GOP Demands Answers from FBI Director Wray Over Trump Mar-a-Lago Estate Raid

China and Taiwan both make moves post Pelosi visit

FBI agents conducted what former President Donald Trump dubbed an “unannounced raid” at his Mar-a-Lago estate on Monday night amid a Department of Justice investigation into why 15 boxes of sensitive Trump-era government records were taken to the Palm Beach club.

The FBI’s search of Mar-a-Lago has Republicans upset. “I’ve seen enough,” House Minority Leader Kevin McCarthy (R-Calif.) tweeted hours after Trump confirmed that federal officials had searched his resort. McCarthy pledged that if Republicans take control of the House, "we will conduct immediate oversight of this department, follow the facts, and leave no stone unturned." He urged Attorney General Merrick Garland to “preserve your documents and clear your calendar.

USDA daily export sale: 133,000 metric tons of corn for delivery to China during the 2022-2023 marketing year.

China is extending its military exercises around Taiwan, and the China section includes some perspective. Today, Taiwan’s military fired dozens of shells off its southern coast in a simulation of a defense of the island. Taiwan’s military also accused Beijing of cyberattacks that rendered key government-run websites inaccessible.

Up to 80,000 Russians have been killed or wounded during the war in Ukraine, according to Pentagon official Colin Kahl. That number of casualties is "remarkable," Kahl said, considering Russia has "achieved none of Vladimir Putin's objectives" since invading Ukraine Feb. 24. The latest on the meager amounts of grain being shipped from Ukraine in the Russia/Ukraine section.

President Joe Biden is set to sign a broad competition bill Tuesday that includes $52 billion in domestic semiconductor research and development. Meanwhile, several announcements have been made recently about new chip and memory startups. We detail one of them below.

Phase 1 payments under the Emergency Relief Program (ERP) were $6.27 billion as of Aug. 7, up slightly from the initial total signaled by USDA last week. Details in Policy section.

Consumers are switching from pricey cuts of beef to less expensive chicken and other meats, as big suppliers like Tyson Foods reset their purchasing and production to meet changes in the market from farms to tables. Meanwhile, Conagra Brands will close half its distribution centers and heavily automate others as part of a supply-chain overhaul aimed at gaining $1 billion in cost savings.

Expect price hikes on chicken as a newly created company is poised to control 15% of the market.

Hottest U.S. export commodity these days may be wood pellets. The boom is the result of upheaval underway in global energy markets.

The container ship backup at the ports of Los Angeles and Long Beach fell to a new low of 10 vessels, according to the Marine Exchange of Southern California.

A soy-based asphalt technology discovered by accident at Iowa State University will be nationally available for commercial use next year. Details below.

Cox Enterprises will purchase digital-media company Axios for $525 million.

It’s Tuesday and that means elections in some states. We have a rundown of some of them in the Politics & Elections section.

Equities today: Global stock markets were steady to mixed overnight. U.S. stock indexes are pointed toward lower openings. Financial markets seem to be in a holding pattern ahead of crucial inflation data for July that are due on Wednesday. Consumer prices rose 8.7% after climbing 9.1% in June, according to the median forecast of economists. Meanwhile, consumer expectations for price increases declined sharply in the Federal Reserve Bank of New York's latest survey. In Asia, Japan -0.9%. Hong Kong -0.2%. China +0.3%. India closed. In Europe, at midday, London flat. Paris -0.4%. Frankfurt -0.9%.
 

     U.S. equities yesterday: The Dow ended up 29.07 points, 0.09%, at 32,832.54. The Nasdaq was down 13.10 points, 0.10%, at 12,644.46. The S&P 500 lost 5.13 points, 0.12%, at 4,140.06.

Agriculture markets yesterday:

• Corn: December corn futures fell 2 3/4 cents to $6.07 1/4.
• Soy complex: November soybeans fell 8 3/4 cents to $14.00. September soymeal fell $1.10 to $436.40. September soyoil rose 35 points to 65.35 cents.
• Wheat: September SRW wheat rose 4 cents to $7.79 3/4, while September HRW wheat fell 1/2 cent to $8.47 3/4. September spring wheat fell 5 3/4 cents to $8.80 3/4.
• Cotton: December cotton fell 54 points to 95.59 cents and near the session low
• Cattle: October live cattle rose 35 cents to $144.225, the contract’s highest closing price since May 4. September feeder cattle surged $2.225 to $185.65, the highest close since Feb. 23.
• Hogs: October lean hogs rose $1.90 to $100.30, a lifetime-high close for the contract. Nearby August hogs rose 97.5 cents to $121.80, the highest close for a nearby contract since June 2021. The CME lean hog index rose 48 cents to $122.09 (as of Aug. 4), 59 cents below last year’s high.
   

Ag markets today: USDA’s cuts to crop condition ratings Monday afternoon fueled buying in grain and soy markets overnight. As of 7:30 a.m. ET, corn futures were trading 12 to 14 cents higher, soybeans were mostly 26 to 29 cents higher and wheat futures were 13 to 18 cents higher. Front-month crude oil futures were slightly more than $1 higher, and the U.S. dollar index was down around 265 points this morning.

Technical viewpoints from Jim Wyckoff:

On tap today:

     • U.S. nonfarm labor productivity is expected to fall at a 5% annual pace in the second quarter from the prior quarter, and unit labor costs are forecast to rise 9.5%. (8:30 a.m. ET)
     • China's consumer-price index for July is expected to rise 2.9% from one year earlier, and its producer-price index is forecast to increase 4.5%. (9:30 p.m. ET)
     • President Joe Biden is set to sign a broad competition bill Tuesday that includes $52 billion in domestic semiconductor research and development.

Micron Technology plans to invest $40 billion through the end of the decade to build leading-edge memory manufacturing in multiple phases in the U.S. The planned investment, the largest in memory manufacturing in American history, will ultimately create up to 40,000 new jobs including approximately 5,000 highly paid technical and operational roles. Specific expansion plans and other details will be finalized in the coming weeks. "This legislation will enable Micron to grow domestic production of memory from less than 2% to up to 10% of the global market in the next decade, making the U.S. home to the most advanced memory manufacturing and R&D in the world," noted CEO Sanjay Mehrotra.

Americans are expecting less inflation in coming years, according to a recent survey by the Federal Reserve Bank of New York. Respondents’ median expectation in July was for an annual inflation rate of 6.2% in one year, down from the 6.8% they expected in June, the regional reserve bank said Monday. They expected inflation in three years to be at 3.2%, down from the 3.6% they expected in June, and inflation in five years to be at 2.3%, down from a previous 2.8%. Economists don’t see consumer expectations as a formal forecast but pay attention to such surveys as a sign of popular psychology that can influence price pressures.

U.S. regulators are weighing new rules for regional banks, which could complicate merger plans. The Federal Reserve and Office of the Comptroller of the Currency are discussing whether regional lenders should hold more long-term debt that would help them absorb losses in a downturn, the Wall Street Journal reported (link).

Market perspectives:

     • Outside markets: The U.S. dollar index is lower in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.758%. U.S. crude was around $91.75 per barrel and Brent around $97.80 per barrel. Gold and silver futures were, with gold around $1,806 per troy ounce and silver around $20.63 per troy ounce.

     • U.S. lawmakers are pushing the Federal Reserve to move swiftly toward issuing a digital dollar, to combat steps from China and others they say could one day threaten the U.S. status as the global reserve currency.

     • Average cost of a gallon of gas is down almost a dollar since the June peak, giving drivers some much-needed financial relief at the pump. But some analysts warn that low oil inventories will likely keep prices elevated. The national gas price average for regular gas as of today is $4.03, according to AAA; diesel at $5.12.

     • Hottest U.S. export commodity these days may be wood pellets. Outbound volumes are running ahead of last year’s record pace of more than 7.4 million metric tons and average prices before insurance and shipping have surged this year. The boom is the result of upheaval underway in global energy markets, the Wall Street Journal reports (link), with the premium on North American pellets growing because war has cut off supplies from Russia, Belarus and Ukraine to European power plants that burn them instead of coal. The big winner has been Enviva, a Bethesda, Md.-based business that accounts for the bulk of U.S. wood-pellet exports. The company’s output flows from ports along the Atlantic and the northern Gulf of Mexico to European utilities and to Asia. With new customers in hand, Enviva is building several new plants in the Southern Pine Belt with the aim of doubling production capacity.

     • 12.8 million is the projected container imports, in 20-foot-equivalent units, into major U.S. ports in the second half of 2022, down 1.5% from the same period in 2021 and about 5% below the first half of this year, according to the Global Port Tracker.

     • The container ship backup at the ports of Los Angeles and Long Beach fell to a new low of 10 vessels, according to the Marine Exchange of Southern California. Meanwhile, more U.S. importers are trying to renegotiate contract shipping rates set at high levels earlier this year.

     • A soy-based asphalt technology discovered by accident at Iowa State University will be nationally available for commercial use next year. Link for details. Researchers, who have been testing the product for roughly a decade, recently launched SoyLei Innovations, which is developing the rejuvenator product, which is a compound made of soybean oil that is mixed with recycled asphalt. Rejuvenator can reduce paving costs by as much as 80% compared to projects that use new materials, Eric Cochran, a chemical and biological engineering professor at ISU, said. Each acre of its pavement uses thousands of pounds of soybean oil. A nearly one-acre test site will be on display at the Farm Progress Show in Boone from Aug 30.-Sept 1.

     • Ag trade: Jordan made no purchases in its tender to buy 120,000 MT of milling wheat. Japan is seeking 82,955 MT of milling wheat in its weekly tender. The Philippines tendered to buy 120,000 MT each of wheat and feed barley.

     • NWS weather: Heat to continue from the Northwest into the Plains, some relief by Wednesday for the Northeast... ...Heavy Rain and Flash Flooding threat from the Ohio Valley into the Central Appalachians... ...Monsoonal Showers to continue from the Southwest, portions of California and into the Great Basin.

Items in Pro Farmer's First Thing Today include:

     • Grains strengthen amid weaker crop ratings
     • Corn, soybean and spring wheat CCI ratings decline
     • Consultant leaves U.S. yield estimates unchanged
     • Indonesia lowers palm oil export tax threshold
     • Last week’s cash cattle trade more active than thoughts
     • October hogs nearing contract high but more price strength expected

— Summary: The Pentagon gave its first estimates of the invasion’s toll on Russia, saying as many as 80,000 Russian troops have been wounded or killed in less than six months of fighting. The Pentagon also announced that the U.S. has sent anti-radar missiles to Ukraine, marking the first time the Defense Department has acknowledged sending the previously undisclosed weapons to aid Ukrainian forces. Meanwhile, Russia said it won’t support resuming inspections of its nuclear arsenal because of U.S.-imposed travel restrictions.

• Some 12 ships have left Ukrainian ports under the paper agreement worked out between Russia, Ukraine, Turkey and the U.N., with Turkey’s Defense Ministry saying that two additional ships left Chornomorsk on Tuesday. The two ships were the Ocean Lion (64,720 tonnes of corn destined for South Korea) and the Rahmi Yagci (5,300 tonnes of sunflower meal destined for Istanbul). Four ships that left Sunday were anchored near Istanbul and are to be inspected by representatives from the Joint Coordination Center (JCC). 

— USDA ERP payouts edge higher. Phase 1 payments under the Emergency Relief Program (ERP) were $6.27 billion as of Aug. 7, up slightly from the initial total signaled by USDA last week. The total payments include $5.49 billion for non-specialty crop growers and $782.2 million for specialty crop producers for losses suffered in 2020 or 2021. USDA’s initial announcement of ERP payments saw just over $6.2 billion in total payments made, with $5.45 billion to non-specialty crop producers and $760 million to specialty crop producers. 

     While numbers change daily as records are updated and the public dashboard is only updated every Monday, here is the breakdown by program year:

     2020: 139,842 unique producers
     2021: 120,534 unique producers

— China/Taiwan tensions remain high as China is conducting military exercises near Taiwan, with Taiwan saying it will conduct its own military maneuvers. China's Eastern Theater Command announced yesterday that it would conduct fresh drills focused on anti-submarine operations and air-to-sea strikes, suggesting that Beijing will keep up the pressure on Taiwanese defenses. Meanwhile, President Xi Jinping has laid out a template for operating ever closer to "space near Taiwan Island" after warning that its military will "never sit idly by" and "whoever plays with fire will get burnt."

     "I'm not worried, but I'm concerned they're moving as much as they are," President Biden told reporters in Delaware, referring to China. "But I don't think they're going to do anything more." In the meantime, the U.S. is keeping aircraft carrier USS Ronald Reagan and its strike group "on station in the general area to monitor the situation."

     Says one China watcher: “What began as a fairly restrained response to Pelosi’s visit has escalated into a major show of force. How far will Beijing go the next time it feels compelled to up the ante over Taiwan?”

— U.S. runs simulations of China war over Taiwan. As China waged extensive military exercises off Taiwan last week, a group of American defense experts in Washington was focused on their own simulation of a hypothetical U.S./China war over the island.

— Record car sales in China. China’s homegrown new-energy vehicle makers are booming as demand surges, with sales now forecast to hit a record six million this year in the world’s largest auto market. Warren Buffett-backed BYD Co., now a formidable rival to Tesla, more than tripled its sales of passenger cars in July to more than 162,000 vehicles from a year earlier, the China Passenger Car Association said Tuesday. BYD’s own data shows about half of those were pure electric and the rest hybrids. Tesla’s China unit saw sales fall 14% last month from a year ago to just over 28,000 cars, the association said. Several lesser-known Chinese startups are also emerging in a wider field of competitors, with some clocking up record sales last month.

— U.S. customs has detained shipments from several Chinese solar-panel suppliers, enforcing a new law targeting goods made with forced labor in China.

— Consumers are choosing to buy chicken and cheaper cuts of beef, Tyson Foods said on Monday, a sign shoppers are becoming more cost-conscious as food prices rise. Rather than buying more expensive steaks and loins, consumers are spending more on less expensive chicken and other meats, company officials said. Consumers are becoming more frugal as prices for essentials such as food and gasoline have become more expensive in recent months. Companies are paying close attention to shifts in demand as some retailers and consumer companies have issued profit warnings or projected falling sales in recent weeks as customers start to pull back on spending on certain items.

— Expect price hikes on chicken as a newly created company is poised to control 15% of the market, bumping the market share of the industry’s top four competitors over 60%. The company stems from grain trader Cargill and Wayne Farms owner ​​Continental Grain’s joint $4.5 billion acquisition of publicly traded Sanderson Farms. Link for details via Forbes.

— USDA rejects GAO finding on Thrifty Food Plan. USDA insists it followed all the applicable rules and processes in 2021 when it updated its Thrifty Food Plan, boosting costs under the program by an estimated $20 billion. GAO said in an opinion released July 28 that USDA should have submitted the final plan to lawmakers and the Comptroller General under the Congressional Review Act. In an emailed statement to CQ, USDA said: “The Department stands behind its process and the resulting decisions which were made in full compliance with USDA’s statutory and regulatory obligations,” a spokesman said. “The Department is reviewing GAO’s decision and, in the meantime continues, to provide benefits that help to feed more than 41 million people — 1 in 8 Americans —each month.”

— Summary:

• Global Covid-19 cases at 585,447,095 with 6,420,408 deaths.
• U.S. case count is at 92,241,308 with 1,034,021 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 604,235,972 doses administered, 223,035,566 have been fully vaccinated, or 67.69% of the U.S. population.

— Voters in Minnesota’s 1st congressional district today are voting both for a successor for the late Rep. Jim Hagedorn, who died earlier this year and on the same ballot voting in the primary for the November election. The Republican leading the GOP field is former Republican state Rep. Brad Finstad and the Democrat in the lead is Jeff Ettinger, the former CEO of Hormel Foods. Meanwhile, U.S. Rep. Ilhan Omar faces a Democratic primary challenger who helped defeat a voter referendum to replace the Minneapolis Police Department with a new Department of Public Safety. Democratic Gov. Tim Walz faces a little-known opponent as he seeks a second term. His likely challenger is Republican Scott Jensen, a physician and former state lawmaker who has made vaccine skepticism a centerpiece of his campaign and faces token opposition.

— In Wisconsin, three Democrats, Deb McGrath, Brad Pfaff and Rebecca Cooke, are fighting for their party’s nomination in the race to replace retiring Rep. Ron Kind (D-Wis.). Whoever wins will face Derrick Van Orden, the 2020 GOP nominee, in a top Republican target district. Meanwhile, the GOP race for Wisconsin governor features candidates alternately endorsed by Trump and Pence. Democrats are picking a candidate to face two-term GOP Sen. Ron Johnson for control of the closely divided chamber.

— In Connecticut, the Republican contest to face Sen. Richard Blumenthal (D-Conn.) pits Trump-backed Republican National Committee Member Leora Levy against former state House Minority Leader Themis Klarides, who won the state party’s endorsement, in another test of the former president's strength in primary races this cycle.

— In Vermont, voters are choosing a replacement for Democratic U.S. Sen. Patrick Leahy as the chamber’s longest-serving member retires.

— FBI searches Trump’s home. FBI agents spent several hours Monday at former President Donald Trump’s South Florida home and private club. Media outlets reported that the search was at least related to a Justice Department investigation into why and how 15 boxes of White House records — which included documents marked as classified — ended up at Mar-a-Lago instead of the National Archives. Agents seized documents while Trump himself was in New York on Monday. The search came as Trump faces escalating legal problems stemming from a House committee’s probe of the Jan. 6 pro-Trump insurrection at the Capitol and a Georgia investigation into election interference.

— Cox Enterprises will purchase digital-media company Axios for $525 million. Axios' founders Jim VandeHei, Mike Allen, and Roy Schwartz will continue to run the company.

— The federal government has shipped upward of 602,000 doses of Jynneos monkeypox vaccines since May, following the White House’s public health emergency declaration last week. The largest shipments have gone to the hardest-hit locales including New York City and California, though many major cities say they are strapped for supplies.