USDA Crop Production/WASDE Reports on Monday Key to Price Outlook

USDA Thursday will try again to release weekly export sales report

Washington Focus

The House finally gets back to work after its long summer recess, joining the Senate in their busy to-do list because, as usual, they didn’t get done many of the issues they should have earlier. Link to a Pro Farmer newsletter item on the topic that appeared in this week’s newsletter.

The biggest congressional priority is a stopgap spending measure to keep the gov’t running beyond Oct. 1, the beginning of fiscal year (FY) 2023. The House could work on a Continuing Resolution (CR) this week, but history shows this usually goes down to the wire. And there are issues that will/could delay it, including differences among Democrats on including Senate-promised language on permitting that was part of the deal with centrist (at times) Sen. Joe Manchin (D-W.Va.) to sign off on the Inflation Reduction Act (reconciliation) measure.

Ag disaster aid for 2022 crops and livestock could be part of the CR but will most likely be kicked to the post-election, lame-duck session of Congress via an omnibus spending bill.

USDA on Monday issues its updated crop production and supply/demand estimates. We take a look at what could be coming below.

What do USDA and NASA have in common? They both several times scratched some important things. In the case of NASA, it was the U.S. return to the moon. As for USDA, it’s a lengthy hold on the Weekly Export Sales report. USDA says it will come with a lot of export data Thursday.

USDA said Friday it would release four weeks of export sales data on Sept. 15. “The Aug. 18 and Aug. 25 data will be combined in a single report,” USDA said in a statement. “Separate reports will be issued for the reporting periods ending Sept. 1 and Sept. 8.”

On Friday, a looming rail strike could deal another blow to America’s economy. Unions representing more than 90,000 workers at the nation’s freight railroads are poised to go on strike on Sept. 16, a move that could bring nearly 30% of the nation’s freight to a grinding halt. Watch for our special report on this topic.

USDA Secretary Tom Vilsack speaks Monday to members of the National Farmers Union, who are holding their annual fly-in this week. They will also hear from Deputy Secretary Jewel Bronaugh and Undersecretary for Marketing and Regulatory Programs Jenny Lester Moffitt.

Biden administration leaders on Tuesday will address biofuel proponents as EPA Administrator Michael Regan and Bronaugh will speak to attendees in Washington at the Growth Energy fly-in.

Gorsuch says report coming on Supreme Court leak investigation. Supreme Court Justice Neil Gorsuch said late last week that the investigation into the leaked Supreme Court draft opinion signaling the reversal of Roe v. Wade is ongoing and that a report on the findings is forthcoming. (Definition of forthcoming in Washington is one never knows….)

Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam will appear before the Senate Ag Committee on Thursday morning in a hearing to review the Digital Commodities Consumer Protection Act, a bill introduced last month that could give the CFTC increased regulatory authority over cryptocurrencies.

CFTC Commissioner Summer Mersinger will give a briefing at the Futures Industry Association on Tuesday afternoon. CFTC Commissioner Kristin Johnson will deliver keynote remarks at the American Bar Association Private Equity & Venture Capital Committee's annual meeting on Thursday afternoon.

Other Ag Committee hearings:

Wednesday, Sept. 14: House Ag Committee hearing on ”Soil Health Practices and Programs that Support Regenerative Agriculture”, featuring Dr. Rebecca Larson, Ph.D., Vice President and Chief Scientist at Western Sugar Cooperative.
Thursday, Sept. 15: House Ag Committee hearing entitled “A 2022 Review of the Farm Bill: Broadband.”
Thursday, Sept. 15: Joint hearing of House Agriculture and House Transportation and Infrastructure subcommittees on “Rail Service Challenges and the Impact on Agriculture.”

A special committee advising the Biden administration on antibiotic resistance is holding a public meeting Monday and Tuesday that will include agriculture’s role in the problem. The committee was tasked by Health and Human Services Secretary Xavier Becerra with addressing how “existing pandemic preparedness policies may be augmented” to address drug-resistant bacteria and other new policies that may be needed.

Other hearings of note include:

Wednesday, Sept. 14: House Small Business subcommittee hearing, “Right to Repair and What it Means for Entrepreneurs.”
Wednesday, Sept. 14: House Ways and Means Committee hearing on U.S./Taiwan trade.

Regarding nominations, the Senate Health, Education, Labor and Pensions Committee holds a hearing Tuesday on the nomination of Jessica Looman to be administrator of the Labor Department’s Wage and Hour Division.

Securities and Exchange Commission Chair Gary Gensler will testify in a Senate Banking Committee hearing on oversight of the agency Thursday morning. Gensler will also discuss the SEC's policy agenda in keynote remarks at the WCD Global Institute conference on Monday morning. On Thursday, Gensler will discuss regulation at a Harvard Business School conference on "The Role of Business in the Public Square." That afternoon, Gensler gives opening remarks at the Institute for Inclusion in the Legal Profession conference on diversity and inclusion.

Jared Bernstein, a member of the White House Council of Economic Advisers and former chief economist and economic adviser to then-Vice President Joe Biden, will discuss the state of the U.S. economy in a virtual event hosted by the Peterson Institute for International Economics on Wednesday morning.

The Senate Banking Committee has a hearing Tuesday morning on new consumer financial products and the impacts to workers.

The Senate Judiciary Committee is holding a hearing on Tuesday about data security, featuring testimony from Twitter Inc. whistleblower and former security chief Peiter Zatko, who has claimed that he tried to warn coworkers about Twitter's outdated servers and vulnerable software, and that the company violated the terms of a settlement with the Federal Trade Commission by providing false information about its security plan.

On the energy front, Resources for the Future on Tuesday will host a panel discussion on a new report exploring different pathways to decarbonize the power grid.

Regarding climate change, the House Natural Resources Committee's Oversight and Investigations Subcommittee will hold a hearing on Wednesday about the role that public relations firms play in preventing action on climate change. The hearing comes after a report published in the Environmental Research Letters journal suggested that electric utility companies in the U.S. promoted messaging that was designed to avoid taking action to cut pollution over several decades.

On the Russia/Ukraine war, Ukraine dealt a big blow to Russia’s grip on parts of the east with a fast-moving offensive that saw Ukrainian troops enter the strategic city of Izium after five months of occupation.

Primary season wraps up Tuesday with voters heading to the polls in Delaware, New Hampshire and Rhode Island.

The Justice Department and former President Donald Trump’s lawyers proposed two selections each to a federal judge for who should serve as “special master” in the Mar-a-Lago investigation.

Tuesday is the day that Twitter's shareholders are set to vote on whether to approve Elon Musk’s $44 billion takeover deal -- which Musk wants to terminate.

The 77th session of the U.N. General Assembly kicks off in New York City Tuesday with representatives from the 193 member states gathering in person after a two-year disruption due to Covid-19.

On Thursday, Chinese leader Xi Jinping and Russian President Vladimir Putin are expected to meet on the sidelines of a summit in Uzbekistan. It will be the first face-to-face meeting between the two leaders — who have established a close relationship —since Russia began its invasion of Ukraine earlier this year.

Economic Reports for the Week

The main event this week will be the latest CPI inflation data on Tuesday, with significant implications for Federal Reserve policy and the economy. The average economist estimate is for the index to be up 8.1% from a year earlier, slower than July's 8.5% annual rate of increase. The core CPI is expected to accelerate to 6.1% year over year, however, from 5.9% in July. Wednesday will bring the August Producer Price Index, which is forecast to have risen 8.9% from a year earlier.

Tuesday, Sept. 13

Bureau of Labor Statistics (BLS) releases the consumer price index for August. Economists forecast that the CPI will increase 8.1% year over year, after a 8.5% jump in July. The core CPI is seen gaining 6.1%, compared with 5.9% previously.
National Federation of Independent Business releases its Small Business Optimism Index for August. Consensus estimate is for a 90 reading, roughly even with the July data. The index remains mired near a decade low as small-business owners try to navigate historic inflation, labor shortages, and supply-chain disruptions.
Treasury Budget

Wednesday, Sept. 14

MBA Mortgage Applications
Xx Bureau of Labor Statistics releases the producer price index for August. Economists forecast that the PPI will increase 8.9% year over year, while the core PPI is expected to rise 7.0%. This compares with gains of 9.8% and 7.6%, respectively, in July.

Thursday, Sept. 15

Jobless Claims
Federal Reserve Bank of New York releases its Empire State Manufacturing Survey for September. Expectations are for a 2.1 reading, roughly 33 points better than August’s negative 31.3. The index plummeted 42 points from July to August, the second-largest monthly decline on record, after the pandemic-induced drop in April of 2020.
Census Bureau reports retail sales data for August. The consensus call is for consumer spending to rise 0.2% month over month, while sales excluding autos are seen gaining 0.6%. Both figures would be 0.2 percentage points more than the July increases.
Philadelphia Fed Index
Import and Export Prices
Industrial Production and Capacity Utilization
Business Inventories
Fed Balance Sheet
Money Supply

Friday, Sept. 16

University of Michigan releases its Consumer Sentiment Index for September. Consensus estimate is for a 59.3 reading, about one point more than August’s 58.2. The Federal Reserve will be keenly watching consumer expectations of inflation from the survey.

Key USDA & international Ag & Energy Reports and Events

Monday is the key monthly USDA report data, including Crop Production and the WASDE reports.

Here’s how Pro Farmer newsletter sums up the coming info:

“Analysts fully expect USDA to cut its corn crop estimate in the Sept. 12 Crop Production Report, with the average forecasts in a Reuters survey down 271 million bu. for production from last month and 2.9 bu. per acre for yield. Analysts are split on soybeans, though the average estimate is down 35 million bu. on crop size and 0.4 bu. per acre for yield.

“Perspective: The September estimates will include USDA’s first objective yield (field) samples for corn and soybeans. NASS also announced it has sufficient data to adjust corn and soybean acreage — if warranted. We don’t expect any major changes on corn acreage, though we expect a 500,000-acre increase for soybeans. If USDA uses historical corn ear weights, the estimate isn’t likely to fall as much from last month as some anticipate.

“Cotton acreage will rise, crop likely bigger. FSA certified acreage data suggests USDA would increase cotton acreage by 1.3 million acres. Key will be how much of that is expected to be harvested. Analysts on average expect USDA to raise its cotton crop estimate by 200,000 bales.”

Monday, Sept. 12

Ag reports and events:

Export Inspections
Crop Progress
WASDE
Cotton Ginnings
Crop Production
Cotton: World Markets and Trade
Grain: World Markets and Trade
Oilseeds: World Markets and Trade
World Agricultural Production
Malaysian Palm Oil Board’s data on stockpiles, production and exports
International Dairy Federation hosts World Dairy Summit, Sept. 12-15, New Delhi
Holiday: China, Hong Kong, Korea