The Week Ahead: September 12-18, 2016

Posted on 03/09/2017 10:26 AM

Continuing resolution | USDA S/D updates | WRDA | Fed speak   


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In Washington, the focus remains on putting together a spending plan to keep the government operating after September 30. Senate work also includes a WRDA bill. USDA today releases its monthly supply and demand updates.

Senate wants to accelerate exit. The Senate is scheduled to be in session through October 7, but lawmakers could attempt to finish up much sooner than that, perhaps this week, although that may be hard to reach – a vote to limit debate on a compromise spending bill might not come until Friday at the earliest.

Discussions continue about the Senate leaving after passing a bipartisan water resources bill (S 2848) and then a stopgap funding bill. But Republicans facing reelection are urging they want to leave town and get as much time as possible to campaign, especially those who are facing Democratic challengers not tied to a congressional voting schedule.

President Barack Obama plans to meet Monday with the top congressional leaders – House Speaker Paul Ryan (R-Wis.) McConnell, Reid, and House Minority Leader Nancy Pelosi (D-Calif.) at the White House to discuss a stopgap spending measure and Zika funding.

Senate leaders working on an agreement. Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.) are working on a continuing resolution (CR) deal to fund the government past the end of the Fiscal Year on September 30, as well as to provide needed supplemental funding to combat the Zika virus outbreak. McConnell said a CR through December 9 could come to the floor if senators can agree to it. The measure would extend funding at last year’s $1.067 trillion level.

WRDA up in Senate. The Senate wants to advance legislation to authorize Army Corps of Engineers projects and other water infrastructure improvements via the Water Resources Development Act (WRDA/S 2848). A cloture vote is scheduled for Monday on a manager’s amendment. The amendment would give states primary oversight of coal waste management programs. The Senate WRDA measure includes several provisions dealing with financial assistance for state and local water systems, including an emergency infrastructure program that could benefit Flint, Michigan, where the water was contaminated.

The House will consider a bill (HR 3590) that would repeal the income threshold set in the 2010 health care law used to determine eligibility for the tax deduction for medical care expenses. Also on the agenda: HR 5620, which would provide for removal or demotion of employees of the Department of Veterans’ Affairs based on performance or misconduct.

The hearing pace picks up as a House Ag subcommittee will examine the future of the Supplemental Nutrition Assistance Program (SNAP) while other panels will focus on State Department records, risks to the budget and economy, EPA methane regulations and the House Ag Committee looks at ag trade prospects with Cuba. On the Senate side, the Ag Committee will take up forest legislation and also hold a hearing on two nominations for members of the Commodity Futures Trading Commission (CFTC). Other hearings on tap include sessions to look at the fate of nuclear power in the US and on oversight of the Congressional Budget Office (CBO).

Brexit focus. The Senate Foreign Relations Committee plans a hearing Tuesday on US interests in the UK and Europe following the British vote to leave the European Union.

Presidential politics will pay a visit to Capitol Hill Tuesday when Donald Trump’s running mate, Mike Pence, speaks to Republican lawmakers. Pence, a former congressman who is now Indiana’s governor, is coming at Ryan’s invitation.

Primaries on Tuesday. New Hampshire, Delaware, and Rhode Island vote in the final statewide primaries before the November 8 election. In New Hampshire, Republican Representative Frank Guinta is opposed by businessman Rich Ashooh, who has called attention to a Federal Election Commission (FEC) probe of how Guinta funded his 2010 campaign. Guinta, who paid a fine but rebuffed requests by some Republicans to resign, said he is honoring a conciliation agreement with the FEC and focusing on issues like his state’s heroin crisis. The winner will face Democratic ex-Representative Carol Shea-Porter, who was unseated by Guinta in 2010, won a rematch in 2012, then lost again in 2014.

Republican Senator Kelly Ayotte’s (R-N.H.) defeat of former state Senator Jim Rubens would make formal an expected matchup with Democratic Governor Maggie Hassan, who is unopposed in the primary. The race will be one of the key races that determine whether Republicans keep their Senate majority in the 115th Congress.

In Delaware’s statewide district, the winner of a six-candidate Democratic primary will be strongly favored to succeed Representative John Carney, the Democratic nominee for governor.

Most of the economic updates for the week are clustered on Thursday. In fact, before then the schedule is very light. Tuesday's schedule has the monthly Treasury budget update followed by Import and Export Prices on Wednesday. The Thursday calendar is as follows: Weekly Jobless Claims, PPI-FD, Retail Sales, Philadelphia Fed Business Outlook Index, Industrial Production and Business Inventories. The week closes out with CPI data and Consumer Sentiment on Friday. How that barrage of data comes through on Thursday will be dissected report by report relative to how that plays in to the prospects for the Fed to increase short-term interest rates. Inflation data at the consumer and wholesale level will also be key, particularly if it shows something other than a subdued picture as it has for several months.

Today is key for Fed watchers. The appearance of Fed Gov. Lael Brainard on the schedule to deliver a speech in Chicago is the most-awaited Fed appearance since that of Fed Chairwoman Janet Yellen at Jackson Hole. The focus on Brainard comes as market participants are wondering whether she will stick to her stance as a dove or move to the hawk side on monetary policy outlook. She's not the only one on the schedule – Atlanta Fed's Dennis Lockhart and Minneapolis Fed's Neel Kashkari also are scheduled to deliver remarks. Kashkari isn't a voter until 2017 and Lockhart isn't until 2018, but their comments could get some attention, particularly if they shift their positions. Once Monday is done, then the attention for Fed folks shifts to that barrage of data Thursday as Tuesday brings the blackout period that starts one week before the Federal Open Market Committee (FOMC) meeting.

Today is the big day for agriculture as USDA will come with the September Crop Production report where traders look for a smaller corn crop peg compared to August (link). Plus, the Supply/Demand report is expected to see adjustments to the balance sheets and smaller carryovers compared to August for corn and soybeans. Plus, the S/D data will be watched for shifts in foreign and global production, trade and carryover levels. No matter what the reports say, they will still signal supplies remain more than plentiful. Plus, the Farm Service Agency (FSA) will release the second in their monthly installments of certified acreage data based on what farmers file with the agency relative to their participation in federal farm programs. Once that data is out, the attention will move back to the demand side and Thursday's Weekly Export Sales report that will show results from the first full week of the 2016/17 corn and soybean marketing year. Global ag developments could also garner attention, but traders appear to be putting most of their attention on demand for hefty US grain and soybean supplies.

The National Farmers Union will hold its legislative fly-in through September 14 to press lawmakers on recent high-profile mergers and acquisitions in the agriculture sector, such as China National Chemical Corp.'s planned acquisition of Syngenta AG and the proposed merger between Dow Chemical Co. and DuPont Co. USDA Chief Economist Robert Johansson is expected to speak to the group September 12.

Produce growers, processors and distributors will meet September 12-14 for the United Fresh Produce Association's annual conference, where they will hear updates on top agriculture issues such as the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. On Tuesday, Ambassador Darci Vetter, chief agricultural negotiator for the US Trade Representative, is a breakfast speaker at the confab. On Wednesday the conference will hear from two former USDA secretaries on agriculture policy and the presidential election. John Block, a surrogate for Donald Trump's campaign, and Dan Glickman, a surrogate for Hillary Clinton, will discuss issues facing the produce industry and how their candidates will address them.


 

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.

 

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