Debate Continues on Key Farm Bill Topics: Reference Prices and Acreage Bases

China contagion risk? | Mortgage rates at 21-year high | Rising bond yields have investors on edge

USDA daily export sale: 112,000 metric tons of corn to Mexico for 2023-24 marketing year.

Bearish equities signal on Thursday, as all major indexes closed below their 50-day moving averages. For the Dow, it was the first time doing so since June 1. All three indexes are headed for a losing week — what would be the third straight down week for the Nasdaq and the S&P. The Dow is on pace for its worst week since March.

Despite a moderation in the farm economy and an uptick in interest rates, farmland values have demonstrated resilience in the second quarter. Although the growth rate of farmland values has slowed compared to the rapid increase in recent years, it has remained robust in the first half of 2022, according to a Kansas City Fed report. Details below.

A substantial number of Americans continue to grapple with financial instability, as indicated by recent reports. Details below.

Oil is headed for its first weekly loss since June as concerns over economic weakness in China and potentially even tighter monetary policy in the United States.

Deere & Co. lifted its financial outlook for the year as machinery demand from farmers remained robust despite slumping crop prices. The world’s top agricultural equipment producer expects net income for fiscal 2023 between $9.75 billion and $10 billion. “Fundamentals are expected to continue fueling solid demand for our equipment, supported by a strong advance-order position,” Chief Executive Officer John May said in the statement. But a recent slowdown in the sales of used agricultural equipment is heightening concerns for a “cycle peak” for the sector, according to Bloomberg Intelligence. Deere stock opened lower today.

China slashed its holdings of Treasurys to a 14-year low in June, as tensions between Washington and Beijing persist and the U.S.’ rivals try to undermine the dollar’s supremacy. The world’s second-largest economy trimmed its exposure to American government debt to $103 billion, or 11%, according to Treasury Department data. It’s the third straight month that Beijing has sold Treasurys and brings its total holdings to their lowest level since May 2009, per the South China Morning Post. We have more on Treasury yields in the Markets section.

Meanwhile, China’s central bank has stepped up to defend its currency following the latest series of weak economic data releases. The midpoint on the onshore yuan was set at 7.2006 against the dollar overnight, while the Hang Seng benchmark index closed in bear market territory, more than 20% below its last highs in January. Problems in China might also be leading to flight-to-safety trades, with the yield on the benchmark 10-year U.S. Treasury this week surging to its highest level since 2007. Big concern cited in the WSJ: Investors are growing concerned about the possibility of a “Lehman moment” occurring in China.

The U.S. Commerce Department is expected to conclude that some Chinese manufacturers are illegally dodging tariffs by assembling solar equipment in other Asian countries before shipping it to the United States.

Mexican President López Obrador in mid-November will talk with President Joe Biden on Pan-American economic integration and development.

Inflation in Japan slowed in July, as energy prices fell. Meanwhile, Eurozone inflation eased in July.

The latest advancement in supply-chain tracking involves using edible microchips, with Italian Parmigiano-Reggiano cheese producers leading the way.

On Thursday, spot electricity rates in Texas surged by over 60 times their usual levels, almost reaching a price cap.

EU is set to hit winter gas-storage targets two months early. The most recent data suggests that storage facilities within the European Union (EU) are approaching their maximum capacity of approximately 100 billion cubic meters.

Recent decision by India to ban exports of white rice is expected to bring short-term benefits to U.S. rice producers and exporters due to increased global demand for their product, according to a research brief from CoBank’s Knowledge Exchange.

A potential strike by the United Auto Workers (UAW) union against Detroit’s major automobile manufacturers could result in an initial economic loss exceeding $5 billion within the first 10 days, based on calculations by consulting firm Anderson Economic Group.

— First vessel from Ukrainian port reaches Bosphorus since grain deal ended.

— Romanian Prime Minister Marcel Ciolacu has indicated that his country could potentially accommodate 60% of Ukraine’s grain transit following Russia’s withdrawal from the Black Sea Grain Initiative.
— A fleet of ghost ships is playing a crucial role in Russia’s efforts to bypass sanctions and support both its global oil supply and its war in Ukraine.

Awaited: EPA announcement of final rule with amendments to the “Revised Definition of Waters of the United States” (WOTUS). OMB has concluded its review of the EPA’s proposed amendments.

FarmDoc again puts out a report on reference prices and base acres. Meanwhile, a veteran farm policy observer gets to the bottom line via the debate on these two sensitive topics. Details in Policy section.

Is a mega change coming for Argentina? The shock front-runner in Argentina’s presidential election, libertarian Javier Milei, would strip out state intervention from the giant farming industry to unleash an export boom.

The head of emergency management in Maui has resigned due to health reasons, coming a day after he defended the decision not to activate the island’s warning siren system during the fatal wildfires. The Hawaii Emergency Management Agency reported that the absence of siren activation may have saved numerous lives as the fires spread. Hawaiian Electric, the prominent power company in Maui, is also under scrutiny for not shutting down power lines during hazardous fire conditions. The fires’ exact cause is uncertain, but a class action lawsuit has been filed against the power company, claiming that the wildfires resulted from live power lines being toppled by strong winds.

Equities today: Asian and European stock markets were mixed in overnight trading. U.S. Dow opened around 200 points lower and then pared the losses. In Asia, Japan -0.6%. Hong Kong -2.1%. China -1%. India -0.3%. In Europe, at midday, London -0.8%. Paris -0.8%. Frankfurt -0.7%.

U.S. equities yesterday: All three major indices registered losses Thursday, with the Dow down 290.91 points, 0.84%, at 34,474.83. The Nasdaq declined 157.70 points, 1.17%, at 13,316.93. The S&P 500 declined 33.97 points, 0.77%, at 4,370.36.

Deere & Co. has surpassed expectations in their third-quarter profits and subsequently raised their annual income forecast due to robust demand. The company’s quarterly profits surged by 60%, driving its net income for the third quarter to $2.98 billion, with earnings per share reaching $10.20 — both figures surpassing predictions. Additionally, Deere & Co.'s worldwide net sales escalated by 12% to $15.8 billion. This impressive performance has prompted the company to revise its 2023 annual net income projection to a range of $9.75 billion to $10 billion, up from the previous outlook of $9.25 billion to $9.5 billion. Deere & Co. also confirmed that their order book remains strong through 2024. CEO John May highlighted the positive market conditions and an improving operating environment as driving factors for the company’s ongoing success, noting that “fundamentals are expected to continue fueling solid demand for our equipment.”

Says one analyst: “Not surprising since they got the supply chains fixed. However, there is a lot more equipment starting to stock up at the dealerships.”

Agriculture markets yesterday:

• Corn: December corn futures rallied 4 1/4 cents, settling at $4.85 3/4, nearer the session high.
• Soy complex: November soybeans rose 6 1/2 cents to $13.30, a near mid-range close after marking the highest intraday price since Aug. 4. Meanwhile, September soymeal fell $4.90 to $399.60, the lowest close since July 7, while September soyoil rose 109 points to 65.50 cents, a high-range close.
• Wheat: December SRW wheat fell 7 3/4 cents to $6.15 1/4 and near mid-range. Prices hit another 2.5-month low. December HRW wheat lost 11 cents at $7.41 1/2 and nearer the session low. December spring wheat fell 2 3/4 cents to $8.03 1/2.
• Cotton: December cotton fell 111 points to 83.61 cents, the lowest close since July 18.
• Cattle: October live cattle fell 95 cents to $178.325 and posted a six-week-low close. October feeder cattle lost $1.65 at $249.325 and hit a three-week low.
• Hogs: Hog futures rebounded from recent losses, with the nearby October contract posting a 97.5-cent advance to $79.15.
  

Ag markets today: A combination of weather concerns and increased geopolitical uncertainty in the Black Sea region supported corn, soybeans and wheat overnight. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents higher, soybeans were 12 to 15 cents higher, SRW wheat was 11 to 12 cents higher, HRW wheat was 8 to 9 cents higher and HRS wheat was mostly 7 cents higher. Front-month crude oil futures and the U.S. dollar index were both modestly weaker.

Market quotes of note:

• Sevens Report on Treasury yields: “With the U.S. Treasury flooding the fixed income markets with supply (i.e., bonds for sale) this summer, we are seeing the natural economic reaction of falling prices and rising yields. The impact of this surge in outstanding debt will vary across asset classes but the subsequent rise in yields amid this summer’s rise in supply of Treasuries will remain a headwind on stocks in the near term as the fundamental backdrop simply cannot support valuations any higher than the late-July peak.”
  
• Another AI warning. “If you’re not concerned about it, you’re going to get burned.” —Alistair Erskine, chief information and digital officer at Emory Healthcare, on the need for organizations to watch for AI pitfalls.
  
• Transportation outlook. “It might be a bit early to be excited, might not be the right word, but certainly we think that the worst is largely behind us.” — Derek Leathers, CEO of truckload carrier Werner Enterprises, at the Deutsche Bank Transportation Conference this week.
  
• “We expect that Brent will not break out of the yearly range,” Rabobank analyst Joe DeLaura said in a report, noting that Brent struggled to break through its 2023 highs in recent days. “We see the current macro overhang and worsening Chinese economic data to keep this ceiling intact.”
  

Despite a moderation in the farm economy and an uptick in interest rates, farmland values have demonstrated resilience in the second quarter. Although the growth rate of farmland values has slowed compared to the rapid increase in recent years, it has remained robust in the first half of 2022, according to a Kansas City Fed report (link).

The overall strength in farm finances over the past years has continued to provide support for the conditions of agricultural credit. While margins for key commodities have narrowed in recent months due to rising production costs and declining prices, farm loan performance has remained historically strong as of early 2023. Additionally, many agricultural banks have maintained healthy liquidity levels, positioning them well to address potential growth in lending demand that may arise in the future.

A substantial number of Americans continue to grapple with financial instability, as indicated by recent reports. According to a LendingClub study, in June, 61% of U.S. adults relied on their forthcoming income to cover essential expenses. Additionally, a Bankrate survey revealed that over 70% of Americans lack a sense of financial security. Analyzing the numbers reveals why this pattern persists. The average U.S. worker brings home around $3,300 monthly after accounting for taxes and benefits, based on data from the U.S. Bureau of Labor Statistics. Contrastingly, monthly expenditures can amount to $2,800, equating to approximately 85% of the median take-home pay. This calculation doesn’t even include childcare expenses or debt payments, which further contribute to the financial strain.

Mexican President López Obrador will talk with President Joe Biden on Pan-American economic integration and development. The bilateral talks are scheduled to take place during the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, which is set to occur from Nov. 15 to 17. López Obrador shared this information during a press conference earlier this week, noting that the talks will involve the participation of officials from the 21 member economies attending the APEC leaders’ meeting. The focus of the discussions will be on fostering economic cooperation and development within the Pan-American region. “What I’m proposing [to Biden] is that we don’t limit ourselves to consolidating the market and economic activity in North America, but rather seek the integration of all the American continent,” he said. During bilateral talks in January, López Obrador urged Biden to lead a “new policy of economic and social integration on our continent.”

Inflation in Japan slowed in July, as energy prices fell. Core consumer prices, which excludes volatile food costs, increased by 3.1% year on year, down from 3.3% in June. The Bank of Japan has continued to maintain an ultra-loose monetary policy, although core inflation has exceeded its 2% target for a 16th straight month.

Eurozone inflation eases in July. Eurozone consumer inflation increased 5.3% annually in July, down from a 5.5% rise the previous month. Core inflation, minus food and energy costs, was unchanged at 5.5%. The final inflation stats confirmed preliminary data that signaled slower inflationary growth, indicating price pressures have likely peaked.

The latest advancement in supply-chain tracking involves using edible microchips, with Italian Parmigiano-Reggiano cheese producers leading the way, the WSJ reports (link). These microchips are employed to combat counterfeit products, marking the ongoing struggle between genuine and fake goods.

This battle has intensified as European Union (EU) food producers adopt more measures to safeguard their prestigious brand names against imitations, supported by regulations that offer protected status to specific products. Over 3,500 products worth around $87 billion fall under these rules. Various innovative techniques are being utilized to ensure the provenance of goods across Europe, such as wineries incorporating serial numbers, invisible ink, and holograms on their bottles, alongside the proliferation of QR codes.

The chips are also being tested in the automobile sector to verify the authenticity of car components, and drug manufacturer Merck KGaA is preparing to implement them as well.

Market perspectives:

• Outside markets: The U.S. dollar index was weaker, with the euro slightly higher against the greenback. The yield on the 10-year U.S. Treasury note has eased ahead of U.S. market action, trading around 4.22%, after rising to the highest point since 2007 in Thursday trading. Crude oil futures were slightly lower, with U.S. crude around $80.30 per barrel and Brent around $83.95 per barrel. Gold and silver were higher, with gold around $1,923 per troy ounce and silver around $22.88 per troy ounce.

• Treasury yields on the rise. BofA strategists warned investors to brace for the return of the “5% world” that prevailed before the financial crisis, while BlackRock and Pimco said inflation may push long-term yields even higher.

• On Thursday, spot electricity rates in Texas surged by over 60 times their usual levels, almost reaching a price cap. This spike in rates was due to the power grid experiencing extremely constrained conditions for energy supply, driven by the ongoing intense heat that is causing high demand for electricity as households and businesses increase air conditioning usage.

• Oil headed for its first weekly loss since June as concerns over economic weakness in China and potentially even tighter monetary policy in the U.S. combined to overshadow signs of a solid physical market. Link for more via Bloomberg.

• EU is set to hit winter gas-storage targets two months early. The most recent data suggests that storage facilities within the European Union (EU) are approaching their maximum capacity of approximately 100 billion cubic meters. This volume accounts for about 25% to 30% of the EU’s winter gas consumption, as reported by EU data. The gas-storage levels are on the brink of hitting their pre-winter target more than two months early. Nonetheless, the energy security situation in Europe is still delicate and hinges on changes in imports of liquefied natural gas (LNG), which can be unpredictable. Link to more via the WSJ.

• $809: Average spot price this month to ship a 40-foot container from North Europe to the U.S. East Coast, down about 85% since January, according to Xeneta.

• A potential strike by the United Auto Workers (UAW) union against Detroit’s major automobile manufacturers could result in an initial economic loss exceeding $5 billion within the first 10 days, based on calculations by consulting firm Anderson Economic Group. As discussions continue between Ford Motor, General Motors, Chrysler parent Stellantis, and union representatives, Anderson arrived at this estimate by considering potential negative impacts on UAW workers, manufacturers, and the broader auto industry if negotiations do not succeed.

For a 10-day strike, projected losses would encompass $859 million in wage reductions for workers and $989 million in losses for manufacturers. If only one automaker were to halt production due to a strike, it could lead to losses amounting to $665 million. The current UAW contract is set to expire in September. In 2019, negotiations resulted in a 40-day strike against GM, which reportedly cost the company about $3.6 billion in earnings for that year.

Vehicle inventory, which had hit record lows during the Covid-19 pandemic, has been gradually increasing, reaching 162,000 units in June. However, this is still significantly below the 649,000 units recorded in September 2019.

As negotiations progress slowly, the UAW has indicated the potential for a labor strike, while automakers maintain their commitment to productive talks. Union members are expected to vote on whether to authorize a walkout, though such a vote does not necessarily guarantee that a strike will occur.

• Grain trader and analyst Richard Crow on markets: “U.S. weather is the dominant variable today. The ridge of high pressure will eliminate rain for at least a week. The temps will expand to the high 90s in the East to 100 plus in the West. The models show 102 to 107 for Western Ia., Neb, and South. Minn. could reach 100 in the South. Central Ill. is 96 to 100 type temperatures. The ridge is expected to move West late in the week, but there is some question. What damage will be done? The corn crop will likely be pushed to maturity, and the beans stop growing. The Pro Farmer tour will be next week, and the market will be listening for the reports. With the late heat likely to stop the U.S. yields from growing, the Brazil crops will become important in the face of the El Niño situation.”

• According to Reuters, officials from India’s weather department anticipate that August will be the driest in over a century due to limited rainfall, partially attributed to the El Niño weather phenomenon. The country is projected to experience the lowest August rainfall since record-keeping began in 1901, which could negatively impact the yields of various crops, including rice. An unnamed weather department official noted, “The monsoon is not reviving as we had expected,” and highlighted a significant decline in rainfall across the southern, western, and central regions.

The concern arises from the potential consequences on food prices due to reduced production.

Rainfall data for the first 17 days of August indicates a 40% drop from normal levels, with only 90.7 millimeters (3.6 inches) recorded. The report suggests that India might receive less than 7 inches of rainfall on average for the entire month. This situation could potentially favor rice suppliers like the U.S., as importing nations seek alternative sources following India’s historical role as a major rice exporter.

• Recent decision by India to ban exports of white rice is expected to bring short-term benefits to U.S. rice producers and exporters due to increased global demand for their product, according to a research brief from CoBank’s Knowledge Exchange (link). The ban has led to higher global rice prices, benefiting U.S. rice producers and positioning them to meet the heightened export demand, particularly from regions like Iraq and the Caribbean, as well as Central and South America.

However, the favorable situation is anticipated to be short-lived. Because of the ban being lifted in the future, a surplus of rice from India is expected to flood the export market, causing a sudden oversupply. This excess supply is projected to result in a sharp price correction and potentially depress rice prices globally, including in the U.S., leading to lower incomes for rice farmers.

India implemented the export ban due to factors such as food inflation, erratic weather impacting its rice crop, rising domestic rice prices, and concerns over geopolitical risks and the potential impact of El Nino on its harvests. This move caused importers from various regions to scramble for rice supplies, causing price increases.

Although U.S. rough rice prices have remained relatively unchanged so far, the report says the U.S. rice industry is poised to capitalize on the increased demand. The U.S. is expected to have sufficient production capacity to meet the export demand, particularly in the long-grain rice segment. However, the long-term outlook suggests the U.S. rice industry should prepare for market volatility once the ban is reversed, leading to potential price fluctuations and challenges in the global rice market.

• NWS weather outlook: Heavy rainfall and flash flooding becoming more likely over parts of the Southwest... ...Critical fire conditions expected from the Northwest to the northern High Plains today... ...Dangerous heat redeveloping over the central U.S.

Items in Pro Farmer’s First Thing Today include:

• Grains higher overnight
• India facing record-low August rains
• Cattle on Feed Report out this afternoon
• Wide range for cash cattle trade
• Hog futures correct

— Russia announced it had intercepted and downed a Ukrainian drone over central Moscow. The drone’s impact resulted in damage to a building and debris spread across the city’s commercial hub, causing a temporary interruption in air traffic at civilian airports. Although Ukraine has not admitted involvement, Moscow’s advanced air defense systems have encountered challenges in detecting numerous drones that have managed to evade radar detection in recent times.

— First vessel from Ukrainian port reaches Bosphorus since grain deal ended. A container ship, Joseph Schulte, which set sail from Ukraine’s Odesa port earlier this week, has reached the Istanbul Strait. This is the first vessel to leave Odesa since Russia withdrew from the Black Sea grain deal. Industry experts say the voyage of the Joseph Schulte demonstrates that ships can safely navigate to and from the Black Sea port. The Joseph Schulte used a route that stays close to Ukraine’s shores before reaching Romania’s territorial waters. Ukraine’s coastline is protected by Ukrainian antiship missiles and drones, which have pushed the Russian navy back from its shores and limited Russia’s military options in that part of the Black Sea, military analysts said.

— Romanian Prime Minister Marcel Ciolacu has indicated that his country could potentially accommodate 60% of Ukraine’s grain transit following Russia’s withdrawal from the Black Sea Grain Initiative. Ciolacu expressed the hope that more than half of Ukraine’s grain exports could pass through Romania, and the country is actively working on enhancing its transportation infrastructure encompassing railways, roads, rivers, and seaports. Ciolacu also emphasized that Romania intends to strike a balance between facilitating the transit of Ukrainian grain into international markets and safeguarding the interests of local farmers. Romania, along with four other Eastern European nations, has faced an influx of Ukrainian grain shipments that prompted temporary restrictions. This temporary import ban is set to conclude on September 15, although Ciolacu did not provide any specific remarks about this ban.

— A fleet of ghost ships is playing a crucial role in Russia’s efforts to bypass sanctions and support both its global oil supply and its war in Ukraine. This fleet, which includes hundreds of vessels primarily owned by companies in Greece, India, the United Arab Emirates, and Turkey, has become vital to Russia’s operations, the WSJ reports (link). To avoid Western sanctions, many of these ships operate outside the usual industry norms. A significant number of them are more than two decades old and have undergone multiple ownership changes, giving rise to safety and environmental worries.

— Awaited: EPA announcement of final rule with amendments to the “Revised Definition of Waters of the United States” (WOTUS). The Office of Management and Budget (OMB) has concluded its review of the EPA’s proposed amendments, which were sent to OMB on July 17. Throughout this process, the EPA engaged in 14 meetings with various stakeholders to discuss the final rule. The latest of these meetings occurred on Aug. 14. The forthcoming focus will revolve around the specifics of the modifications that the EPA intends to implement in response to a U.S. Supreme Court decision earlier this year, which impacted certain aspects of the original rule finalized by the EPA in early 2023. It is expected that the new final rule will likely encounter legal challenges once the specifics of the plan are made public.

Of note: Says one Washington insider: “EPA is going to flaunt the law. It will trigger another round of litigation and a high court rebuke.”

— FarmDoc again puts out report on reference prices and base acres. The topics are clearly the biggest ones relative to the Title I safety net discussion in this version of the farm bill. The latest FarmDoc report (link) is, according to its author, Jonathan Coppess, “yet another perspective on the reference price and base acre discussion, using a sample farm thought experiment to dissect policy design differences and issues. Much of the background having been discussed in previous articles….”

Upshot, according to the report: “The thought experiment discussed in this article is, in part, a reminder that on the other end of all public policies are people. Using a sample farm for each state that is of equal size in the program (1,000 total base acres) is an attempt to compare the differential impacts of political decisions in policy design; it is the rare farmer who produces only a single crop, the rare farm with only one type of base acre. When viewed through a state-level sample farm, the policy design inequities are clear and straightforward. High statutory reference prices for peanut and rice base acres result in large payments for farmers and farms with base acres in those crops. Not all base acres were created equal. Only the smallest factional interests reap the most benefits. This reality raises many difficult questions about farm policy and politics; whether Congress perpetuates, reduces, or magnifies the imbalances is among the pressing questions for a 2023 Farm Bill.”

Says one veteran farm policy analyst: “Some observers wear blinders and tend to focus on that which divides rather than unites producers. In contrast, in the case of peanut and rice producers, they do not have the benefit of biofuels incentives, for example, but they rightly support biofuels just the same because it is good for other producers. Similarly, coverage levels and participation in crop insurance for some crops lag compared to insurance for other crops but those for whom coverage lags do not seek to tear down the system for those for whom it does work. Rather, they work to try to improve what they have. These gestures of good will are not without consequence. There is competition for acreage in any area so a crop that is disadvantaged by the whole suite of farm policies, inside and outside of the commodity title and even a farm bill, can suffer. In the case of crops that depend on a unique infrastructure, such as rice or peanuts, this can be especially true. Farmers have much more in common than they have divisions, and that commonality should be nurtured and promoted. Magnanimity is called for in the development and maintenance of farm policy. One thing that could unite producers is to raise reference prices for all crops, narrow deductibles farmers pay for insurance, and RMA using the tools it already has to zealously meet the risk management needs of specialty crop farmers. That is a unifying message all farmers can get behind.”

— China’s Evergrande, a major property company, has filed for Chapter 15 bankruptcy protection in New York. This move enables the company to initiate a restructuring process. There are discussions scheduled in Hong Kong and the Cayman Islands where creditors might vote on the proposed restructuring, potentially happening later this month. In 2021, Evergrande had defaulted on its debts, which triggered a series of defaults across numerous other construction firms. The company reported significant losses of $81 billion spanning the years 2021 and 2022. This situation continues to raise concerns about China’s real estate market and its potential impact on the country’s already challenged economy, particularly in the context of ongoing global economic difficulties.

— Economists cutting China GDP outlook. TEconomists have become increasingly less confident about China’s ability to reach its annual target of 5% gross domestic product growth in recent days. Nomura economists are the latest to cut their forecasts, now predicting 4.6% growth, down from 5.1%. Morgan Stanley, and J.P. Morgan lowered their forecasts, to below 5% this week. Barclays cut to 4.5% from 4.9%.

— Investors are growing concerned about the possibility of a “Lehman moment” occurring in China. This fear, according to a WSJ report (link), has been sparked by a financial products provider, Zhongrong, which managed $108 billion by the end of 2022. This provider is now raising concerns about a potential financial crisis spreading from the troubled real estate sector. Zhongrong, which has extended financing to numerous developers, has encountered issues where four of its trust products recently failed to make payments totaling $14 million to three publicly listed Chinese companies. On social media, individual investors have expressed their dissatisfaction with non-received payments from Zhongrong’s products and products from other branches of its parent company, Zhongzhi Enterprise Group. These investors have reported their concerns to authorities. Both Zhongrong and Zhongzhi Enterprise Group have yet to publicly address these allegations and have not responded to requests for comment.

— The U.S. Commerce Department is expected to conclude that some Chinese manufacturers are illegally dodging tariffs by assembling solar equipment in other Asian countries before shipping it to the U.S. — the culmination of a 17-month probe that could impact tens of billions of dollars in trade.

— Satellites used by French vintners to help determine the best time for harvesting grapes may be key to agriculture weathering the climate crisis and curbing the spread of hunger. The World Economic Forum sees the market for such satellite data nearly doubling by 2030 to almost $1 billion. Link for more via Bloomberg.

— Changes for Argentine ag/trade policy? The shock front-runner in Argentina’s presidential election, libertarian Javier Milei, would strip out state intervention from the giant farming industry to unleash an export boom. The nation is a top global supplier of beef, soybean meal and corn. Free-market devotee Milei vowed to quickly dismantle policies that have held back agricultural investments this century. He would unify foreign exchange rates, scrap export taxes and quotas and remove direct meddling in food prices. “It’s part of our deregulation program,” Milei said in an interview at Bloomberg’s Buenos Aires offices on Wednesday. “Those are all regulations we have to get rid of as quickly as possible.” Link for more.

— Cotton AWP moves higher. The Adjusted World Price (AWP) for cotton is at 71.14 cents per pound, effective today (Aug. 17), up from 70.25 cents per pound the prior week. USDA also announced that Special Import Quota #18 will be established Aug. 24 for 58,062 running bales of upland cotton, applying to supplies purchased not later than Nov. 21 and entered into the U.S. not later than Feb. 19.

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