First Take — After the Weekend Update: July 22, 2024
An early look at the beginning of the coming week including some items on Profarmer.com, AgWeb.com or AgriTalk, or some weekend topics that will be detailed further in the mid-morning Updates or are in The Week Ahead (link).
— Another historic Sunday, with President Joe Biden exiting the presidential race and supporting VP Kamala Harris to replace him. We had two special reports on the topic (Link) and (Link). More info in our midmorning Updates.
— Ag markets last week (Pro Farmer): Funds remain comfortably short — November soybeans fell to their lowest level since February 2021 and wheat posted new contract lows before a modest bounce to finish last week. Corn futures paused just above their July 12 lows. With a favorable near-term weather forecast and limited export demand, there continued to be no major threats to funds’ aggressive net-short stance in the grain and soy markets. Unless a bullish catalyst develops, it’s likely funds will remain comfortable with their record net-short positions. Live cattle futures jumped on reports of steady cash cattle prices in the Southern Plains, but then dropped as prices in the northern market weakened. Lean hog futures rebounded from their recent lows as the cash hog index indicated a short-term bottom.
— AgriTalk’s free-for-all program on Friday (link) had former House Ag Chairman Mike Conaway (R-Tex.) as a guest. He gave his wisdom on the farm bill and other issues.
— Congress returns this week and will focus on:
• Hearings on the Secret Service and the glitches in protecting former President Donald Trump.
• Fiscal Year 2025 appropriations, with House Rules and floor debate on several bills, including USDA funding.
• House floor action on the Water Resources Development Act (WRDA).
• Israel Prime Minister Benjamin Netanyahu on Wednesday will address a joint meeting of Congress.
• U.S. ag sector financial situation is the topic of a House Ag hearing Tuesday. In The Week Ahead (link), we discuss some of the possible issues at the hearing.
— Other topics we discussed in The Week Ahead include:
• House GOP seeks agency details on impact of Chevron Doctrine ruling, particularly the Energy Dept. and EPA.
• A federal appeals panel struck down a challenge by the Coalition for Renewable Natural Gas (RNG Coalition) to new standards set by the Environmental Protection Agency (EPA).
• The White House raised its growth and inflation forecasts for 2024, while projecting significant budget deficits in the coming years.
• U.S. trade official gives update on key issues. Ambassador Doug McKalip, the chief agricultural negotiator in the Office of the U.S. Trade Representative (USTR), spoke at the National Corn Growers Association’s Corn Congress in Washington, D.C. He gave updates on (1) U.S./Mexico corn dispute, (2) Brazilian ethanol tariffs, and (3) Asian trade diversification.
• NPPC praises Massachusetts for clarification on Question 3 impacting ground pork.
• EU to impose anti-dumping duties on Chinese biodiesel imports.
— The financial spotlight this week will be on the second quarter earnings season, which will include many high-profile companies releasing quarterly figures. The economic calendar is relatively light, with the focus on the latest personal income and outlays update for June. That report will contain a reading on the Federal Reserve’s favorite inflation gauge — the core personal consumption expenditures price index.