Congress returns | Employment report | Farmers cut costs | Interest rates | Acreage changes
June 3, 2024
Early morning look at the beginning of the 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).
- Congress returns with the focus on fiscal year (FY) 2025 appropriations measures. Link to The Week Ahead for details of Washington’s agenda.
- Executive order. President Biden is expected on Tuesday to announce an executive order on border issues.
- Oil extended losses after OPEC+ set out a plan to return some barrels back to the market this year. Brent fell toward $80 a barrel after a three-day decline and West Texas Intermediate dropped below $77.
- We’re waiting on final results of elections in India. Exit polls indicate a decisive victory for Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP)-led alliance after the weeks-long general election concluded on Saturday. The polls suggest that the alliance will secure significantly more than the 272 seats needed for a majority in the 543-seat lower house of parliament. Most pollsters predict the alliance will win between 350 and 400 seats, similar to their 2019 victory of 352 seats. Official vote counting will take place on Tuesday.
- Mexico made history by electing the first woman president in the country’s largest election ever. Claudia Sheinbaum, the candidate of the ruling Movement of National Regeneration, known as Morena, won with an estimated 58.3% to 60.7% of the vote, according to a sample of voting stations released by Mexico’s election agency. Her closest rival, Xóchitl Gálvez, the candidate of a coalition of three opposition parties, tallied between 26.6% and 28.6% of the vote. She conceded defeat. Jorge Álvarez Máynez from the center-left Citizen Movement garnered from 9.9% to 10.8% of the vote. Sheinbaum is the former mayor of Mexico City and a political protege of the current popular President Andrés Manuel López Obrador, who known in Mexico as “AMLO.”
- Key U.S. economic report comes Friday with Employment numbers on jobs, the unemployment rate and wages.
- AgriTalk’s free-for-all program on Friday (link) focused on the potential impacts of former President Donald Trump’s verdict, trade policy issues and the latest on farm bill developments. The group noted the recent boost in USDA’s forecast U.S. ag trade deficit to $32 billion and discussed some of the reasons.
- A changing world for trade patterns. Last week a conference “Understanding the New Dynamics of Agri-Food Trade” was sponsored by the International Food Policy Research Institute (IFPRI). The session made clear that agricultural trade is influenced by a myriad of factors, including subsidies, trade policies, geopolitical events, and market dynamics.
- Don’t rule out a House vote on a new farm bill in a lame duck session of Congress following Nov. 5 elections. Another possibility: If Republicans control the White House, House and Senate next year, a new farm bill could be part of a budget reconciliation measure focused on extending the 2017 Trump tax cuts which expire after 2025. Meanwhile, some sources give reasons why Senate Ag Chair Debbie Stabenow (D-Mich.) is not yet releasing text of her Senate farm bill.
- As farmers look to cut costs for 2025, machinery and technology could take the biggest hit. The May Ag Economists’ Monthly Monitor (link) found even with improved commodity prices over the past month, ag economists’ views on the net farm income picture slightly eroded, falling to $110.4 billion in May.
- Grain trader and analyst Richard Crow writes: “The Crop Progress report, including the corn rating, may be the report that gets the most attention [Monday]. The weather has created issues getting the final acreage planted and may bring about some prevented planted acres. If not pp, the switching of acreage to beans from corn.”
- Fed watch: A Barron’s article (link) says the Federal Reserve is unlikely to lower interest rates in 2024 due to persistent inflation, a strong economy, and a resilient labor market.
- Dr. Vince Malanga, president of LaSalle Economics, says that despite public statements, it appears the FOMC is eager to lower its benchmark rate due to concerns about market reactions to fiscal policies and declining commercial real estate values impacting bank balance sheets. He notes the FOMC has already indirectly eased by slowing balance sheet reduction. Markets responded positively to this move, and a reduction in the benchmark rate might be similarly welcomed if justified by economic fundamentals, he adds. Following any rate cuts, Malanga says attention will likely shift to the differing economic policies of presidential candidates, highlighting significant contrasts.
- The IRS on Friday issued some more info about Section 45Z Clean Fuel Production Credit program, focusing on registration. We have details in The Week Ahead (link), but far more important info is yet to come.
- Supply chains are facing disruptions and increased costs due to ships being diverted from the Red Sea, resulting in delays and higher freight rates, according to Bloomberg (link).
- Packaged food maker Campbell Soup is expected to post a rise in third-quarter revenue on Wednesday, helped by steady demand for its pricey ready-to-eat meals and cookies. Investors will look for comments on demand, pricing actions and annual forecasts.
- Sen. Joe Manchin bolted the Democratic Party and is now an independent. Analysts differ are what that means ahead for the bipartisan lawmaker.
- On the election front:
- The Economist: Pro-choice movement could boost Biden’s election chances.
- Poll: One in ten Republicans less likely to vote for Trump after guilty verdict.
- A recent study by Just Facts has found that approximately 10% to 27% of non-citizen adults in the U.S. are illegally registered to vote.
- Roll Call (link) reviews 10 House races to watch in Tuesday’s Primaries.
- The Ohio state legislature approved a bill on Friday allowing President Biden to be included on the state’s ballot, following the DNC’s announcement to nominate Biden virtually to meet Ohio’s ballot deadline.
- Former USDA Undersecretary Dick Crowder passed away. We have a tribute of Crowder in The Week Ahead (link), plus a look at his purposeful career in the private and gov’t sectors.
- Other quick takes:
- Biden unveils Israeli ceasefire proposal, but Israeli Prime Minister Binyamin Netanyahu has committed to continuing the fight until Hamas is completely eradicated.
- Cuts: House GOP appropriators pushing for significant cuts to foreign aid.
- Xinjiang cotton found in 19% of products despite U.S. ban, report finds.
- Despite restrictions, strong demand for U.S. beef in Colombia.
- Beyond Meat, which experienced a meteoric rise when it went public in 2019, is now facing significant challenges.
- Is gain-of-function responsible for the bird flu jump to cows and humans?