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Congress calls out domestic biofuels production policy… A bipartisan group of 47 legislators from both Chambers of Congress petitioned the EPA to finalize its proposal for the Renewable Fuel Standard Program, which includes measures to discourage the use of imports into the U.S. biofuels market. The group sent a letter to EPA Administrator Lee Zeldin, asking him to advocate for the proposal. The legislators say it represents a common-sense approach that puts America’s farmers first in line, strengthens U.S. domestic biofuel markets, and delivers tangible economic benefits to rural communities.
Shutdown to fuel volatility, quells Fed moves… While there are presently no indications the U.S. government shutdown is close to ending, U.S. Treasury traders believewhen it does the marketplace will see increased volatility as a back log of U.S. economic data becomes available. The pent-up U.S. data includes reports on employment and inflation which may also hamper decisions making for the Federal Reserve.
Most FOMC members reportedly believe it would be appropriate to ease monetary policy further over the remainder of this year, with new projections showing officials expect two additional quarter-point cuts by year’s end. The Wednesday afternoon release of the minutes of the last Federal Reserve Open Market Committee meeting in September showed FOMC members had a willingness to lower interest rates further this year, but many expressed caution due to concerns over inflation.
Grassley comments on stalled farmer aid package… The White House was putting together the farm aid package that President Trump said Monday he’d talk about this week. Then the shutdown and furlough of USDA political appointees took the sails out of a Tuesday announcement, leaving the timing uncertain. Iowa Senator Chuck Grassley noted, “All we hear from the administration is on 10 to 14 billion dollars, so the final figure hasn’t even been agreed upon. And then, there’s only four billion dollars in the CCC.”
The same fund that USDA used during President Trump’s first-term trade war with China. Grassley says he spoke with cabinet officials on how to make up the difference, “And they said there would have to be two tranches of it. Some of it is coming from money available right now, and then the fund would have to be supplemented by the Congress of the United States.”
Grassley believes the necessary funding text would give lawmakers a chance to boost farm income with nationwide year-round E15 legislation. “This would generate 25 billion dollars in new economic activity, and roughly $10 billion of that is directly from increased corn demand. Another thing Congress can do is increase transparency in input markets, and my Fertilizer Research Act would help do that.” But Grassley lamented the White House should move faster to stem another farm crisis.
Pork pressure softens lean hog futures… Weekly pork slaughter was estimated to be higher than 2.6 million head, although we won’t know the actual figures as the USDA has furloughed many of its staff due to a funding lapse. Seasonally, pork supply trends higher in the fall, and this year is no different. Slaughter is up 11 percent compared to where it was in mid-August, while weights are up three percent. With nearly 15 percent more pork coming to market, prices have started to trend lower and could see more downside this quarter.
Notable closes…
The aggressive buying is happening in feeder cattle – tight supplies are fundamental support and chart-watchers are accelerating the rally.
- December live cattle were $1.02 ½ higher at $239.90
- February live cattle up $1.17 ½ to $243.40
- November feeders were $5.22 ½ higher at $374.05
December soybean oil futures posted a downside reversal and closed back under support at 51 cents.
- November beans were 7 1/4 cents lower at $10.22 1/4
- January beans down 5 3/4 to $10.38 1/2
- March beans closed at $10.52 1/4, down a nickel on the day