Crude Oil Close to $100-a-Barrel Milestone as Stockpiles in Okla. Plunge to Critical Levels

China makes continues purchases of soybeans, makes initial 2024-crop sorghum buy

Today’s Digital Newspaper

MARKET FOCUS

Oil rose to a one-year high on Wednesday as price nears $100 a barrel
Oil is not just for transportation
U.S. GDP growth for second quarter confirmed at 2.1%
Eurozone economic sentiment dips amid inflationary pressures
The one factor that could make or break the farm economy over the next 12 months
Corteva accuses Inari of illicitly modifying and patenting its technology
USDA’s NASS will host biannual Data Users' Meeting virtually via Zoom on Oct. 17-18
U.S. 10-Year Treasury yield hits 4.65%
Gold facing critical test as it nears vulnerable price levels
H&P Report out this afternoon
Ag markets today
Ag trade update
China makes continues purchases of soybeans, makes initial 2024-crop sorghum buy
El Niño to reduce Indonesian production, increase palm oil prices
NWS weather outlook
Pro Farmer First Thing Today items

CONTINUING RESOLUTION (CR) and POSSIBLE GOV’T SHUTDOWN

Government shutdown looms as House Republicans reject Senate funding plan

RUSSIA & UKRAINE

Stalemate persists in Ukraine conflict: No clear gains for either side
U.N. official emphasizes need for agreement in Ukraine's grain exports

POLICY

Senate Ag Committee explores tighter oversight of foreign farmland investment
Stabenow highlights roadblocks to farm bill amid gov’t shutdown concerns

CHINA

China's ban on Japanese seafood: August shipments plummet by 76%
China’s sow herd declines .
Lan Foan appointed China's finance ministry party chief amid economic challenges

ENERGY & CLIMATE CHANGE

Biden administration to announce $500 million in climate resilience funding

POLITICS & ELECTIONS

Republican presidential debate fails to shift Trump's dominance
Former President Donald Trump on last night’s GOP debate

CONGRESS

Senate unanimously approves dress code enforcement
House easily defeats anti-checkoff amendment
Lucas returns to House.

OTHER ITEMS OF NOTE

U.S./EU summit on Oct. 20 to address Ukraine, clean energy, emerging technologies
Today’s calendar of events

MARKET FOCUS

— Equities today: Asian and European stocks were mixed overnight. U.S. Dow opened around 20 points lower but then turned higher. In Asia, Japan -1.5%. Hong Kong -1.4%. China +0.1%. India -0.9%. In Europe, at midday, London -0.4%. Paris +0.2%. Frankfurt flat.

U.S. equities yesterday: U.S. equities finished mixed, with the Dow weaker and modest gains for the Nasdaq and the S&P 500 was nearly unchanged. The Dow fell 68.61 points, 0.20%, at 33,550.27. The Nasdaq was up 29.24 points, 0.22%, at 13,092.85. The S&P 500 edged up 0.98 point, 0.02%, at 4,274.51.

— Oil rose to a one-year high on Wednesday. WTI crude futures climbed $3.29, or 3.6%, to settle at $93.68/bbl. The session high was over $94. Brent crude futures closed up $2.59, 2.8%, to close at $96.55/bbl. Brent traded above $97/bbl during the trading session to the highest settlement in 2023, after a steep drop in U.S. crude stocks compounded worries of tight global supplies — stockpiles tumbled below 22 million barrels last week to the lowest since July 2022, according to government data on Wednesday. Inventory levels in Cushing have been cut in half since June, and are at a level that's close to the operational minimum. If tank storage falls below 20 million barrels, the oil can become sludgy and difficult to remove, potentially adding to upward pressure on prices and renewing fears of inflation. Meanwhile, the premium for near-term barrels of WTI traded at about $2, the highest level since July 2022, a sign that the futures market is reflecting physical tightness.

Meanwhile, Russian oil is trading closer to $100 a barrel than the Group-of-Seven price cap of $60. Crude from the country’s western ports has rallied along with headline futures in recent days, Argus Media Ltd. data show. Price increases are more than making up for the reduction in sales volume for Russia and Saudi Arabia, according to calculations by consulting firm Energy Aspects.

Of note: Saudi Aramco agreed to buy a stake in MidOcean Energy for $500 million, its first investment in liquefied natural gas as the company seeks to diversify beyond its core oil business. It said separately on Wednesday that it will start talks to take a 10% stake in China’s Shenghong Petrochemical.

The U.S.' national Strategic Petroleum Reserve has reached its lowest levels in decades, even as tensions escalate with China. The Biden administration has significantly reduced oil stocks in the reserve, cutting them by nearly half as part of an effort to curb soaring domestic gasoline prices. Officials from the U.S. gov’t have clarified that last year's high fuel prices were primarily due to supply shocks caused by Russia's invasion of Ukraine, rather than President Biden's push for clean energy and reduced reliance on fossil fuels. In contrast, China has been aggressively expanding its oil reserves, stockpiling substantial quantities of low-cost crude oil from Russia.

— Agriculture markets yesterday:

Corn: December corn rose 3 1/2 cents to $4.83 1/4, the highest close since Sept. 11.
Soy complex: November soybeans rose 1/2 cent to $13.03 1/4 and nearer the session low. December soybean meal fell $3.60 to $389.10 and nearer the session low. December bean oil closed up 53 points at 58.24 cents and nearer the session high.
Wheat: December SRW futures fell 9 1/2 cents before closing at $5.79 1/2, on session lows. December HRW futures made a two-year low, falling 16 cents to $6.94 1/2. December spring wheat futures fell 15 3/4 cents to $7.50 3/4.
Cotton: December cotton rose 12 points to 88.30 cents, ending nearer the session low. Prices hit a three-week high early on.
Cattle: October live cattle futures ended Wednesday having inched up 10 cents to $184.90, while the Deferred contracts declined. October feeder futures tumbled $1.625 to $252.25, with deferred futures posting larger losses.
Hogs: October lean hog futures rallied 50 cents before ending the day at $82.125, nearer the intraday low.

— Ag markets today: Corn and soybean futures pulled back from recent corrective gains, while wheat extended its price slide during overnight trade. As of 7:30 a.m. ET, corn futures were trading a penny lower, soybeans were 6 to 8 cents lower, SRW wheat futures were fractionally lower, HRW wheat was 2 to 3 cents lower and HRS wheat was 1 to 2 cents lower. Front-month crude oil futures were modestly weaker, while the U.S. dollar index was more than 300 points lower.

Choice beef finds buyers under $300. Choice boxed beef prices didn’t spend much time below $300.00, rallying $1.41 on Wednesday to $300.95. Just as importantly, movement totaled 149 loads, marking the second straight day of strong retailer buying. While the market appears to have found an inflection point, key now will be whether retailer demand remains strong if packers try to push Choice prices much above $300.00.

Cash hog index continues to slip. The CME lean hog index is down 17 cents to $86.14 (as of Sept. 26), marking the fourth straight daily decline, though that’s still above the Sept. 5 low of $86.01. Traders wonder if the cash market has started what’s likely to be an extended decline into winter as slaughter supplies build seasonally.

— Quotes of note:

Crude oil nears $100 a barrel. “It really all boils down to concerns over supply tightness continuing and even exacerbating going into the northern hemisphere winter months,” said Vandana Hari, founder of consultancy Vanda Insights.
Oil is not just for transportation. Global oil demand growth may start to slow down in the future, but consumption rates will still stay strong, says UBS in a research note. "Most of us associate oil with transportation. But oil is more than that. Many everyday products are derived from crude oil, and we remain highly dependent on it, covering nearly one-third of our energy thirst," UBS says. "OECD countries and the Middle East have the highest daily consumption of oil per person. We expect oil demand to continue increasing over the coming years, but at a slower pace than before. Emerging Asia and the petrochemical sector should remain the demand drivers, in our view."
Soft landing. Bank of America CEO Brian Moynihan said the bank's strategists still expect the U.S. economy to achieve a soft landing instead of a recession, on account of continued strength in consumer spending. He noted that the Federal Reserve is winning the battle against inflation, but flagged the risk of going too far in policy tightening. As for the 'Basel III endgame' proposal, Moynihan joined his counterparts in saying they would make U.S. banks less competitive.
Former President Donald Trump on last night’s GOP debate: “They all want to be something: secretary of something, even VP,” Trump said from the sidelines last night, during a competing event in Michigan. “Anybody see a VP? Nah.”

— U.S. GDP growth for second quarter confirmed at 2.1%. This figure remains unchanged from the previous estimate, while the first quarter recorded an upwardly revised growth rate of 2.2%. Key findings from the report include:

Consumer spending rose less than initially expected, increasing by 0.8% compared to the 1.7% growth in the second estimate.
Upward revisions were observed in nonresidential fixed investment (7.4% vs 6.1%), exports (-9.3% vs -10.6%), and residential investment (-2.2% vs -3.6%).
Government spending increased by 3.3%, aligning with the previous estimate.

Additionally, the Bureau of Economic Analysis implemented annual revisions aimed at removing fluctuations attributed to factors such as seasonal weather patterns and holidays. As a result, the economic growth rate for the entire year of 2022 was adjusted downward by 0.2 percentage points to 1.9%. This adjustment was driven by downward revisions in consumer spending, inventory investment, state and local government spending, exports, as well as an upgrade to imports.

Looking ahead to 2023, the Federal Reserve anticipates the US economy to grow at a rate of 2.1%.

— Eurozone economic sentiment dips amid inflationary pressures. In September 2023, the economic sentiment indicator for the Eurozone experienced a slight decline, falling to 93.3 from a revised 93.6 in the previous month. This reading, while surpassing market expectations of 92.5, marked the lowest level since November 2020. The dip in economic sentiment reflects the ongoing impact of inflationary pressures within the Eurozone and the European Central Bank's aggressive policy tightening, which has continued to affect overall morale. These indicators highlight the persistent concerns over rising prices and their impact on economic sentiment in the Eurozone.

— The one factor that could make or break the farm economy over the next 12 months. Ag economists’ view on the ag economy is starting to erode. The September Ag Economists’ Monthly Monitor from the University of Missouri and Farm Journal shows lower commodity prices, concerns about demand and a negative outlook for China’s economy are all contributing to the changing views, even as the cattle herd and U.S. corn and soybean crops continue to shrink. But the most influential piece of the farm economy might be the price of corn. The biggest story revealed is that all three categories are lower than any of the previous three surveys.

Economists say there are several factors driving agriculture’s economic health today, and will continue to do so over the next 12 months, including (Link for full report):

U.S. and global weather creating production challenges
Decline in many commodity prices
Below-trend yields for major crops in 2023
Strong cattle prices offset by lower prices of other livestock commodities
Generally high interest rates and input costs, despite some lower prices for fertilizer, etc., providing relief
Variable profitability across farm operations based on production challenges
Tight farm margins in some instances
Declining export demand
Uncertain international grain market factors
Increased production competition from South America

Corteva accuses Inari of illicitly modifying and patenting its technology. Corteva, Inc. has taken legal action by filing a lawsuit in a U.S. federal court against Inari Agriculture. The lawsuit accuses Inari of obtaining Corteva's protected seeds from a U.S. depository and unlawfully shipping them to Europe. Corteva alleges that Inari went further by making slight genetic modifications to the biotech traits of the seeds and is now seeking U.S. patents for these modified traits. While Inari typically partners with seed manufacturers to utilize its gene editing technology for enhancing products, Corteva stated in its lawsuit that it has never engaged in any partnership with Inari nor granted the company permission to modify any of its seeds. The lawsuit clarifies that Inari has not yet sold any gene-edited products derived from Corteva's seeds. However, Corteva asserts that Inari intends to commercialize these products in the future. As a result, Corteva is pursuing legal action seeking both damages and a permanent injunction against Inari.

— USDA’s National Agricultural Statistics Service (NASS) will host its biannual Data Users' Meeting virtually via Zoom on Oct. 17-18 from noon-3 p.m. EDT. This event provides a platform for sharing recent and upcoming statistical program changes with the public, while also seeking input on these crucial agricultural programs. NASS is collaborating with various agencies, including the World Agricultural Outlook Board, Farm Service Agency, Economic Research Service, Agricultural Marketing Service, Foreign Agricultural Service, and U.S. Census Bureau to organize this meeting, which is free and open to the public.

The agenda for Oct. 17 includes agency updates and breakout sessions, while day two features a question and comment open forum for attendees and additional breakout sessions. Interested participants can find a detailed agenda with breakout session descriptions and registration information on the NASS website. Registration will result in emailed links to access the virtual meeting.

Summaries of previous Data Users' Meetings are available on the NASS meeting webpage. For further inquiries, contact Marisa Reuber at Marisa.Reuber@usda.gov or 202-690-3099.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and British pound both firmer against the greenback. The yield on the 10-year U.S. Treasury note was higher, trading around 4.63%, with a higher tone in global government bond yields. Crude oil futures shifted lower. U.S. crude was around $96.05 per barrel and Brent around $93.95 per barrel. Gold and silver were firmer ahead of U.S. trading, with gold around $1,893 per troy ounce and silver around $22.80 per troy ounce.

— U.S. 10-Year Treasury yield hits 4.65% as concerns rise over prolonged elevated interest rates, reaching levels not seen since July 2007. This increase comes amid growing concerns that interest rates are poised to remain elevated for an extended period. Despite expectations of a sharper increase, initial jobless claims have held steady, staying close to their over-seven-month highs. This trend reinforces recent evidence suggesting that the U.S. labor market remains tight.

— Gold is currently facing a critical test as it nears vulnerable price levels. The precious metal is feeling the pressure from rising inflation-adjusted bond yields, which tend to negatively impact non-interest-bearing assets like gold. Additionally, a strengthening dollar is adding further strain to gold prices, which are denominated in the currency. Gold prices are hovering around the psychologically important $1,900 per ounce mark, and their fate could hinge on the emergence of buyers in the market. Over the past year, central bank purchases, driven by a desire to diversify away from the dollar, have provided some support to the gold market even as investors sold their holdings. Recent data suggests a slowdown in gold consumption, and it's unclear whether this is due to high prices or reduced appetite from central banks. Gold is currently considered overvalued compared to bonds. Chinese consumers may provide some support as Beijing allows more gold imports. Limited supply had pushed local gold prices to a near-record premium compared to international prices earlier in the week.

On Wednesday, gold futures fell 1.39% on the day and the new lows marked the start of a new down trend in the yellow metal. Looking ahead, as long as the dollar is strong and yields are rising, gold will remain under pressure with a technical support band from Q1 between $1,815 and $1,860 in focus as an initial downside target.

— H&P Report out this afternoon. USDA’s Hogs & Pigs Report at 3:00 p.m. ET is expected to show the hog herd down 0.8% from last year as of Sept. 1. Market hogs are expected to decline 0.7%, while the breeding herd is anticipated to be 1.3% smaller. Analysts expect summer farrowings to come in 3.4% smaller than last year, while fall and winter farrowing intentions are anticipated to be down 3.5% and 2.1%, respectively. Also key will be revisions to past data, which are likely after summer slaughter consistently ran above levels implied in the June report.

— China makes continues purchases of soybeans, makes initial 2024-crop sorghum buy. China continued as a buyer of U.S. soybeans in the week ended Sept. 21 and made their first purchases of U.S. sorghum for the 2024-25 marketing year. Activity for 2023-24 included net wheat sales of 69,096 metric tons, net sales of 3,711 metric tons of corn, 581,245 metric tons of soybeans, and 13,141 running bales of upland cotton. USDA also said there were net sales of 180,000 metric tons of sorghum for 2024-25, the first sales to China for delivery in that marketing year. For 2023, there were net sales of 3,181 metric tons of beef and 1,545 metric tons of pork.

— El Niño to reduce Indonesian production, increase palm oil prices. Crude palm oil (CPO) prices in 2024 are likely to average at least 11% more than this year as El Niño weather patterns are expected to reduce output in top producer Indonesia, the Indonesian Palm Oil Association (GAPKI) said. In 2024, average CPO prices, including cost, freight, and insurance (CIF Rotterdam), could rise to $1,000 per metric ton from around $900 in the current year, said Fadhil Hasan, head of foreign affairs division at GAPKI. Meanwhile, Malaysia's palm oil production is likely to rise next year as more plentiful labor and the maturation of plantations for harvesting offset the impact of the El Niño weather pattern, the Malaysian Palm Oil Board said.

— Ag trade update: Algeria purchased 60,000 MT of corn to be sourced from Brazil or Argentina. Iran purchased “several cargoes” of corn (sourced from Brazil, Europe, Russia, Ukraine or elsewhere in the Black Sea region) and 120,000 MT of soymeal (sourced from Brazil, Argentina or India).

— NWS weather outlook: Heavy rain and flash flooding possible across parts of the Northeast on Friday... ...Wet weather pattern continues throughout Florida and the Northwest... ...Well above average temperatures expected across the central Plains and parts of the Midwest.

Items in Pro Farmer's First Thing Today include:

• Grains weaker this morning
• Eurozone economic sentiment deteriorates

CONTINUING RESOLUTION (CR) & POSSIBLE GOV’T SHUTDOWN

— Government shutdown looms as House Republicans reject Senate funding plan. The possibility of a gov’t shutdown over the weekend has increased as House Republicans declined to consider a bipartisan Senate proposal aimed at extending government funding beyond the impending deadline. The White House issued a statement emphasizing House Republicans' responsibility to prevent a government shutdown, highlighting potential economic, community, and national security risks. They underscored the need for prudent planning in case of funding lapses.

White House action. In response to the congressional standoff, the White House Office of Management and Budget directed federal agencies to prepare for the possibility of notifying employees about the status of government funding. Specific details about furloughs and work without compensation remain unclear but are part of standard contingency planning.

Both the Senate and the House are pursuing separate approaches to extend government funding, set to expire at 12:01 a.m. ET on Sunday. The Senate's bill, garnering bipartisan support, proposes extending funding until Nov. 17 and includes aid for Ukraine and domestic disaster relief. However, House Speaker Kevin McCarthy (R-Calif.) rejected this proposal, signaling reluctance to bring it to the House floor in its current form.

There are no ongoing negotiations between the House and Senate for a short-term spending bill agreeable to both chambers. Instead, each chamber plans to advance its legislation and challenge the other to accept or reject it.

McCarthy has floated alternative plans, including modifying the Senate's bill and appending a House-passed border security bill before sending it back to the Senate.

House GOP leaders are considering passing multiple week-long short-term funding measures, each significantly reducing federal spending from current levels, challenging Democrats in the Senate. However, it's uncertain whether the House GOP can muster enough votes to pass any short-term bills, potentially leading to a government shutdown.

The Senate also faces challenges, with some Republicans threatening to delay the funding bill vote due to opposition to increased aid for Ukraine. Senate leaders have been negotiating agreements to permit votes on limited amendments in exchange for a swifter path to passage.

Bottom line: As the weekend deadline approaches, the risk of a government shutdown looms larger, with significant differences between the House and Senate on how to address the issue.

RUSSIA/UKRAINE

— Stalemate persists in Ukraine conflict: No clear gains for either side. At the beginning of the year, both Russia and Ukraine had ambitious military objectives in the ongoing conflict. Russia aimed to capture the eastern Donbas region, while Ukraine sought to divide Russian forces by launching an offensive in the south. However, neither side has achieved its desired goals, resulting in a protracted stalemate. Despite months of intense combat and significant casualties on both sides, the front line in the conflict has seen little significant movement. Ambitious offensives from both Russia and Ukraine have failed to substantially shift the front line. After 18 months of continuous warfare, a breakthrough appears more elusive than ever, with no clear gains for either party in the conflict. Link to more via the New York Times.

— U.N. official emphasizes need for agreement in Ukraine's grain exports. Rebeca Grynspan, the U.N. official overseeing the implementation of the Black Sea Grain Initiative, has expressed positivity about Ukraine's efforts to create a shipping corridor for its grain exports. However, she emphasized that these alternative measures should not replace the need for a comprehensive agreement that includes the support of all parties involved, according to Reuters. While recognizing the importance of finding ways to export grain to global markets, Grynspan highlighted that the goal should be a mutually agreed-upon solution that can mitigate risks and stabilize the situation in the Black Sea region. The Black Sea Grain Initiative aims to facilitate cooperation and agreements among countries in the region to ensure the smooth flow of grain exports.

Upshot: Grynspan's comments underscore the significance of reaching a consensus among all stakeholders to address the challenges and uncertainties related to grain exports in the Black Sea region.

POLICY UPDATE

— Senate Ag Committee explores tighter oversight of foreign farmland investment. The Senate Ag Committee is actively considering increased oversight of foreign investments in U.S. farmland, prompted by growing concerns, particularly regarding China. The current system for tracking and reporting foreign land purchases is deemed outdated and inadequate.

During a hearing Wednesday (Sept. 27), panel members expressed support for enhancing the authority of the Committee on Foreign Investment in the United States (CFIUS) to provide more robust oversight of foreign acquisitions. This proposed move would also involve a more significant role for USDA and the Food and Drug Administration (FDA).

Facts and figures. According to Senate Ag Chair Debbie Stabenow (D-Mich.), foreign investors currently have stakes in nearly 40 million acres of American farmland and forest land, representing over 3% of privately held agricultural land in the U.S. While Chinese ownership accounts for less than 1% of the total, weaknesses in the reporting and tracking system have raised concerns about potential undercounting.

Buying American farmland is not part of China’s current agricultural investment strategy, the panel was told. “We’re seeing investments in farmland in places in sub-Saharan Africa, Southeast Asia, Eastern Europe, as well as Russia. But by and large, China’s foreign investments in farmland have bypassed North America,” said David Ortega, a professor and economist at Michigan State University. There was also “no clear evidence” that foreign land ownership was causing American farmland prices to rise, Ortega said. Nor did such ownership threaten “our ability to produce food,” he added.

The discussion at the hearing also revolved around potential updates to the Agriculture Foreign Investment Disclosure Act of 1978 (AFIDA), which mandates USDA monitoring of foreign ownership of U.S. farmland, and the role of CFIUS, responsible for assessing the national security implications of foreign investment in the U.S. Challenges in transaction reporting, reliance on outdated paper-based systems, and the need for an automated, centralized system were all highlighted during the hearing. Verification of data submitted on foreign purchases also posed challenges due to limited resources.

Legislative actions to enhance transparency and oversight of foreign land ownership and agricultural assets were a focal point, with a particular interest in integrating these actions into the farm bill or appropriations legislation. “The NDAA [National Defense Authorization Act] is the vehicle that is moving and will have an opportunity to get signed into law first,” said Stabenow. The NDAA sets defense policy and funding levels.

One proposal highlighted during the hearing was the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense (FARMLAND) Act, which seeks to enhance reporting and scrutiny of foreign acquisitions of U.S. agricultural land. It also includes provisions for USDA and FDA officials to have permanent seats on CFIUS and extends additional authority to CFIUS for blocking foreign acquisitions.

Sen. John Boozman (R-Ark.) said after the hearing that “where I hear agreement is the CFIUS issue,” meaning suggestions to add USDA to the Treasury-led Committee on Foreign Investment in the United States. The committee reviews the national security implications of major purchases of U.S. assets and has the power to demand changes in the transactions or to deny the sales. On Monday, USDA Secretary Tom Vilsack said that “being part of CFIUS, I think, is part of” improving the U.S. system of appraising purchases.

Bottom line: While there is growing support for tighter control over foreign farmland investment, concerns about potential retaliatory actions from other countries were also raised during the hearing. Ortega testified that China was far outpacing the U.S. and the European Union in funding agricultural research and development, which he considered “one of the biggest threats to our food security.” Yet he cautioned that efforts to tackle foreign agricultural investment should bear in mind that other countries might retaliate, saying “the U.S. is one of the top investors in foreign agricultural land across the world… We export a lot of our grain, our soybeans, our corn to China as well as more consumer-oriented products like beef and pork,” Ortega added. “It would be far easier for China to find new sources of these products than it would be for American farmers to find new export markets.”

— Stabenow highlights roadblocks to farm bill amid gov’t shutdown concerns. Senate Ag Committee Chair Debbie Stabenow (D-Mich.) addressed the challenges facing the new farm bill, emphasizing the numerous obstacles that have emerged, including the looming gov’t shutdown. Stabenow expressed her concerns, stating, "Everything keeps getting in our way," and described the current circumstances as unusual. She noted the 2018 Farm Bill was enacted in December of that year and expressed hope that they could meet a similar timeline this time.

CHINA UPDATE

— China's ban on Japanese seafood: August shipments plummet by 76% compared to the same period the previous year, primarily due to Beijing's import ban on Japanese seafood. This restriction came into effect after Japan commenced the release of treated water from the Fukushima Daiichi nuclear power plant. Data from Japan's Finance Ministry revealed that Japan's seafood exports to China in August 2023 were valued at 2.2 billion yen ($14.7 million), a sharp drop from 9 billion yen recorded in August 2022.

Background. China's decision to halt seafood imports from Japan was made public in late August, citing concerns about the water's safety. Beijing urged Tokyo to reconsider its stance. Japan has maintained that the discharged water is safe, referencing a report by the International Atomic Energy Agency that affirmed the release's minimal radiation impact on both humans and the environment.

Following China's lead, the Hong Kong government also implemented a ban on seafood imports from ten regions in Japan, including Fukushima. According to the Finance Ministry's data, seafood exports to Hong Kong in August totaled 1.4 billion yen, marking a 26% year-on-year decrease.

— China’s sow herd declines. China’s sow herd totaled 42.41 million head at the end of August, according to the country’s ag ministry, down 0.7% from July and 1.9% smaller than last year. Hog slaughter surged 22.1% from year-ago in August.

— Lan Foan appointed China's finance ministry party chief amid economic challenges. The move comes as China faces challenges related to local government debt and aims to boost fiscal revenue to ensure sustainable economic growth. Lan Foan, 61, succeeds Liu Kun and is also set to take over Liu's role as finance minister. Liu had held both positions since 2018 but will soon reach the age of 67, beyond the normal retirement age for civil servants of ministerial rank. Lan Foan previously served as the party chief of Shanxi province and has experience in various financial departments at local and central levels. His appointment comes at a crucial time for China's economy, which has shown signs of recovery but is dealing with a property crisis that has led to concerns about local government debt.

Some observers signal this move suggest a potential shift toward more expansionary fiscal policy, although it may take some time to materialize. The central government has relied on local governments to stimulate the economy, but many local governments are financially stretched, and Beijing has been hesitant to push for more local government-led fiscal stimulus. Additionally, there are concerns about default risks associated with local government financing vehicles (LGFVs), which have contributed to rising local government debt. LGFVs are hybrid entities used to bypass borrowing restrictions, and their debt has grown significantly in recent years. Efforts to address these challenges and stabilize fiscal revenue are underway as China grapples with its economic situation.

ENERGY & CLIMATE CHANGE

— Biden administration to announce $500 million in climate resilience funding. The Biden administration is set to unveil a new funding initiative aimed at climate resilience efforts, allocating $500 million across various agencies. This announcement is part of a series of twelve actions by the White House, emphasizing the strengthening of climate resilience in buildings, fostering local engagement and partnerships, workforce and community benefits, and enhancing resilience in lands and waters.

Key allocations include $167.7 million for modernizing the electric grid through the Department of Energy (DOE), $12.7 million for the National Oceanic and Atmospheric Administration to address climate-related hazards in communities, and $16 million from the Department of Labor to create climate resilience job opportunities in underserved areas.

POLITICS & ELECTIONS

— Republican presidential debate fails to shift Trump's dominance. In a two-hour Republican presidential debate, seven contenders sparred with each other and criticized President Joe Biden. However, none of them managed to deliver a defining moment that could significantly alter the race, leaving Donald Trump in a dominant position.

The absence of Donald Trump from the debate led some to conclude that he emerged as the winner by not participating.

While the debate touched on issues such as inflation, immigration, China, and illicit drugs, it failed to illuminate differences among the candidates.

Bottom line: The debate was a dud and did little to change the perception that Trump is the frontrunner in the Republican race.

CONGRESS

— Senate unanimously approves dress code enforcement. The Senate unanimously passed a resolution (SRes. 376) granting the Sergeant at Arms the authority to enforce a dress code on the Senate floor. This resolution codifies a long-standing practice of requiring business attire for senators during sessions. Men are mandated to wear "a coat, tie, and slacks or other long pants," while standards for women's attire were not specified in the resolution. The move comes in response to reports that Senate Majority Leader Chuck Schumer (D-N.Y.) sought to ease the enforcement of the chamber's dress code. Senators who prefer more casual attire during votes typically do so from hallways or the cloakroom just off the Senate floor. Sen. John Fetterman (D-Pa.) often wears hoodies and gym shorts around the Capitol.

— House easily defeats anti-checkoff amendment. The House overwhelmingly defeated an amendment to the fiscal year 2024 Agriculture Appropriations Act that would have curbed research and promotion checkoff programs that are managed by USDA. Noting that the vote on the amendment sponsored by Rep. Victoria Spartz ( R-Ind.), was 49 to 377, American Soybean Association President Daryl Cates, said, “Congresswoman Spartz took aim at the entire checkoff system with no regard to the votes of those of us farmers who, time and again, have voted to preserve these programs that allow us to collectively promote our crops, conduct research, develop and protect markets, and assure domestic and global access. I speak for the soy industry today when I say, we are exceptionally pleased this strange amendment was snuffed on the House floor.”

— Lucas returns to House. Rep. Frank Lucas (R-Okla.), the second-ranking Republican on the House Ag Committee, resumed work in Washington after recovering from an attack by a bull on his ranch. Lucas broke a hip and fractured his pelvis in several places Aug. 4 during an encounter with an ill-tempered bull on his Roger Mills County farm. He was off his feet for six weeks, Lucas said, and can move now only with a walker or wheelchair, although a full eventual recovery is expected. Link to details via the Tulsa World.

OTHER ITEMS OF NOTE

— U.S./EU summit on Oct. 20 to address Ukraine, clean energy, and emerging technologies. President Joe Biden is scheduled to host the European Council President Charles Michel and European Commission President Ursula von der Leyen at the White House on Oct. 20 for the upcoming U.S./EU summit. The summit will primarily revolve around their joint commitment to supporting Ukraine in its efforts to defend its sovereignty and imposing consequences on Russia for its aggressive actions, as stated in a White House announcement. Additionally, the leaders will focus on advancing the clean energy economy through secure and resilient supply chains, along with ongoing collaboration in critical and emerging technologies, encompassing digital infrastructure and artificial intelligence. This gathering will be the second such summit since President Biden assumed office.

— Calendar of events today include:

Thursday, Sept. 28

• Federal Reserve. Fed Governor Lisa Cook delivers closing remarks via video at the Minorities in Banking Forum, Federal Reserve Bank of Dallas; Chicago Fed President Austen Goolsbee and Richmond Fed President Thomas Barkin scheduled to speak.

• EPA Farm and Ranch Advisory panel. Environmental Protection Agency virtual meeting of the Farm, Ranch, and Rural Communities Advisory Committee to discuss environmental issues and policies that are of importance to agriculture and rural communities.

• Biden impeachment. House Oversight and Accountability Committee hearing on “The Basis for an Impeachment Inquiry of President Joseph R. Biden, Jr.”

• Digital asset regs. Federalist Society for Law and Public Policy Studies virtual discussion “Will Congress Create a Statutory Framework for Digital Asset Regulation?”

• Fires in Hawaii. House Energy and Commerce Oversight and Investigations Subcommittee hearing on the recent fires in Maui, Hawaii.

• Offshore oil production regs. House Small Business Rural Development, Energy, and Supply Chains Subcommittee hearing on “Energy Independence: How Burdensome Regulations are Crushing Small Offshore Energy Producers.”

• Building transformation conference. Informa Connect 2023 Greenbuild International Conference and Expo., on “Building Transformation,” with remarks from White House National Climate Adviser Ali Zaidi.

• China political warfare. Center for Strategic and International Studies virtual discussion on “China's Strategy of Political Warfare: Views from Congress.”

• Electric vehicles. American Security Project discussion on “Clean Cars and National Security: The Importance of Increased Electrification and Strong Standards.”

• Atlantic Festival. The Atlantic 2023 Atlantic Festival with remarks from several current and former Democratic lawmakers and Biden administration officials. Runs through Friday.

• AI and the Chinese economy. Asia Society Policy Institute virtual discussion on “Artificial Intelligence's (AI) Impact on the Chinese Economy.”

• Solar energy. Resources for the Future conference on “Solar Geoengineering Futures: Interdisciplinary Research to Inform Decisionmaking.” Runs through Friday.

• Grid reliability. House Energy and Commerce Energy, Climate, and Grid Security Subcommittee hearing on “Powering America's Economy, Security, and our Way of Life: Examining the State of Grid Reliability.”

• Supreme Court preview. American Enterprise Institute for Public Policy Research discussion on “Cases and Controversies: A Preview of the Supreme Court's 2023-2024 Term.”

• Economic activity confab. Brookings Institution 2023 Brookings Papers on Economic Activity Conference focusing on “the most urgent economic challenges of the day,” including a session on supply chain resilience. Runs through Friday.

• Low-carbon hydrogen. American Council on Renewable Energy virtual discussion on “Unlocking the Opportunity of Low-Carbon Hydrogen: Investment, Incentives, and Collaboration.”

• IRA clean energy incentives. Environmental and Energy Study Institute briefing on “The Latest on the Clean Energy Tax Incentives in the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) Progress Report.”

• Government telework policies. House Oversight and Accountability Government Operations and the Federal Workforce Subcommittee hearing on “Oversight of Federal Agencies' Post-Pandemic Telework Policies: Part II.”

• Immigration. American Enterprise Institute for Public Policy Research holds a discussion on “Streamlining the Immigration Bureaucracy.”

• Economic reports. Jobless Claims | GDP | Pending Home Sales Index | KC Fed Manufacturing

• Energy reports. IEA critical minerals and clean energy summit, Paris | North Sea loading programs (November) | Singapore onshore oil product stockpile weekly data | EIA Natural Gas Report | Holiday: South Korea, Malaysia, Indonesia, India, Egypt, Iraq, Kuwait, Libya.

• USDA reports. FAS: Export Sales ERS: Fruit and Tree Nuts Outlook NASS: Egg Products | Hogs and Pigs

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Crude Oil Close to $100-a-Barrel Milestone as Stockpiles in Okla. Plunge to Critical Levels

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