced more setbacks than he imagined in his invasion.

So far, U.S. officials have said they haven’t seen evidence that Beijing has tried to circumvent sanctions on Russia, though Sullivan warned China against such a move on Sunday. A Chinese Foreign Ministry statement said the two sides would exchange views on global and regional issues of mutual concern, without directly mentioning Ukraine. “We believe that China, in fact, was aware before the invasion took place that Vladimir Putin was planning something,” Sullivan said on CNN on Sunday. “They may not have understood the full extent of it because it’s very possible Putin lied to them the way he lied to Europeans and others.” Sullivan said the U.S. is watching whether China provides material support or economic support to Russia. “It is a concern of ours,” he said. “I’m not going to sit here publicly and brandish threats, but what I will tell you is that we are communicating directly, privately to Beijing.”

Note: Check Monday's Policy Updates for more updates on the Russia/Ukraine situation. Source of map: Washington Post

Ukraine map

Senate agenda: The Senate Homeland Security and Government Affairs Committee will hold a Tuesday hearing on reforming management of federal records amid controversy over former President Donald Trump's handling of White House records.

     The House Rules Committee is holding a Thursday hearing on proxy voting — the system put in place during the pandemic to allow members to vote on legislation for their colleagues. Some Republicans have sought to eliminate it.

     A move away from normal trade relations with Russia. The House will consider legislation supported by lawmakers in both parties codifying President Biden's move to revoke Permanent Normalized Trade Relations (PNTR) with Russia, House Speaker Nancy Pelosi (D-Calif.) said in a statement.

On the economic front, the Federal Reserve on Wednesday is widely expected to hike rates for the first time since 2018. But as usual, it will be what traders see in the Fed’s statement and presser as investors and traders look to the central bank for its new forecasts for rates, inflation and the economy, given the uncertainty from the escalated geopolitical tensions.

USDA on Friday announced it is seeking information on competition in the fertilizer, seed, farm input and food wholesale and retail markets as part of a public inquiry into concentration in the sectors. “As I talk to farmers, ranchers and agriculture and food companies about the recent market challenges, I hear significant concerns about whether large companies along the supply chain are taking advantage of the situation by increasing profits — not just responding to supply and demand or passing along the costs,” USDA Secretary Tom Vilsack said in a statement (link).

     Vilsack has previously said USDA is studying competition in those markets, in keeping with an executive order last year by President Joe Biden to examine competition in agricultural and food markets.

     Vilsack also announced $250 million in USDA funding to promote U.S. production of fertilizer, which has been soaring in cost amid supply-chain shocks and then Russia’s invasion of Ukraine. Russia and Ukraine are both major producers of fertilizer. Vilsack told reporters details on how the funds will be spent haven’t yet been worked out. “We are telling the market and the world we have $250 million available to them and when they come back with ideas we can structure and frame a program,” he said.

     The Green Markets North American Fertilizer Index jumped 16% Friday to a new high. Prices for the widely used nutrient urea in New Orleans soared 22%, also reaching a record. And an index for potash in Brazil rocketed a record 34%.

     Fertilizer surge

Events of Note This Week

Monday, March 14

· Russia/Ukraine situation: cyberattacks. Center for Strategic and International Studies virtual discussion on “Cyber in the Ukraine Invasion.”

· Russia/Ukraine situation: possible war crimes. Sen. Lindsey Graham (R-S.C.) and Rep. Joe Wilson (R-S.C.) participate in a discussion on “Assessing the Conflict in Ukraine and Possible War Crimes.”

· Russia/Ukraine situation: Putin’s role. Woodrow Wilson Center virtual “Hindsight Up Front Ukraine” discussion focusing on the impact Russia's war on Ukraine is having on Europe and the role of Vladimir Putin.

· Russia/Ukraine situation: global financial impact. Washington Post Live virtual discussion on “the global financial impact of Russia's war in Ukraine, the latest on the effect of sanctions against Russia and what support is being offered to the people of the region as economic and human toll escalates.”

· Energy issues. Washington Post Live virtual discussion on Ukraine with Fatih Birol, executive director of the International Energy Agency.

· China and the Indo-Pacific. Mitchell Institute for Aerospace Studies virtual discussion on China and the Indo-Pacific.

· American Rescue Plan. Center for American Progress (virtual discussion on “The One-Year Anniversary of the American Rescue Plan.”

Tuesday, March 15

· Farm programs. Last day for farmers to make selections commodity programs, Agriculture Risk Coverage and Price Loss Coverage, for 2022. Also end date for those who planted cover crops and have crop insurance to apply for $5-per-acre premium benefit. Sales deadline for crop insurance in much of the country.

· Anti-hunger policy conference. USDA Secretary Tom Vilsack and White House adviser Susan Rice will speak to the virtual National Anti-Hunger Policy Conference.

· National Grain and Feed Association annual convention. In Charleston, South Carolina.

· Russia/Ukraine situation: Russian strategy. German Marshall Fund of the United States virtual discussion on “Russia's Southern Game: NATO's Southern Flank after the Ukraine Invasion.”

· Russia/Ukraine situation: Impacts in Asia. German Marshall Fund of the United States virtual discussion on “War in Ukraine: Implications for Japan and Security in Asia.”

· Russia/Ukraine situation: India issues. Henry L. Stimson Center virtual discussion on “The Ukraine Crisis and India's Russia Conundrum.”

· Supply chain issues.  Bipartisan Policy Center virtual discussion on Securing America's Supply Chains: A Discussion with Biden Administration Officials.”

· Indo-Pacific trade issues. Senate Finance Committee hearing on “The Promise and Challenge of Strategic Trade Engagement in the Indo-Pacific Region.”

· KORUS trade deal. Washington International Trade Association virtual discussion on “The Korea/U.S. Trade Agreement at 10 Years.”

Wednesday, March 16

· USDA climate change efforts. House Agriculture Committee hearing on “A 2022 Review of the Farm Bill: The Role of USDA Programs in Addressing Climate Change.”

· Russia/Ukraine situation: food and agriculture impacts. Center for Strategic and International Studies virtual discussion on “Agriculture and Food Security: Casualties of the War in Ukraine.”

· Russia/Ukraine situation: War crimes. House Foreign Affairs Europe, Energy, the Environment and Cyber Subcommittee hearing on “Early Signs of War Crimes and Human Rights Abuses Committed by the Russian Military During the Full-Scale Invasion of Ukraine.”

· Russia/Ukraine situation. Washington Post Live virtual discussion on Ukraine with Marie Yovanovitch, former U.S. ambassador to Ukraine.

· Russia/Ukraine situation: military issues. Washington Post Live virtual discussion with Marine Corps Commandant Gen. David H Berger, on the latest developments in Ukraine, how Russia's actions influence the future of warfare and how the conflict will impact future potential engagement with adversaries such as China.

· U.S. military activity in Europe. House Armed Services Committee hearing on “National Security Challenges and U.S. Military Activity in Europe.”

· Congress and stock trading. House Administration Committee hearing on “Stock Trading Reforms for Congress.”

· PPP review. House Small Business Oversight, Investigations and Regulations Subcommittee hearing on “An Empirical Review of the Paycheck Protection Program.”

· Carbon tax and trade issues. Peterson Institute for International Economics virtual discussion on “Can we design a carbon tax that doesn't create trade conflicts?”

· Chinese government actions. National Press Foundation virtual discussion on “How Beijing Uses its Power to Chinese Companies' Advantage in the Global Marketplace.”

· Southeast Asia ag issues. Business Council for International Understanding virtual discussion that is closed to the press on what USDA is doing to support agriculture climate goals in Thailand, Myanmar and Laos.

· U.S. policy in Southeast Asia. East-West Center in Washington virtual discussion on “U.S. Commitment to Southeast Asia in the Indo-Pacific Shadow: Outlook Under Biden and Beyond.”

· Clean water fund oversight. Senate Environment and Public Works Committee hearing on the “Oversight of the Clean Water State Revolving Loan Fund formula.”

· Forest management. House Oversight and Reform Environment Subcommittee hearing on “Fighting Fire with Fire: Evaluating the Role of Forest Management in Reducing Catastrophic Wildfires.”

· WRDA. House Transportation and Infrastructure Water Resources and Environment Subcommittee hearing on “Proposals for a Water Resources Development Act of 2022: Members' Day Hearing.”

· Small business climate. House Economic Disparity and Fairness in Growth Committee hearing on “Big Ideas for Small Businesses: Fostering American Entrepreneurship Through Starting, Sustaining and Growing Small Businesses.”

· Bioenergy research. House Science, Space and Technology Energy Subcommittee hearing on “Bioenergy Research and Development for the Fuels and Chemicals of Tomorrow.”

· Iran nuclear talks. Organization of Iranian American Communities virtual media briefing with a bipartisan group of senators and prominent former officials to discuss Iran policy and nuclear talks.

· China actions. Atlantic Council virtual discussion on “China Standards 2035, data privacy, and international technology standardization.”

· Cofie issues. House Oversight and Reform Coronavirus Crisis Subcommittee hearing on “Moving Beyond the Coronavirus Crisis: Perspectives From Public Health Experts Roundtable.”

· Indo-Pacific issues. Heritage Foundation hvirtual 2022 BC Lee Lecture with former Secretary of State Mike Pompeo on U.S. policy in the Indo-Pacific.

· Immigration. Inter-American Dialogue virtual discussion on “the Biden-Harris administration's efforts to tackle the root causes of migration from Central America to the United States.”

Thursday, March 17

· Russia/Ukraine situation: OECD views. The Organization for Economic Co-Operation and Development (virtual presentation on an “Assessment of the Impacts and Policy Implications of the War in Ukraine.”

· Russia/Ukraine situation: Impacts for the Middle East. Carnegie Endowment for International Peace virtual discussion on “Consequences of the War in Ukraine on the Middle East.”

· Russia/Ukraine situation: China’s Russia strategy. German Marshall Fund of the United States virtual discussion on “China's Russia Strategy: The Ukraine Crisis and Beyond.”

· Russia/Ukraine situation: Balkan impacts. Woodrow Wilson Center virtual discussion on “The Ukraine Crisis and the Balkans: What Changes, and What Doesn't.”

· Russia/Ukraine situation. Washington Post Live virtual discussion on the Russian Invasion of Ukraine.

· Russia/Ukraine situation:  Finland impacts. Washington Post Live virtual discussion on Finland's perspective on the war in Ukraine, its relationship with NATO and Europe's dependence on Russian energy.

· Ocean Shipping Reform Act. Reps. Dusty Johnson (R-S.D.) and Jim Costa (D-Calif.) lead a roundtable discussion with supply chain industry leaders. .

· China energy issues. U.S./China Economic and Security Review Commission virtual hearing on “China's Energy Plans and Practices.”

· Covid transition. Bipartisan Policy Center virtual discussion on “Transitioning Out of the Covid-19 Emergency Phase.”

· DOE nomination. Senate Energy and Natural Resources Committee hearing on the nomination of Kathryn Huff to be an assistant Energy secretary for nuclear energy.

· Tax filing season. House Ways and Means Oversight Subcommittee hearing on “The 2022 Filing Season,” with Internal Revenue Service Commissioner Charles Rettig.

· Digital assets and illicit finance. Senate Banking, Housing and Urban Affairs Committee hearing on “Understanding the Role of Digital Assets in Illicit Finance.”

· Green summit. Atlantic Council virtual discussion on “Road to the Summit: A green and equitable future for the Americas.”

· U.S./China foreign policy. Vandenberg Coalition virtual discussion on “the future of U.S./China competition and how the China Challenge is reshaping U.S/ foreign policy,” as part of the Future of Conservative Foreign Policy series.

· Cryptocurrencies. FiscalNote webinar on “The State of Cryptocurrency: Challenges, Regulations, and How to Leverage this Tech.”

Friday, March 18

· Geopolitical issues. Brookings Institution virtual discussion on “The new geopolitics of state fragility.”

Economic Reports for the Week

The Federal Reserve meets this week with traders nearly certain that a 25-point rate hike will be announced. The Fed's thinking on the timing of more rate hikes will be the focus. Key economic reports include a producer price report that could show a double-digit gain from a year ago and the update on retail sales for February.

    Econ reports 031422

Tuesday, March 15

  • Bureau of Labor Statistics releases the Producer Price Index (PPI) for February. The PPI is expected to jump 10% year over year, while the core PPI, which excludes volatile food and energy prices, is seen rising 8.7%. This compares with increases of 9.7% and 8.3%, respectively, in January. The 10% estimate would be the largest increase on record since 12-month data were first calculated in 2010.  
  • March Empire State Manufacturing

Wednesday, March 16

  • MBA Mortgage Applications
  • Census Bureau reports retail sales data for February. Spending on retail sales and food is expected to increase 0.3% month over month, to $652 billion. Retail sales jumped 3.8% in January.
  • Federal Open Market Committee (FOMC) announces its monetary-policy decision. The FOMC is expected to raise the federal-funds rate by a quarter of a percentage point to 0.25%-0.5%. Federal Reserve Chairman Jerome Powell all but announced this move in his testimony before Congress in early March. This would be the first increase to the federal-funds rate since December 2018 and very likely begins a yearlong cycle of rate hikes as the Federal Reserve battles four-decade high inflation. Wall Street has currently priced in seven quarter-point increases for this year. Powell will give a presser at 2:30 p.m. ET.
  • National Association of Home Builders releases its Housing Market Index for March. Consensus estimate is for an 80 reading, two points below the February figure. The index is below its late 2020 peak, but builders remain bullish on the housing market despite the twin headwinds of rising mortgage rates and supply shortages.
  • Import and export prices
  • Business inventories
  • Atlanta Fed Business Inflation Expectations

Thursday, March 17

  • Jobless Claims
  • Housing Starts
  • Phil. Fed Manufacturing Index
  • Industrial Production
  • Fed Balance Sheet
  • Money Supply  

Friday, March 18

  • National Association of Realtors reports existing-home sales for February. Economists forecast a seasonally adjusted annual rate of 6.1 million homes sold, 400,000 fewer than in January.
  • Conference Board releases its Leading Economic Index for February. Expectations are for a 120 reading, roughly even with the January data. The Conference Board predicts a 3% growth rate for gross domestic product this year, above historical trends.
  • Chicago Fed President Charles Evans speaks.
  • Bank of Japan announces its monetary-policy decision. The BOJ is expected to leave its key short-term interest rate unchanged at negative 0.1%. The central bank is bucking the trend of the majority of nations in raising interest rates despite the highest Japanese consumers’ expectations of inflation on record.

Key USDA & international Ag & Energy Reports and Events 

With USDA’s WASDE out of the way, the focus returns to South American crop prospects, trade demand relative to the Russian invasion of Ukraine and the March 31 USDA Planting Intentions report. Also of note: The International Grains Council’s monthly market report is released Thursday.

Monday, March 14

     Ag reports and events:

  • Export Inspections
  • Feed Grains: Yearbook Tables
  • North American Grain and Oilseed Crushings

Tuesday, March 15

     Ag reports and events:

  • Livestock, Dairy, and Poultry Outlook
  • Sugar and Sweeteners Outlook
  • EU weekly grain, oilseed import and export data
  • Malaysia’s March 1-15 palm oil export data

     Energy reports and events:

  • API weekly U.S. oil inventory report
  • China output data (Jan.-Feb.)
  • OPEC Monthly Oil Market Report

Wednesday, March 16

     Ag reports and events:

  • Broiler Hatchery
  • Hop Stocks
  • Turkey Hatchery

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • EIA Petroleum Status Report
  • U.S. weekly ethanol inventories
  • IEA monthly Oil Market Report
  • Genscape weekly crude inventory report for Europe’s ARA region

Thursday, March 17

     Ag reports and events:

  • Weekly Export Sales
  • Food Dollar Series
  • International Grains Council’s monthly market report

     Energy reports and events:

  • EIA natural gas storage change
  • Russian weekly refinery outage data from ministry
  • Insights Global weekly oil product inventories in Europe’s ARA region
  • China output data for base metals, oil products (Jan.-Feb.)

Friday, March 18

     Ag reports and events:

  • CFTC Commitments of Traders report
  • Peanut Prices
  • Honey
  • FranceAgriMer weekly update on crop conditions
  • Holiday: India

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • Second batch of China trade data (Jan.-Feb.)



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