First USDA U.S. Corn, Soybean Crop Estimates Aug. 12

Poll: Harris leads Trump in Pa., Mich. and Wis. | Deere earnings Thursday | ERP deadline

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August 10, 2024 01:48 PM

The Week Ahead: Aug. 10, 2024

— Poll: Kamala Harris’ entry shakes up 2024 race, leads Trump in key swing states. According to the latest New York Times/Siena College polls, Harris is leading Donald Trump by four points in each of the key swing states of Pennsylvania, Michigan, and Wisconsin, marking a significant shift from previous polls where Trump was leading both Harris and Biden by one or two points. Harris’ rise has altered the fundamental dynamics of the race, which had previously been driven by Biden’s unpopularity. Harris is now seen as a broadly acceptable candidate, akin to a “generic” Democrat, which has historically polled better than specific candidates. This has restored the usual political dynamic where the election can be framed as a referendum on Trump rather than a choice between two disliked candidates. But in writing about the latest poll numbers (link), Nate Cohn cautions that Harris’ current popularity may be temporary, as she is now subject to greater scrutiny and potential attacks. The article emphasizes that while the polls show a strong surge in support for Harris, this support may not be as solid as it appears, given the public’s previously shifting views of her. The key takeaway is that while Harris has dramatically changed the race, the durability of her lead is uncertain and may face challenges as the campaign progresses.

Another poll, per the Nevada Independent, has Harris up 6 points in that fourth battleground.

— Montana race update. An aggregate of Montana surveys compiled by Decision Desk HQ shows GOP candidate Tim Sheehy outpacing Democrat Jon Tester 49% to 45%. The nonpartisan election handicapper Cook Political Report rates the seat as a “toss-up.” Trump won Montana by 16 percentage points in 2020, and Tester would need to run double digits ahead of Harris in every corner of the state to win, said Kyle Kondik, elections analyst at the University of Virginia Center for Politics. The GOP views Montana, West Virginia and Ohio as the most promising potential Senate pickups. Trump won all three states in 2020. Center for Politics has rated two Senate races in red states as tossups this cycle: Montana and Ohio. Five other battleground states where Democrats are defending Senate seats are rated “lean Democratic”: Arizona, Michigan, Nevada, Pennsylvania and Wisconsin.

— Harris and her running mate Minnesota Gov. Tim Walz held a rally in Arizona, where she criticized Trump on abortion and other issues including border security. “Donald Trump doesn’t want to fix this problem,” Harris said in front of a crowd of more than 15,000 in Glendale, a suburb of Phoenix. “Be clear about that: He has no interest or desire to actually fix the problem. He talks a big game about border security, but he doesn’t walk the walk,” she said, noting Republican lawmakers walked away from a bipartisan border deal at the former president’s urging. Of note: More than 15,000 piled into the Desert Diamond Arena for what some claimed was the largest political rally in Arizona history.

— Harris tested her new message in front of an Arizona crowd by (1) highlighting her record as AG of “border state” California in combating transnational crime; (2) promising to fight for “strong border security”; (3) attacking Trump for killing bipartisan border legislation earlier this year; and (4) promising to sign a similar bill if she became president. A new campaign ad touched on similar themes.

Politico notes that “It’s worth reflecting on the transformation that Harris (and much of the rest of the Democratic Party) has undergone since 2019, when she joined several other presidential hopefuls on a debate stage in agreeing that migrants crossing the U.S. border should not be subject to criminal penalties. Now, Harris’ position is that ‘unauthorized border crossings are illegal,’ according to a campaign statement. And her pledge to sign legislation that would upend U.S. asylum law and make it much easier to deport undocumented immigrants without addressing the status of those already in the country was a major applause line.”

Of note: Harris noted “comprehensive immigration reform that includes … an earned pathway to citizenship.”

Key ahead will be how Harris herself explains her evolution on these topics.

— Battle for the undecided vote. Six weeks ago, Wall Street Journal polling found that 28% of voters were “up for grabs” and not fully committed to any candidate. By late last month, only 15% were up for grabs, a sign that many voters had settled on their choices. Only a minority live in one of the six or so battleground states that will determine the Electoral College outcome. WSJ polling suggests that Trump has advantages among them.

— The rural vote. Trump was able to boost his share of the rural vote from 59% in 2016 to 65% in 2020. The numbers might be even higher this November unless the Democrats make moves to stem the bleeding, writes Tom Zoellner (link). Some Democrats note that around 19% of rural Americans are people of color, from southern farm towns with majority black populations to western towns with substantial Hispanic and Native American influence. “People voting are a lot smarter than the consultants think they are,” said Cody Lonning, whose Rural Urban Bridge Initiative advocacy group hopes to reframe the conversation around solutions. “They look for people they can trust rather than policy detail.”

WASHINGTON FOCUS

Congress is out until Sept. 9 and when they return, they will likely be in session only for around three weeks before leaving again for most of them to campaign in what is expected to be very close House and Senate races to determine who controls the chambers in 2025. Ditto for the presidency.

— First U.S. corn, soybean bean crop estimates from USDA come Monday, Aug. 12. USDA’s Crop Production Report will feature the first survey-based corn and soybean crop estimates, based primarily off farmer responses and satellite imagery, along with the initial cotton crop estimate and updated wheat production. After below-normal temps and above-average rainfall across the Corn Belt during July, USDA is expected to forecast record corn and soybean yields. NASS will also incorporate FSA certified acreage data into its crop estimates.

Of note: While USDA will also update old- and new-crop usage forecasts, the production estimates will be the focal point.

— Deere & Company will report its next quarterly earnings on Aug. 15. The consensus earnings per share (EPS) forecast for this period is $5.73, which represents a significant decrease from last year’s EPS of $10.20 for the same quarter. There has been a notable decline in demand for agricultural machinery, with sales dropping by double digits in the second quarter of 2024. This decline is attributed to high interest rates, weather volatility, and an oversupply of commodities, which have led farmers to delay or reduce their purchases of equipment. Elevated interest rates are making it more expensive for farmers to finance new equipment purchases, leading to reduced demand.

Global agricultural trends: The agricultural sector is experiencing a downturn in multiple regions, with significant declines expected in the U.S. & Canada (large agriculture down ~15%, small agriculture & turf down ~10%), Europe (down ~15%), and South America (tractors & combines down 15-20%).

In response to growing retail inventory levels and softer demand, Deere has decided to strategically underproduce machinery in the latter half of the year. This move aims to balance supply with the reduced demand and avoid excess inventory.

Deere has laid off workers in its Midwest factories to manage production imbalances and reduce costs — Including various rounds of layoffs, Deere has cut nearly 2,000 workers this year, most of whom were employed at production facilities in Iowa and Illinois.

Of note: While the agricultural sector faces challenges, the construction and forestry segments have remained relatively stable. This stability has provided some support to Deere’s overall performance

— Deadline to apply for the 2022 Emergency Relief Program (ERP) is Aug. 14. If you suffered losses from natural disasters in 2022, application must be submitted to the Farm Service Agency (FSA) by this date. Advisors say that even if you qualified for Track 1, also consider applying for Track 2, as legal changes could affect its value in the future. Track 1 uses existing federal crop insurance or NAP data, while Track 2 is revenue-based for those who experienced a revenue drop due to natural disasters. Also: Make sure all required forms are on file with FSA within 60 days of the deadline, with a final submission deadline of Oct. 15, 2024. Link to worksheet and info from Combest-Sell Associates.

OTHER EVENTS & HEARINGS

Monday, Aug. 12
· President Joe Biden is scheduled to return to Washington from Rehoboth Beach, Delaware.
· AI. Tech Conferences LLC TechCon365 Microsoft 365 and Power Platform Conference, including a focus on AI; runs through Friday.
· IRA impact on climate. Elected Officials to Protect America (EOPA) discussion on “the importance of the Inflation Reduction Act to help fight the climate crisis as it reduces our carbon footprint, creates jobs, lifts up Justice40 communities, and helps our energy security.”
· Middle East conflict. Washington Institute for Near East Policy virtual discussion on “On the Brink? The Potential for a Broader Conflict in the Middle East.”
· State laws and federal courts. Federalist Society for Law and Public Policy Studies virtual discussion on “Certification of State-Law Questions by Federal Courts.”
· EXIM meeting. Export-Import Bank (EXIM) virtual meeting for discussion of EXIM policies and programs to provide competitive financing to expand U.S. exports and comments for inclusion in EXIM’s report to Congress on global export credit competition.
· Political polling. Brookings Institution discussion on “Political Polling: Strategies to Overcome Challenges.”

Tuesday, Aug. 13
· Federal Reserve. Atlanta Fed President Raphael Bostic scheduled to speak.
· AI issues. Tech Conferences LLC TechCon365 Microsoft 365 and Power Platform Conference including a discussion on AI for non-AI professionals; runs through Friday.
· AI and gov’t contracting. Slack virtual discussion on “Work Smarter and Faster with Trusted Artificial Intelligence (AI) in Government Contracting.”
· Houthis and the Middle East. Carnegie Endowment for International Peace virtual discussion on “The Houthi Factor: Gaza, the Axis of Resistance, and Middle East Stability.”
· Maritime security issues. Coast Guard meeting of the National Maritime Security Advisory Committee to discuss the committee’s open taskings and notice of proposed rulemaking for cybersecurity in the Marine Transportation System; runs through Wednesday.

Wednesday, Aug. 14
· Shipping challenges. Peterson Institute for International Economics virtual discussion on “Beware of Pirates: Challenges for Shipping Today.”
· Afghanistan and the Taliban. Henry L. Stimson Center virtual discussion on “Afghanistan’s Evolving Terrorism Landscape under the Taliban.”
· Major Questions Doctrine decision. Federalist Society for Law and Public Policy Studies virtual discussion on “West Virginia v. EPA: Two Years Later: Updates on the Major Questions Doctrine?”
· North Korea issues. Center for Strategic and International Studies virtual discussion “Recent Developments in North Korea.”

Thursday, Aug. 15
· President Joe Biden and Vice President Kamala Harris hold an event to discuss the progress they are making to lower costs for Americans. The White House will announce its first round of price-saving Medicare results from negotiations for 10 prescription drugs.
· Federal Reserve. St. Louis Fed President Alberto Musalem, Philadelphia Fed President Patrick Harker scheduled to speak.
· AI and cyberattacks. Tech Conferences LLC TechCon365 Microsoft 365 and Power Platform Conference, including a discussion on “Top Cyberattack Trends You Need to Be Prepared for in 2024 and Beyond"; runs through Friday.
· Federal wages. Office of Personnel Management virtual meeting of the Federal Prevailing Rate Advisory Committee to discuss the determination of prevailing wage rates for the Federal Wage System.
· U.S.-Japan-Korea relations. Hudson Institute discussion on “One Year after Camp David: How Durable Are Trilateral Ties?” — focusing on U.S., Japan and South Korean relations.
· Ransomware issues. National Institute of Standards and Technology virtual discussion on “Ransomware Prevention, Detection, Response, and Recovery.”

Friday, Aug. 16
· Federal Reserve. Chicago Fed President Austan Goolsbee scheduled to speak.
· Tax policy impacts on the U.S. Midwest. House Ways and Means Committee field hearing on “The Success of Pro-Growth, Pro-Worker Tax Policy in the American Midwest.”
· AI issues. Final day of Tech Conferences LLC TechCon365 Microsoft 365 and Power Platform Conference, with a discussion on “How to Avoid AI Disasters: Copilot, Data Security, and Unintended Consequences.”
· Climate issues in cities. China Environment Forum, the Environmental Change and Security Program, and the Indo-Pacific Program at the Wilson Center discussion on “Bringing Climate and Health Together in Japanese and American Cities.”

ECONOMIC REPORTS & EVENTS

Several key U.S. economic reports are scheduled for release this week that could clarify concerns about the U.S. economy’s growth pace and influence expectations for a likely rate cut by the Federal Reserve at the Sept. 17-18 FOMC meeting. The July CPI data (Wednesday) is expected to confirm continued moderation in consumer price inflation, aligning with the Fed’s forecasts and potentially supporting the case for lowering the fed funds rate from its current range of 5.25% to 5.50% The NAHB/Wells Fargo housing market index on Thursday may indicate a stabilization in the housing market due to declining mortgage rates and easing price pressures. Thursday also brings the July Retail Sales report, which is expected to show strong consumer spending, driven by summer sales, Amazon’s record-breaking Prime Day, and a slight uptick in motor vehicle sales.

Monday, Aug. 12

Treasury Budget

Tuesday, Aug. 13

NFIB Small Business Optimism Index
PPI-FD
Federal Reserve. Atlanta Fed President Raphael Bostic scheduled to speak.

Wednesday, Aug. 14

MBA Mortgage Applications
CPI

Thursday, Aug. 15

Jobless Claims
Retail Sales
Import & Export Prices
Business Inventories
Empire State Manufacturing
Philadelphia Fed Manufacturing
Industrial Production
Housing Market Index
Fed Balance Sheet
Money Supply
Federal Reserve. St, Louis Fed President Alberto Musalem, Philadelphia Fed President Patrick Harker are scheduled to speak.

Friday, Aug. 16

Housing Starts
Consumer Sentiment
Federal Reserve. Chicago Fed President Austan Goolsbee scheduled to speak.

KEY USDA & INTERNATIONAL AG & ENERGY REPORTS & EVENTS

USDA’s World Agricultural Supply & Demand Estimates and China’s crop report will be released Monday. Malaysia’s monthly figures for palm oil stockpiles, exports and production are also due.

Monday, Aug 12

Ag reports and events:

Export Inspections
WASDE
Cotton: World Markets and Trade
Grains: World Markets and Trade
Oilseeds: World Markets and Trade
World Agricultural Production
Crop Production
Cotton Ginnings
Crop Progress
China’s monthly CASDE crop supply-demand report
Malaysian Palm Oil Board’s end-July report on stockpiles, production and exports