FOMC | China buys U.S. soybeans, cotton | John Deere layoffs | GAO on Vilsack & CCC
Today’s Digital Newspaper |
MARKET FOCUS
- China continues buys of U.S. soybeans, cotton
- USDA daily export sale: 137,160 MT corn to Mexico (details below)
- Ag markets today
- VIX volatility gauge closed above 15 for the first time this month
- Two-year Treasury yields topped 5.2% on Thursday for the first time since 2006
- FedEx posted higher profit despite a drop in revenue
- Goldman Sachs expects Fed easing to start as late as fourth quarter next year
- FOMC: ‘Hawkish pause’ in its tightening campaign in ‘higher for longer’ message
- Bank of England keeps interest rate at 5.25%, first halt in almost two years
- Stellantis and GM furlough workers amid strikes
- Hollywood strike nears conclusion
- Palm oil prices reach lowest point in nearly three months
- Migrant surge disrupts U.S./Mexico border supply chain operations
- Ag trade update
- NWS weather outlook
- Pro Farmer First Thing Today items
CONTINUING RESOLUTION (CR) and POSSIBLE GOV’T SHUTDOWN
- House Republicans make progress on stopgap bill, but face Senate divide
RUSSIA & UKRAINE
- Russia plans new tax on exporters to soak up excess revenue companies reap
- Ukraine wheat shipment reaches Turkey
- U.S. urged JPMorgan to ‘be patient’ before halt to processing Russia grain payments
- Ukraine agrees on grain trade deals with Slovakia, Poland
- Zelenskyy to meet with President Biden and visit the U.S. Capitol today
POLICY
- ERP Phase 2 payments increase to $10.99 million
- Update on ERP Phase 2 payments for 2020-21 losses
- GAO finds USDA properly used CCC authority for climate-smart commodities effort
- Coalition calls for wealthiest farmers to bear more crop insurance costs in farm bill
PERSONNEL
- Senate confirms Gen. Charles Q. Brown Jr. as Joint Chiefs Chairman
CHINA
- Bashar al-Assad, Syria’s president, arrives in China
TRADE POLICY
- WSJ: Iran’s oil exports surge amid quiet diplomacy with U.S.
ENERGY & CLIMATE CHANGE
- Groups urge Biden administration to use GREET model for SAF tax credit eligibility
- Biden launches American Climate Corps to tackle environmental challenges
- DOE allocates $47.7 million for 16 clean hydrogen projects
- EPA seeks bids for grants to reduce GHG emissions
LIVESTOCK & FOOD INDUSTRY
- Uber Eats to accept SNAP benefits for grocery orders in 2024
HEALTH UPDATE
- Biden administration resuming program to deliver free Covid-19 tests via mail
- Bryan Johnson, a former tech executive, is spending millions trying to reverse aging
POLITICS & ELECTIONS
- CNN poll: Trump tops rivals in New Hampshire, DeSantis falls to fifth place
OTHER ITEMS OF NOTE
- India suspends visa issuance to Canadians amid diplomatic rift over Sikh killing
- Glyphosate nears EU renewal
- Today’s calendar of events
MARKET FOCUS |
Equities today: Asian and European stocks were mostly lower overnight. U.S. Dow opened around 120 points lower. In Asia, Japan -1.4%. Hong Kong -1.3%. China -0.8%. India -0.9%. In Europe, at midday, London -0.6%. Paris -1.5%. Frankfurt -1.1%.
U.S. equities yesterday: All three major indices finished with losses the wake of the Fed meeting conclusion, with the Nasdaq operating in the red much of the session. The Dow lost 76.85 points, 0.22%, at 34,440.88. The Nasdaq dropped 209.06 points, 1.53%, at 13,469.13. The S&P 500 declined 41.75 points, 0.94%, at 4,402.20. All three major indexes closed at session lows.
The VIX volatility gauge closed above 15 for the first time this month and climbed further pre-market on Thursday.
Two-year Treasury yields topped 5.2% on Thursday for the first time since 2006 — up 32bp this month alone. Ten-year Treasury yields hit 4.5% for the first time in almost 16 years.
U.S. crude oil futures dropped back below $90 per barrel for the first time in more than a week — down almost 6% from Tuesday’s highs. but in current trading resumed to the $90-plus level.
FedEx posted higher profit despite a drop in revenue, as the shipping giant continues its extensive cost-cutting efforts amid slumping demand.
Agriculture markets yesterday:
- Corn: December corn rose 6 cents to $4.82 1/4, marking a close above the 10-day moving average and the largest daily price gain since Aug. 23.
- Soy complex: November soybeans closed up 4 1/2 cents at $13.20 and near the session high. December soybean meal rose $5.90 at $395.10 and near the session high. December bean oil fell 100 points at 59.29 cents, nearer the session low and closed at a two-month-low close.
- Wheat: December SRW futures rose 4 3/4 cents before settling at $5.88 3/4 after trading on both sides of unchanged throughout the session. December HRW futures fell 2 cents before closing at $7.29. December spring wheat rose 3 3/4 cents to $7.83 1/2.
- Cotton: December cotton closed down 66 points at 86.86 cents today and near the session low.
- Cattle: O Cattle futures rebounded from early losses Wednesday, with nearby October live cattle closing $1.10 higher at $186.775 and October feeders surging $1.225 to $260.575.
- Hogs: October lean hog futures rose 92.5 cents to $85.775, marking the highest close since July 31.
Ag markets today: Corn, soybeans and wheat pulled back from corrective gains earlier this week during the overnight session. As of 7:30 a.m. ET, corn futures were trading mostly 2 cents lower, soybeans were 13 to 14 cents lower and wheat futures were mostly 3 to 4 cents lower. Front-month crude oil futures were around 60 cents lower, and the U.S. dollar index was more than 450 points higher.
Cash cattle trade uncertainty. Initial light cash cattle trade in Iowa pointed to higher prices, though some cash sources have backed down from earlier predictions given falling wholesale beef prices. Boxed beef prices fell 86 cents to $301.26 for Choice and dropped $3.10 to $278.68 for Select on Wednesday. But wholesale prices may be getting “cheap enough,” as movement surged to 196 loads on the day.
Pork cutout back below $100. The pork cutout value dropped $1.91 on Wednesday, falling to $99.22. Once again, packers proved unable to hold the cutout above $100.00 for long, signaling that’s an area where retailers are resistant buyer. But prices haven’t needed to drop much below that level in the past to attract fresh retailer buying. Movement picked up to 328.2 loads on yesterday’s price drop.
Quotes of note:
- Goldman Sachs said it now expects Fed easing to start as late as the fourth quarter of next year, six months later than an earlier forecast for a first cut in Q2. "(Fed) participants appeared to move away from the view that monetary policy tightening could weigh on growth with a long lag next year, which weakens one argument for cutting,” wrote Goldman economist Jan Hatzius.
- Sevens Report on the FOMC statement: “The Fed used yesterday’s statement, dots and press conference to drive home that rates will stay higher for longer and that’s a message the market is going to have to digest in late 2023 or early 2024. That creates a potential problem for stocks once the Fed signals it’s officially done — because the market will lose that positive event and be faced with the reality of either 1) Sustainably higher rates or 2) Suddenly slowing growth that causes rate cuts. Neither are ideal for stocks….”
- Living up to your name. The Securities and Exchange Commission (SEC) voted 4-1 Wednesday to subject more funds to its so-called Names Rule, which says funds whose moniker suggests a particular investment strategy must allocate at least 80% of their portfolio to such assets. “Funds’ investment portfolio should match a fund’s advertised investment focus,” SEC Chair Gary Gensler said. Agency officials noted that a fund’s name is often the first piece of information consumers see when shopping for investments.
- “We’re going to see more reporting of things the public didn’t know was happening before.” —Doron Goldstein, a privacy and cybersecurity partner at law firm Withers, referring to new Securities and Exchange Commission rules requiring publicly traded companies to report the nature, scope and timing of material cyberattacks in 8-K filings and other regulatory forms.
— Federal Reserve: ‘Hawkish pause’ in its tightening campaign in ‘higher for longer’ message following the FOMC meeting Wednesday. Highlights:
- The Federal Reserve concluded its Federal Open Market Committee (FOMC) meeting with no change in monetary policy.
- Updated economic projections from Fed officials indicate that there may still be one more rate hike this year.
- FOMC statement highlighted solid economic activity, strong job gains, and elevated inflation.
- Fed Chairman Jerome Powell emphasized the Fed can now move more cautiously, but rate increases are not off the table.
- Fed’s focus remains on controlling inflation while navigating a soft landing for the U.S. economy.
- Despite no rate hike, the Fed is maintaining its balance sheet runoff, signaling continued tightening of monetary policy.
Outlook: Futures now show the implied Fed policy rate for the end of next year at a new cycle high of 4.85% — up 35 basis points in just over a week. And that’s still a quarter point below where Fed policymakers indicated they would be by then — and just 50bp below the ‘peak rates’ later this year.
— The Bank of England kept its policy interest rate at 5.25%, marking the first halt in its tightening cycle in almost two years. This decision comes after a series of rate hikes totaling 515 basis points, with the Monetary Policy Committee voting 5-4 in favor of maintaining the current rate. The central bank cites recent inflation data and anticipates a significant decline in CPI inflation, despite upward pressure from oil prices and continued declines in food and core goods price inflation. Policymakers remain prepared to tighten policy further if necessary.
Market perspectives:
— Outside markets: The U.S. dollar index was firmer, with the euro, yen and British pound all weaker against the greenback. The yield on the 10-year U.S. Treasury note was higher, trading above 4.46%, while there was a mixed tone in global government bond yields. Crude oil futures remained lower ahead of U.S. trading but up from earlier levels, with U.S. crude around $89.25 per barrel and Brent around $93.05 per barrel. Gold and silver were under significant pressure ahead of US market action, with gold around $1,938 per troy ounce and silver around $23.35 per troy ounce.
— Stellantis and GM furlough workers amid strikes, while Hollywood’s entertainment strike costs reach $6 billion. Stellantis and GM have initiated furloughs for dozens of autoworkers this week, with warnings that hundreds more could face similar situations as strikes in the automotive industry continue. This marks the first layoff announcement from Stellantis, the manufacturer responsible for vehicles under brands like Jeep, Ram, Dodge, and Chrysler. Ford and GM have already implemented layoffs or issued warnings about idling employees at two of their plants due to the ongoing targeted strikes. The strikes in the automotive sector are primarily centered around demands for improved pay and benefits by unionized autoworkers. However, the companies argue that meeting these demands would be financially unsustainable.
Meanwhile, the entertainment industry is grappling with significant financial losses due to Hollywood’s ongoing strikes. The combined losses related to the strikes are nearing $6 billion. Writers and executives from the four major studios are engaging in negotiations for a second consecutive day to reach a resolution and bring an end to the historic strike that has halted the majority of TV and movie productions.
— 6 billion: Approximate U.S. exports of petroleum products, in barrels per day, in the first half of 2023, up 2% from the same period last year and the highest level for exports in records dating to 1981, according to the Energy Information Administration.
— China continues buys of U.S. soybeans, cotton. USDA Export Sales data for the week ended Sept. 14 included activity for 2023-24 of net sales of 1,801 metric tons of wheat, 71,214 metric tons of corn, net reductions of 650 metric tons of sorghum, net sales of 205,589 metric tons of soybeans, and 25,923 running bales of upland cotton. Activity for 2023 included net sales of 2,501 metric tons of beef and 2,526 metric tons of pork.
— USDA daily export sale: 137,160 MT corn to Mexico. Of the total, 121,920 metric tons is for delivery during the 2023-2024 marketing year and 15,240 metric tons 2024-2025 marketing year.
— Palm oil prices have reached their lowest point in nearly three months due to worries surrounding weak demand and increasing production. The tropical oil has faced additional pressure from declining soybean oil prices. China’s ongoing strong demand for South American soybeans, even during the period typically dominated by the U.S., has raised concerns for American growers as their harvest season begins.
— Migrant surge disrupts U.S./Mexico border supply chain operations. The increasing influx of migrants heading towards the U.S. is beginning to disrupt supply chain operations along the U.S./Mexico border, the Wall Street Journal reports (link). Mexican railway company Ferromex has temporarily halted freight operations on several rail lines serving border cities like Ciudad Juárez due to a rising number of migrants boarding trains. Ferromex, a subsidiary of Grupo Mexico, has stopped approximately 60 freight trains traveling northbound on routes where authorities have reported multiple incidents, including fatalities, injuries, and unexpected childbirths. Mexican officials suggest that some railway workers may be facilitating the passage of migrants by stopping trains in rail yards, allowing them to evade authorities. Ferromex has reported up to 1,500 migrants on trains and in train yards at one of its locations. As a result of the situation, U.S. Customs and Border Protection temporarily closed one truck crossing in El Paso, Texas, to redirect field officers to assist in migrant processing. Truckers have noted that the suspension had a limited impact on the flow of goods across the border.
— Ag trade update: South Korea purchased 94,400 MT of U.S. milling wheat. Japan purchased 89,940 MT of milling wheat, including 26,450 MT U.S., 34,910 MT Canadian and 28,580 MT Australian. Algeria purchased around 600,000 MT of milling wheat from unspecified origins over the past two days and bought 30,000 MT of corn to be sourced from Brazil or Argentina.
— NWS weather outlook: Below-normal temperatures expected across much of the western U.S., with widespread precipitation over the northern Intermountain West and Rockies... ...Strong to severe thunderstorms and excessive rainfall expected for portions of the northern & southern Plains... ...Gusty winds, heavy rain, and high surf likely for portions of the Southeast and southern Mid-Atlantic Friday and into the weekend.
Items in Pro Farmer’s First Thing Today include:
• Renewed selling in grains overnight
• Aussie wheat crop likely to face further losses
• Cash cattle trade uncertainty
• Pork cutout back below $100
CONTINUING RESOLUTION (CR) & POSSIBLE GOV’T SHUTDOWN |
— House Republicans make progress on stopgap bill, but face Senate divide. House members took steps toward reaching an agreement to fund the government, garnering support from Republicans. However, their path appears to diverge significantly from the Senate’s stance.
The latest GOP plan involves a stopgap bill as a precursor to more significant spending cuts and the establishment of a commission to address the federal debt. Additionally, the House Rules Committee sent the Defense appropriations bill back to the floor, a sign of reduced tensions within the Republican caucus. Previously, a floor vote on a rule for the Defense appropriations bill faced challenges due to disputes over funding differences only loosely related to the legislation.
Renegade GOP Reps. Bob Good (R-Va.) and Ralph Norman (R-S.C.) expressed willingness to support a stopgap measure setting a top-line budget level of $1.526 trillion for appropriators, without redirecting old, rescinded funds to bolster those numbers. House appropriators had initially adopted a $1.47 trillion top-line allocation but permitted the use of $115 billion in rescinded funds, effectively providing around $1.59 trillion in spending.
This lower funding level will further widen the gap between House and Senate funding levels, which previously stood at approximately $100 billion. The Senate’s official allocation was $1.59 trillion, but emergency spending led to bills with roughly $1.68 trillion in funds.
House Republicans still must resolve various details to secure support for their stopgap measure, even though it faces little chance of passing in the Senate. The inclusion of enforcement mechanisms in a debt commission measure is crucial for winning the vote of Rep. Victoria Spartz (R-Ind.), who emphasizes the need for Senate consideration of reform language.
Timeline: A vote on the defense spending bill (HR 4365) could pave the way for a vote on the continuing resolution on Saturday.
Bottom line: House Speaker Kevin McCarthy (R-Calif.) still lacks the necessary votes following a closed-door meeting. Other renegade GOP members, including prominent McCarthy critic Matt Gaetz and Cory Mills of Florida, oppose the stopgap spending bill and instead advocate for a prolonged government shutdown while Congress works to pass 12 individual spending bills.
Of note: Senate Republicans are expecting McCarthy to seek help from House Democrats to avert a government shutdown by reaching a bipartisan agreement as divisions within the GOP prevent unity on the issue. Senate Republicans are growing impatient with McCarthy’s efforts and are suggesting he explore other options, including seeking votes across the aisle. They emphasize the need for a pragmatic approach to prevent a shutdown and fund key priorities.
Meanwhile, former President Trump last night weighed in on the funding plan, saying in a Truth Social post that “Republicans can and must defund all aspects” of the government. Some House Freedom Caucus members are taking Trump’s criticism as encouragement to “hold the line” against a deal.
Impacts: Long lines at airports. Delayed food-safety inspections. Halted infrastructure projects. Military personnel working without pay. These are just some of the potential consequences if the federal government partially shuts down next month, according to the White House.
RUSSIA/UKRAINE |
— Russia plans a new tax on exporters to soak up excess revenue companies reap when the ruble depreciates past a certain level and support its strained wartime budget. Link to details via Bloomberg.
— Ukraine wheat shipment reaches Turkey. The cargo ship “Resilient Africa,” loaded with 3,000 MT of Ukrainian wheat, arrived off Turkey’s Bosphorus Strait on Thursday. It is the first vessel loaded with grain from Ukraine to sail in and out of the Black Sea using a temporary corridor. Another ship “Aroyat” has yet to leave the port of Chernomorsk.
— U.S. urged JPMorgan to ‘be patient’ before halt to processing Russia grain payments. Washington urged JPMorgan to “be patient” before the U.S. bank stopped processing agricultural payments for Moscow after it quit the Black Sea grain export deal, a senior State Department official told Reuters. “It was JPMorgan’s decision, and in fact, we had... made clear to the Russians that if they could show signs they were returning to the deal, it would be much easier to keep this payment system alive,” James O’Brien, head of the State Department’s Office of Sanctions Coordination, told Reuters. He said JPMorgan made a “completely commercial decision based on business and reputational factors.”
— Ukraine agrees on grain trade deals with Slovakia, Poland. Slovakia and Ukraine have agreed to establish a licensing system for trading grains, allowing a ban on imports of four Ukrainian commodities to Slovakia to be lifted once the system is set up, the Slovak ag ministry said. The ministry did not give details on how the licensing system would work. Ukraine’s ag minister also agreed to “work out an option to cooperate on export issues” with Poland.
— Ukrainian President Volodymyr Zelenskyy is scheduled to meet with President Biden and visit the U.S. Capitol today as he seeks increased support for Kyiv. In the past few hours, Ukraine’s military successfully intercepted 36 out of 43 missiles launched by Russia in attacks conducted across the country. The threat of further missile strikes remains imminent. During the aerial assaults on Kyiv, Ukrainian officials reported at least seven people wounded, while two individuals were injured in Kharkiv. In addition, Russian shelling resulted in the deaths of at least two people in the southern city of Kherson.
The White House is preparing to offer a new aid package to Ukraine as part of Zelenskyy’s visit, according to a U.S. official cited by CNN.
POLICY UPDATE |
— ERP Phase 2 payments increase to $10.99 million. As of Sept. 19, total payments made under the Emergency Relief Program (ERP) have climbed to $7.45 billion. This represents a significant increase since the last update in late August. Additionally, payments under ERP Phase 2 now total $10.99 million, benefiting 6,839 recipients. This marks a substantial rise from the previous update, which reported $7.14 million distributed to 4,763 recipients in the week ending Aug. 27. Notably, there have been no reported changes to the Coronavirus Food Assistance Program (CFAP) efforts.
— As for ERP Phase 2 payments for 2020-21 losses, a USDA official told us: “We are doing our best at getting these payments out the door and doing a college try to get them out before the possible shutdown. Originally, they were scheduled for mid-October, but we are trying to move that up. Obviously, no guarantees but we are scrambling.”
— GAO: USDA’s use of $3.1 bil. in CCC funds for new climate-smart programs deemed legitimate. USDA has been found to be within its legal rights regarding the use of Commodity Credit Corporation (CCC) funds for new financial assistance programs. The General Accountability Office (GAO) decision (link) states that USDA did not violate the CCC Charter Act or the Antideficiency Act when transferring CCC funds for programs not specifically identified in its budget submission to Congress. Furthermore, the Partnerships for Climate-Smart Commodities (PCSC) program, which supports the marketing and production of climate-smart agricultural commodities, is authorized under section 5(e) of the CCC Charter Act and is not subject to the restrictions of the Environmental Quality Incentives Program (EQIP).
Sen. Roger Marshall (R-Kan.) asked GAO to make a decision on the matter.
— Coalition calls for wealthiest farmers to bear more crop insurance costs in farm bill. A coalition of think tanks, budget hawks, and environmental groups has advocated for changes in the upcoming farm bill, including making the wealthiest farmers contribute a larger share of the cost of taxpayer-subsidized crop insurance. They argue that there is no immediate need to increase farm subsidies despite appeals from farm groups. “There is no obvious or urgent need to increase farm subsidies,” said Nan Swift of the R Street Institute.
The reformers within this coalition have proposed implementing income and payment limits to access crop insurance and reducing federal support for insurance companies and agents who sell the policies. Currently, the government covers 62 cents of every $1 in premiums, which amounted to approximately $11.6 billion in 2022. Additionally, insurers are guaranteed underwriting gains of at least 14.5 percent annually, with over $1 billion paid out each year for administrative and operating costs.
The coalition emphasizes the need to establish guardrails on the crop insurance program, similar to the eligibility and payment limits imposed on crop subsidies. They argue that the absence of such limits on the insurance program does not make sense. “Put some guardrails on that program,” said Joshua Sewell of Taxpayers for Common Sense, just as there are eligibility and payment limits on crop subsidies. “It makes no sense that we have no such limits on the crop insurance program,” said Scott Faber of the Environmental Working Group.
The coalition asserts that agriculture is an industry that receives significant government support and should not be exempt from reform. They suggest that the traditional practice of building urban-rural coalitions in Congress for farm bill passage, with various interest groups supporting the legislation, needs to be reevaluated as it may no longer be sustainable. Farm household income is far above the median income of U.S. households overall, and USDA estimates that farm profitability this year will be the second highest on record, said Bryan Riley of the National Taxpayers Union. Chris Edwards of the libertarian Cato Institute, said: “Agriculture is an unusually coddled industry.”
Perspective: Says a farm policy analyst: “First, those who propose to impose a pay limit or AGI means test on crop insurance clearly do not understand principles of insurance. One does not intentionally strive to remove good risk from an insurance risk pool which is what pay limits and AGI means testing would do by removing good risk, full-time farm and ranch families. The consequence would be higher premiums paid by those producers left in the risk pool. Hence, all producers would be harmed by the proposal. It would also invite increased calls for ad hoc assistance as farmers and ranchers are locked out of crop insurance.
“Second, proposals to cut premium support for farmers and ranchers would undo two key pillars that made crop insurance the success it is today: the 1994 reform that increased premium support and more especially the 2000 reform. Undo these two laws and we return to the fledgling crop insurance of yesteryear. That is undoubtedly what these groups want.
“Third, as has been refuted countless times, these groups refer to the ‘wealthiest farmers’ in referring to full-time farm and ranch families and they do so through a sleight of hand. USDA defines farmer as anyone that produces $1K in agricultural products in a year. Hence, full-time farmers and ranchers appear “wealthy” in comparison to a 4-H student who sells a prize bull, and the universe of these full-time producers also looks small in comparison with the total number of ‘farmers’. These groups serve up the same nonsense year after year hoping that at some point that lawmakers will fall for the deception.
“Finally, rain or shine, the groups invariably argue that farmers and ranchers don’t need support. If prices are strong, they point to that and say a safety net is unnecessary. If prices are depressed, they say that support should not be provided because farmers and ranchers should just do something else. One of these groups seriously argued that a farmer or rancher faces no more risk than a barber. Such a demonstrably errant declaration discredits the entire bunch.”
PERSONNEL |
— Senate confirms Gen. Charles Q. Brown Jr. as Joint Chiefs Chairman amid ongoing political standoff. The Senate moved marks a significant moment as he becomes only the second African American to hold this prestigious position. The confirmation came after Democrats temporarily put aside their ongoing dispute with Sen. Tommy Tuberville (R-Ala.) to move forward with President Biden’s nominee. The 83-11 vote averted the potential embarrassment of leaving the top military position temporarily vacant. However, it doesn’t resolve the larger issue of around 300 senior officers who remain in limbo due to Tuberville’s months-long hold on military promotions, which stems from a disagreement over the Defense Department’s abortion policy. The 11 senators voting against Gen. Brown’s confirmation were all Republicans.
This development opens the door for other potential confirmation votes for Marine Corps Gen. Eric M. Smith and Army Gen. Randy George to lead their respective services, with the possibility of new Navy and Air Force leaders once their nominations clear Senate scrutiny.
CHINA UPDATE |
— Bashar al-Assad, Syria’s president, arrived in China on his first visit there since the start of his country’s civil war in 2011. Assad is expected to seek Chinese funds to help rebuild Syria, ravaged by over a decade of conflict. Assad, an international pariah since the war, recently reestablished relations with several countries; in May, Syria was readmitted into the Arab League.
TRADE POLICY |
— WSJ: Iran’s oil exports surge amid quiet diplomacy with U.S. and eased sanctions enforcement. Iran’s oil exports have experienced significant growth due to a shift in U.S. policy and a more lenient approach to sanctions enforcement during diplomatic negotiations between Washington and Tehran, the Wall Street Journal reports (link). This policy change has led to the recent release of five American detainees and other concessions. The Biden administration issued a waiver that allowed international banks to transfer $6 billion in frozen Iranian assets from South Korea to Qatar, a move that coincided with the prisoners’ release.
Furthermore, Iran’s oil shipments to China, its largest customer, have been on the rise as the U.S. opted not to aggressively enforce international sanctions.
Former U.S. officials suggest that even before negotiations over detainees, the United States had made a strategic decision not to rigorously enforce sanctions, aiming to facilitate engagement with Iran at the diplomatic level. This shift has contributed to the growth in Iran’s energy exports in recent years.
ENERGY & CLIMATE CHANGE |
— Groups urge Biden administration to use GREET model for SAF tax credit eligibility. Several organizations, including the Clean Fuels Alliance America, the American Soybean Association, National Oilseed Processors Association, and the U.S. Canola Association, have called upon the Biden administration to utilize the Argonne National Laboratory’s GREET model as the “similar methodology” option for determining eligibility for Sustainable Aviation Fuel (SAF) tax credits, as outlined in the Inflation Reduction Act. They argue that not using the GREET model could hinder investments in SAF production, which their members have heavily committed to. The groups noted that their members have invested $3.8 billion in new construction or optimization of facilities and some $6 billion to expand or build new oilseed processing capacity in 10 U.S. states. USDA Secretary Tom Vilsack said last week that his agency was going to expend around $400,000 to update the GREET model with the expectation it will be used by Treasury for the SAF credits. The Treasury is expected to release guidance on SAF credits later this year. Link for details.
— Biden launches American Climate Corps to tackle environmental challenges. The program is designed to engage over 20,000 young individuals in its first year to address climate-related issues. Drawing inspiration from the New Deal-era Civilian Conservation Corps, the Climate Corps will focus on conservation, clean energy projects, and community resilience efforts. It aims to provide paid opportunities, with many positions requiring no prior experience, and Climate Corps members may become eligible for education awards. Additionally, the Office of Personnel Management is considering a rule-making process to offer a streamlined path to civil service jobs for participants. The initiative, which had been proposed in previous climate legislation, is now being funded through existing sources. Link for more via the Associated Press.
USDA Secretary Tom Vilsack said the Forest Corps, operating through the U.S. Forest Service, would be the first major interagency partnership with the Climate Corps. “USDA is proud to be part of this effort through the Forest Corps … and will support efforts to address the wildfire crisis,” said Vilsack via social media. Some 80 young adults, ages 18 to 26, will join the Forest Corps in summer 2024 to work on wildfire prevention, reforestation, and other projects as part of the Forest Service’s long-term wildfire strategy. Participants will receive compensation equivalent to $15 an hour, including lodging, transportation, a living allowance, and health benefits.
— DOE allocates $47.7 million for 16 clean hydrogen projects to advance technology and infrastructure. The Department of Energy (DOE) has unveiled a significant investment of $47.7 million distributed across 16 research, development, and demonstration (RD&D) projects focused on advancing clean hydrogen technologies. These selected projects have the goal of reducing technology costs, enhancing hydrogen infrastructure, and optimizing the performance of hydrogen fuel cells. When combined with private sector contributions, the total investment in these projects amounts to $58.4 million.
These initiatives will be overseen by the DOE’s Hydrogen and Fuel Cell Technologies Office (HFTO) and are concentrated on critical areas within the hydrogen supply chain. These include technologies related to hydrogen delivery and storage, as well as advancements in fuel cell technology.
Before the awards are officially granted, the DOE stipulates that a negotiation process must be undertaken with the project applicants, and it retains the right to rescind the offers during this period. The investment is aimed at accelerating the development and deployment of clean hydrogen solutions to support the transition to a more sustainable energy future.
— EPA seeks bids for grants to reduce GHG emissions. EPA initiated a request for proposals from state, local, and tribal governments to access a total of $4.6 billion in grants designed to support the implementation of climate action plans and the reduction of greenhouse gas (GHG) emissions. This funding has been authorized under the Inflation Reduction Act (IRA).
The grant awards will be distributed in two installments. The first installment will comprise 30 to 115 grants ranging from $2 million to $500 million each. The second installment is dedicated specifically to tribes and territories, with 25 to 100 grants available, ranging from $1 million to $25 million each. These grants are aimed at assisting government entities in their efforts to combat climate change and achieve GHG emission reduction goals.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY |
— Those who receive food stamps and other government-funded food assistance programs will be able to order groceries from the Uber Eats app using those benefits starting next year. There are 41 million people who received benefits in June from the U.S. Supplemental Nutrition Assistance Program, commonly known as SNAP, according to data from USDA, making it the largest food assistance program in the country. Uber said it made the change to reduce “barriers to fresh groceries,” particularly for vulnerable populations living in food deserts or those facing transportation barriers.
HEALTH UPDATE |
— Biden administration is resuming a program to deliver free Covid-19 tests through the mail, according to Secretary of Health and Human Services Xavier Becerra. The federal program had restarted last December in partnership with the U.S. Postal Service, allowing households to order a total of four at-home Covid tests for free. However, plans to preserve the remaining test kits and a decline in hospitalizations prompted officials to pause the program in June. The latest decision to resume the program comes amid a slight uptick in Covid-related hospitalizations in the United States.
The program previously sent 775 million tests through the mail, reaching more than two-thirds of American households, according to DHHS, but it was paused last September over test supply concerns, then relaunched in December 2022, before being suspended again on June 1. The tests are meant to be used through the end of the year.
— Bryan Johnson, a former tech executive, is spending millions trying to reverse aging with a strict regimen of 111 pills a day, a cap that shoots red light onto his scalp and more. Link for details via Time magazine.
POLITICS & ELECTIONS |
— CNN poll: Trump tops rivals in New Hampshire, DeSantis falls to fifth place. A CNN/University of New Hampshire poll of 2,107 adults, including 845 likely GOP primary voters, taken 9/14-18 shows Donald Trump leading with 39%, followed by Vivek Ramaswamy at 13%, Nikki Haley at 12%, Chris Christie at 11%, and Ron DeSantis at 10%. DeSantis’ support has dropped since a similar poll in July, driven by a sharp drop-off among moderates, from 26% backing him in July to 6% now. He fell a smaller 8 points among conservatives. Link for details.
OTHER ITEMS OF NOTE |
— India suspends visa issuance to Canadians amid diplomatic rift over Sikh killing. The move exacerbates an ongoing diplomatic dispute between the two nations. The dispute stems from allegations made by Canadian Prime Minister Justin Trudeau linking Indian “agents” to the killing of Canadian Sikh separatist Hardeep Singh Nijjar. Canada expelled a senior Indian diplomat in response, and India reciprocated by expelling a Canadian diplomat. India’s government has also issued a warning to its citizens traveling to Canada, citing concerns about “anti-India activities” and “politically condoned hate crimes.” This dispute has strained relations between the two countries, which have a significant Indian diaspora population and bilateral trade amounting to $10.5 billion in goods.
Canada’s embassy in New Delhi announced Thursday it would “temporarily adjust staff presence” to protect its diplomats from threats, and days after the two governments expelled senior diplomats identified as the respective station chiefs of their intelligence services.
— Glyphosate nears EU renewal. The European Commission proposed renewing EU approval of glyphosate, the most widely used weedkiller in the world, for 10 years, with some new restrictions on its application. Link for details.
— Calendar of events today include:
Thursday, Sept. 21
- Rural broadband funding. House Energy and Commerce Communications and Technology Subcommittee hearing on “Connecting Every American: The Future of Rural Broadband Funding.”
- Russia’s Wagner Group. Brookings Institution virtual discussion on “The Legacy and Future of the Wagner Group.”
- Workplace shifts. Washington Post Live virtual discussion on “How Policymakers, Businesses and Educators are Adapting to the Changing Workplace.”
- Renewable energy. International Trade Administration meeting of the Renewable Energy and Energy Efficiency Advisory Committee.
- Rural communications issues. Federal Communications Commission (meeting on issues including satellite application processing, updating the 5G fund for rural America, direct access to phone numbers and updating obsolete TV broadcasting rules.
- FDIC agenda. Cato Institute forum on “Insights on the Federal Deposit Insurance Corporation’s (FDIC) Agenda.”
- Future of U.S./Russia relations. Georgetown University Walsh School of Foreign Service’s Center for European, Russian, and East European Studies virtual discussion on “Russia Brief: When Things Fall Apart: Can U.S./Russia Relations be Rebuilt?”
- Crypto issues. New America virtual discussion on “Numbers Go Up: Inside Crypto’s Wild Rise and Staggering Fall.”
- U.S./China policy, Ukraine and U.S. elections. Quincy Institute for Responsible Statecraft virtual discussion on “The 2024 Presidential Race is on: How Will U.S./China Policy and the Ukraine War Shape It?”
- Carbon dioxide removal. United States Energy Association virtual discussion on “Unlocking Carbon Dioxide Removal’s (CDR) Potential.”
- IPEF and digital trade. American Enterprise Institute for Public Policy Research discussion on “Digital Trade Rules and the Indo-Pacific Economic Framework for Prosperity.”
- Veterans and SNAP. RAND Corporation virtual discussion on “Why Don’t Food-Insecure Veterans Enroll in SNAP? Insights from New RAND Research, Government, and Veteran Organizations.”
- Economic reports. Jobless Claims | Philadelphia Fed Manufacturing | Existing Home Sales | Current Account | Leading Indicators
- Energy reports. Singapore onshore oil product stockpile weekly data | EIA Natural Gas Report.
- USDA reports. FAS: Export Sales NASS: Livestock Slaughter
KEY LINKS |
WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | Student loan forgiveness | Russia/Ukraine war, lessons learned | Russia/Ukraine war timeline | Election predictions: Split-ticket | Congress to-do list | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | China outlook | Omnibus spending package | Gov’t payments to farmers by program | Farmer working capital | USDA ag outlook forum | Debt-limit/budget package |