The Week Ahead: Dec. 22, 2024
— Holiday schedule adjustments for markets and government operations. The Christmas holiday on Wednesday will alter both market and government operations. Most U.S. financial and commodity markets will close early on Tuesday, Dec. 24, at noon CT or 12:05 p.m. CT. Markets and U.S. gov’t offices will remain closed on Wednesday and will reopen on Thursday. Government data releases will also shift: — WSJ: America’s farm recession is here. One early response is sending billions to farmers. The article (link) says reeling from falling crop prices, farmers and agricultural companies have grappled with diminished income and pulled back spending. As for “sending billions to farmers,” link to our recap of farmer aid that is in the continuing resolution signed Saturday by President Joe Biden. The bill includes $2 billion for livestock losses including those due to wildfire, as well as $3 million to help domestic sugar producers by validating the testing of molasses imports at ports of entry to prevent the import of illegal sugar. The WSJ item concludes: “The farm economy hasn’t gone bust for everyone. Profits are booming for poultry processors like Tyson Foods as their biggest expense — grain used to feed chickens — plummets. Shares in seed and pesticide maker Corteva are up 20% over the past year, helped by the growing popularity of its Enlist-branded crop seeds. Chuck Magro, chief executive of the Indianapolis-based company, said that the farm economy is mixed, with some growers willing to spend more on cutting-edge seeds to boost harvests while prices are low. Even if Trump’s actions spur another trade war, Magro says it is unlikely farmers will cut production.” — President Joe Biden signed the stopgap funding bill into law, extending government funding through March 14. — Trump pressures Panama over canal fees, raises prospect of U.S. reclaiming control. President-elect Donald Trump criticized Panama for “exorbitant” canal transit fees, calling them a “rip-off” in a Truth Social post. He demanded lower fees for U.S. ships or the return of the Panama Canal to American control. Trump’s comments come amid drought-related disruptions to the canal’s operations, which have exacerbated global supply chain issues. The canal, built by the U.S. and ceded to Panama in 1999, faces strategic concerns as China, its second-largest customer, maintains a growing presence in the region. Panama has yet to respond to the remarks. — WSJ on GOP: The past week, Republicans seemed to govern as impulsively as Woody Johnson manages the New York Jets — reacting on whims, consulting unorthodox advisors, and leaving a trail of dysfunction. While Speaker Mike Johnson (R-La.) worked diligently with a fractious majority, Donald Trump, guided by Elon Musk’s erratic social-media advice, derailed a budget bill without a clear backup plan. The fiasco included the defeat of a Trump-endorsed substitute bill and mockery over “President Musk” from Democrats. The episode underscores challenges for Trump’s upcoming term, revealing a reliance on social-media pressure and impulsive decision-making rather than persuasion and practical governance. The GOP must adapt quickly, or risk further disarray in 2025. |
| WASHINGTON FOCUS |
With the 118th Congress coming to an end (a new type of thanksgiving), the newly elected and returning members will convene on Jan. 3, marking the start of the 119th Congress.
Their first task? Electing a speaker. Republicans will face this challenge with a slimmer majority than before, amid lingering frustration over recent events. While a prolonged Speaker election remains a possibility, the need to begin legislative work often encourages swift resolution.
The Senate early in 2025 is set to start hearings and confirm appointees for President-elect Donald Trump, some of whom may face significant controversy. Simultaneously, Congress will focus on crafting party-line reconciliation legislation. This aims to fund Trump’s border and energy initiatives, extend his 2017 tax cuts, and implement additional tax reforms. However, the process is contentious, with disagreements among congressional Republicans over the structure and prioritization of the tax plan.
Meanwhile, House Ag Chairman GT Thompson (R-Pa.) said he wants to get a new farm bill completed in the first quarter. With the Senate Ag Chair being led by Sen. John Boozman (R-Ark.) rather than the retiring Sen. Debbie Stabenow (D-Mich), that at least makes Thompson’s goal possible, with most observers thinking it will take longer.
— The fiscal GOP hawks in the House who defied Trump. A faction of 38 House Republicans, primarily fiscal conservatives with strongholds in Republican-dominated districts, defied President-elect Donald Trump by rejecting his proposed spending deal. A New York Times article (link), notes that these lawmakers, including notable figures like Rep. Thomas Massie of Kentucky, have long resisted debt ceiling increases and spending agreements, citing their commitment to limited government. Massie, dubbed “Mr. No” for his staunch opposition to spending bills, exemplifies the resilience of these representatives. Despite enduring Trump’s ire during a previous dispute, he has consistently won re-election. Similarly, Reps. Andy Biggs, Andrew Clyde, and Chip Roy have leveraged their local popularity to defy Trump’s fiscal demands while maintaining loyalty in other areas, such as showing public support during his legal battles.
The consequences of this rebellion remain unclear, with Trump and other GOP leaders condemning the dissenters. Rep. Roy, a vocal critic of federal overspending, defended his stance despite Trump branding him an obstructionist. Roy’s principled stand drew support from former Vice President Mike Pence, who praised his commitment to conservative values.
Bottom line: The clash underscores the limits of Trump’s influence over fiscal policy in a party increasingly divided over government spending. And this will make coming GOP action on at least one if not two budget reconciliation measures in 2025 more difficult than most believe.
— Social Security Fairness Act (HR 82) passed the Senate Saturday night, 76-20. This bill will increase Social Security benefits for about 3 million people.
| ECONOMIC REPORTS & EVENTS |
A quiet week for economic reports, with Consumer Confidence on Monday and New Home Sales on Tuesday.
Monday, Dec. 23
· Chicago Fed National Activity Index
· Consumer Confidence
Tuesday, Dec. 24
Wednesday, Dec. 25
· Holiday
Thursday, Dec. 26
- Jobless Claims
- Fed Balance Sheet
- Money Supply
Friday, Dec. 27
- International Trade in Goods
- Wholesale Inventories
| KEY USDA & INTERNATIONAL AG & ENERGY REPORTS & EVENTS |
Ag focus: On Monday, USDA releases grain and soy export inspection data and U.S. cold storage info for beef, pork, and poultry. The United Nations will release its monthly food price index on Jan. 3.
Energy sector: Key energy reports are delayed until Friday.
Monday, Dec. 23
Ag reports and events:
• Export Inspections
• Cold Storage
• Hogs and Pigs
• Poultry Slaughter
• Brazil’s Unica to publish cane crush, sugar production (tentative)
Energy reports and events:
- North Sea Forties loading program (February)
- Brent February options expire
- Holiday: Azerbaijan
Tuesday, Dec. 24
Ag reports and events:
Energy reports and events:
- API US inventory report
- Cercle de Giverny conference on energy transition, Paris
Wednesday, Dec. 25
Ag reports and events:
- Holiday: U.S.
- For the first time in nearly 20 years, the first day of Hanukkah falls on Christmas Day.
Thursday, Dec. 26
Ag reports and events:
• Broiler Hatchery
Energy reports and events:
- Singapore onshore oil product stockpile weekly data
- Holiday: Christmas Day/Boxing Day observed in multiple countries like Australia, UK and Canada. First day of Kwanzaa, a seven-day non-religious holiday observed in the U.S. to honor African Americans’ ancestral roots.
Friday, Dec. 27
Ag reports and events:
- CFTC Commitments of Traders report
- Export Sales
- Peanut Stocks and Processing
- Peanut Prices
Energy reports and events:
- Genscape weekly crude inventory report
- EIA Petroleum Status Report
- Weekly Ethanol Production
- EIA Natural Gas Report
- ICE weekly Commitments of Traders report for Brent, gasoil (delayed until Monday)
- Baker-Hughes Rig Count
| KEY LINKS |
WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |