July 14, 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).
• The person who attempted to assassinate Donald Trump was identified as Thomas Matthew Crooks, a 20-year-old man from Bethel Park, Pennsylvania. Crooks was a registered Republican, though records show that he had donated money to a liberal voter turnout group in 2021. The incident occurred on Saturday, July 13, 2024, during a Trump campaign rally in Butler, Pennsylvania. Crooks fired multiple shots toward the stage from an elevated position outside the rally venue. Trump was injured in the ear but was reported to be “safe” after being escorted off stage with blood on his face. One spectator was killed, and two others were critically injured in the attack. The Secret Service neutralized the shooter, who was killed in the incident. Crooks was armed with an AR-15 semi-automatic rifle and was positioned on the roof of a building around 400 feet north of the stage. In an interview with the BBC (link), a man said he saw somebody with a rifle on a rooftop before the shooting and tried to signal to the Secret Service. This attempted assassination has shocked political leaders worldwide and sparked discussions about security measures for political candidates and the state of political discourse in the United States. Meanwhile, the U.S. House will conduct a “full investigation” of events surrounding the shooting at a Trump rally in Pennsylvania, Speaker Mike Johnson (R-La.) said in a post on X. A hearing will reportedly take place next Monday.
Trump urged Americans on Sunday morning to “stand united” and “defiant in the face of wickedness” just hours after a gunman in Pennsylvania tried to assassinate him. “It was God alone who prevented the unthinkable from happening,” Trump wrote on his Truth Social platform. ”We will FEAR NOT, but instead remain resilient in our Faith and Defiant in the face of Wickedness. Our love goes out to the other victims and their families,” he added. Trump also confirmed he will attend the Republican National Convention in Milwaukee as planned, refusing to change his schedule despite a harrowing act of political violence.
Bloomberg notes that one has to only look back to 2018 for an eerie precedent with Brazil’s Jair Bolsonaro, a political figure who is almost a cookie-cutter Latin American version of Trump. The far-right leader was stabbed in the stomach at a campaign rally a month before elections. It was a defining moment that fired up his base and propelled him to power. In a post on X, Bolsonaro — a staunch Trump supporter — told him “See you on inauguration day.”
Democrats cautioned it’s too early to draw easy conclusions about political implications.
Market impact? There is little precedent for events like those in Pennsylvania. When Reagan was shot four decades ago, the stock market dipped before closing early. The next day, March 31, 1981, the S&P 500 rose over 1%.
Evan Vucci of AP — who took the photo above, and the instantly iconic image of Trump with flag and fist — told CNN’s Kasie Hunt: “I covered Iraq and Afghanistan, so I’ve been in these situations before. ... As a still photographer, I don’t get a second chance.”
• Congress is out this week as the GOP National Convention begins Monday and goes through Thursday, July 18. In The Week Ahead (link), we provide info on the many speakers at the GOP confab, including Arizona rancher Jim Chilton. There will be some adjustments from the original GOP convention plan following the assassination attempt on Donald Trump. An obvious one will be a moment of silence for the person shot dead at the Trump rally, and two other individuals in critical condition. The event is expected to draw some 50,000 people to the city, and security will be on high alert.
• Ag markets last week (Pro Farmer): Lack of bearish report data for corn, beans — USDA’s corn and soybean ending stocks forecasts declined from last month for both 2023-24 and 2024-25. That triggered light corrective buying immediately following the reports, though favorable weather conditions and still-hefty projected ending stocks likely limit the upside near-term. The wheat crop estimate came in higher than anticipated, which kept pressure on that market. The rapidly advancing winter wheat harvest is also adding seasonal hedge pressure to the market. Live cattle faced long liquidation pressure last week as the four-week run of record cash prices came to an end, despite big discounts already built into futures. Lean hog futures slumped to contract lows before a late-week corrective rebound.
• AgriTalk’s free-for-all program on Friday (link) discussed a special report we published last week (link) on the declining response rates for NASS reports. Another topic was the farm bill and its unknown timeline.
• Hamas is pulling out of cease-fire talks, a senior official told AFP, a day after an Israeli air strike on Gaza aimed at killing two top Hamas officials left at least 90 people dead and 300 injured. Political leader Ismail Haniyeh told international mediators Qatar and Egypt that Hamas would halt negotiations due to Israel’s “lack of seriousness, continued policy of procrastination and obstruction, and the ongoing massacres against unarmed civilians,” according to AFP. Separately, a Hamas official told the news service that military chief Mohammed Deif, a target of Saturday’s strike in the Khan Younis area of the central Gaza Strip, was alive.
• Profiting from biofuels is becoming increasingly challenging due to declining prices and uncertain regulations, according to Barron’s. Major companies like Shell, Chevron, and BP are scaling back their biofuel investments, with Shell halting construction on a Dutch plant, Chevron closing two biofuel plants, and BP reducing sustainable fuel projects in the U.S. and Germany. This trend is driven by tougher economic conditions and political uncertainty, particularly ahead of the November presidential election.
The value of credits held by biofuel producers has dropped as supply exceeds demand. Margins for renewable diesel have significantly decreased from around $2.66 per gallon two years ago to just 20 cents per gallon. Most biofuel producers experienced negative operating margins in the first quarter of 2024, with a bleak outlook for the rest of the year due to increased imports from Europe and Asia before U.S. regulatory changes that might reduce subsidies.
The U.S. is currently producing more biodiesel than needed, with output exceeding 5 billion gallons while demand is around 4.5 billion gallons. This overproduction stems from companies ramping up output to capitalize on previously high margins. Despite these challenges, some refiners like Valero Energy, Marathon Petroleum, and Phillips 66 continue to invest in biofuels, achieving strong returns from their operations. Valero, in particular, has been successful by focusing on waste oils with low lifecycle emissions and is now investing in sustainable jet fuel.
Long-term demand for biofuels appears favorable, especially in markets with strong commitments to reducing carbon emissions. However, the industry’s future heavily depends on the outcome of the presidential election. A Democratic victory would likely maintain current subsidies and boost demand and production, while a victory for Donald Trump could lead to a reduction in these incentives, the article speculates. Regulatory bodies are delaying guidance on tax breaks and credits for biofuels, adding to the uncertainty.
Overall, while biofuels are not facing imminent collapse, according to the Barron’s item, which adds their growth is stalled by economic and political factors that need to improve for a more favorable market environment.
• Key events this coming week include:
— Monday: President Joe Biden will be in Texas to commemorate the 60th anniversary of the Civil Rights Act during a visit to the LBJ Presidential Library and then travels to Las Vegas, Nevada, to deliver remarks at the 115th NAACP National Convention on advancing racial justice and equity for all Americans.
Federal Reserve. Fed Chair Jerome Powell participates in a conversation with David M Rubenstein, Chairman of the Economic Club of Washington, DC.
— Tuesday: Spanish olives. International Trade Commission meeting for a commission vote on Inv. Nos. 701-TA-582 and 731-TA-1377, Ripe Olives from Spain.
Chevron decision. American Enterprise Institute for Public Policy Research and the Brookings Institution discussion on “Life After Chevron: How Will Congress and Federal Agencies Adapt?”
— Wednesday: GOP farm committee. GOP Farm Committee, and the Farmers and Ranchers for Trump Coalition, host the 2024 Great American Farm Fair on the sidelines of the Republican National Convention.
Kennedy meets with farmers. Presidential candidate Robert F. Kennedy Jr. discussion with local farmers to “discuss issues impacting the food system in Wisconsin and beyond.”
Apparel trade. United States Fashion Industry Association Washington Trade Symposium. Katherine White, chief textiles and apparel negotiator in the Office of the U.S. Trade Representative, delivers remarks on “The Biden Administration’s Perspectives on Textile Trade Policy.”
— Thursday: Republican National Convention. Final day of the2024 Republican National Convention, with remarks from Former President Donald Trump.
• Economic focus this week: The upcoming Beige Book, scheduled for release at 2 p.m. ET on Wednesday, will offer anecdotal insights into the economic conditions across the 12 Federal Reserve district banks for the period from mid-May to early July. Previous Beige Books have suggested that the U.S. economy has moved away from the threat of a recession and shifted towards slight expansion. However, the upcoming report might show a decrease in this growth due to reduced consumer spending, softened business conditions, and a more uncertain outlook. This report will reflect information gathered before Federal Reserve Chair Jerome Powell’s recent monetary policy testimony and the latest inflation reports, and it will not consider the recent indications of a possible rate cut or the slight uptick in consumer spending observed in early July. Additionally, retail sales data for June, set to be released at 8:30 a.m. ET on Tuesday, is expected to show another weak month for the third quarter. A decline in motor vehicle sales in June could negatively impact overall retail performance. The spotlight will also shift to the second quarter earnings season. Market watchers will receive results from several major names, including Dow 30 components Goldman Sachs, UnitedHealth, Johnson & Johnson and American Express, along with streaming giant Netflix.