Global Outlook ‘Looking Quite Grim’: WTO Chief

Waiting on OPEC+ decision on production cuts

The OPEC+ coalition meets to consider an output cut of as much as 2 million barrels a day, double what was previously anticipated. Ahead of the decision, White House press secretary Jean-Pierre said the administration is not considering any new releases from the SPR.

Vladimir Putin, Russia’s president, ratified the annexation of four Ukrainian regions under Russian law, even as Ukrainian forces continue to retake territory.

EU agrees to Russian oil price cap in new sanctions package. The agreement on the price cap contains measures to soften the impact of the sanctions on EU member states with large shipping industries. The sanctions also extend import bans on goods such as steel products, wood pulp, paper, machinery and appliances, chemicals, plastic, and cigarettes.

Treasury Secretary Janet Yellen said Tuesday that “there is no truth” to reporting that she may be headed for the exits relatively soon.

USDA is releasing aid for farm, meatpacking workers. Details in Policy section.

Public debt outstanding in the U.S. has surpassed $31 trillion for the first time ever, Treasury department data published Tuesday (Oct. 4) show. A trillion dollars of debt was added just in the last eight months, and it’s close to reaching the $31.4 trillion debt ceiling Congress imposed on borrowing until early 2023. Economists worry that the growing debt load will become too expensive to service over time.

World trade in goods is set to slow more sharply than previously expected next year, a new forecast shows. Exports and imports should increase by just 1% in 2023, down from a previous forecast of 3.4%, the World Trade Organization (WTO) said today.

U.S. trade gap lowest in 15 months. The trade deficit in the U.S. narrowed to $67.4 billion in August of 2022, the lowest since May last year, and slightly below market forecasts of a $67.7 billion gap. It reflected a decrease in the goods deficit of $3.4 billion to $87.6 billion and a decrease in the services surplus of $0.4 billion to $20.2 billion. Imports declined 1.1% to $326.3 billion, led by falls in crude and fuel oil, semiconductors, civilian aircrafts and computers. Meanwhile, purchases rose for passenger cars, travel and charges for use of intellectual property. Exports fell at a much slower 0.3% to $258.9 billion, with main decreases seen for nonmonetary gold, crude oil, passenger cars and travel, while shipments of natural gas, pharmaceutical preparations and financial services went up.

The American League has a new single-season home run champion. Aaron Judge hit his 62nd dinger of the season Tuesday night in Texas, putting him atop fellow New York Yankees Roger Maris (61 in 1961) and Babe Ruth (60 in 1927).

Election Day 2022 is 34 days away. Election Day 2024 is 762 days away.

Equities today: Global stock markets were mixed overnight, with European shares mostly weaker and Asian shares mostly firmer. U.S. stock indexes are pointed to lower openings. Stock futures are down roughly 1% this morning as investors digest the sizeable week-to-date gains amid rebounds in Treasury yields and the dollar. Asian stock markets climbed significantly on Wednesday reflecting a global rally based on hopes that central banks might soon become less aggressive about raising interest rates. Hong Kong’s Hang Seng Index rose by more than 5%, having been closed for a public holiday the day before. New Zealand’s central bank, however, bumped rates to a seven-year high. The central bank raised its benchmark interest rate to 3.5%, citing inflation remaining too high and labor remained scarce. This marked the fifth one-half-percentage-point hike in a row. In Asia, Japan +0.48%. Hong Kong +5.90%. China closed. India closed. In Europe, at midday, London -1.20%. Paris -0.79%. Frankfurt -0.69%.

U.S. equities yesterday: The Dow shot up 825.43 points, 2.80%, at 30,316.32. The Nasdaq rose 360.97 points, 3.34%, at 11,176,41. The S&P 500 gained 112.50 points, 3.06%, at 3,790.93. After Tuesday’s surge in U.S. equities, all of the major averages are now each about 5% above their lows of the year. Tuesday’s gains also put the S&P 500 up 5.7% for the week and on track for its biggest two-day rally since March 2020. Reasons for the equity surges. One came from the Reserve Bank of Australia, which issued a lower-than-expected rate hike. The other was Tuesday morning’s Job Openings and Labor Turnover Survey (JOLTS) that showed job openings in the U.S. declined by 10% in August while layoffs edged higher. Both raised hopes that the streak of aggressive Fed rate hikes could end sooner rather than later. Meanwhile, companies start reporting third quarter earnings in earnest next week.

Dollar index falls back to 110. One factor helping equity markets on Tuesday was a slightly weaker dollar, which is fell for the fifth-straight day. The U.S. Dollar Index was down 1.5% in afternoon trading at 110.06. The index was trading as high as 114.78 last week, when there was concern about a failure of the U.K. government bond market. But the greenback is higher today.

Twitter shares Tuesday closed higher by 22%, after Elon Musk revived his deal to buy the social media giant at the original price offered in April.

Agriculture markets yesterday:

• Corn: December corn rose 2 1/4 cents to $6.83, the highest close since Sept. 22.
• Soy complex: November soybeans rose 9 1/2 cents to $13.83 1/2. December soymeal fell $3.80 to $401.5. December soyoil gained 168 points at 65.02 cents.
• Wheat: December SRW wheat fell 9 cents to $9.03 after rising earlier in the session to $9.27. December HRW wheat ended unchanged at $9.88 3/4. December Spring wheat fell 3 3/4 cents to $9.76 1/4.
• Cotton: December cotton futures rose the 400-point initial daily trading limit to 88.20, the highest close since Sept. 28.
• Cattle: December live cattle fell 52.5 cents to $147.50. November feeder cattle dropped 85 cents to $175.20.
• Hogs: December lean hog futures plunged $3.30 to $74.425, the contract’s lowest closing price since Dec. 9.
  

Ag markets today: Corn and soybean futures pulled back from gains earlier this week, while wheat futures extended this week’s declines. As of 7:30 a.m. ET, corn futures were trading mostly 4 cents lower, soybeans were 8 to 11 cents lower and wheat futures were 4 to 7 cents lower. Front-month crude oil futures were modestly weaker and the U.S. dollar index was around 775 points higher.

Technical viewpoints from Jim Wyckoff:

On tap today:

• ADP’S employment report is expected to show that the U.S. private sector added 200,000 jobs in September. (8:15 a.m. ET) UPDATE: Private businesses in the U.S. created 208,000 jobs in September of 2022 compared to an upwardly revised 185,000 in August, as schools reopened, and pandemic concerns receded. Figures came slightly above market forecasts of 200,000. But while job growth is stable, it remains below the recent three-month average. The services-providing sector created 237,000 jobs, led by trade/transportation/utilities (147,000); professional/business (57,000); education/health (38,000); and leisure/hospitality (31,000). In contrast, the goods sector shed 29,000 jobs. “There are signs that people are returning to the labor market. We’re in an interim period where we’re going to continue to see steady job gains. Employer demand remains robust and the supply of workers is improving-for now,” Nela Richardson, chief economist, ADP, said. Meanwhile, annual pay was up 7.8% year-over-year.
• U.S. trade deficit is expected to narrow to $67.7 billion in August from $70.65 billion one month earlier. (8:30 a.m. ET) UPDATE: Exports from the U.S. went down by $0.7 billion from the previous month to $258.9 billion in August of 2022, the first decrease in exports this year. Sales of goods decreased by $0.7 billion to $182.5 billion in August, especially nonmonetary gold (down by $2.0 billion) and crude oil (down by $1.0 billion). Meanwhile, exports of automotive vehicles, parts, and engines decreased by $1.1 billion while those of consumer goods increased by $1.3 billion. Exports of services decreased by less than $0.1 billion to $76.4 billion. Imports to the U.S. fell by $3.7 billion from a month earlier to $326.3 in August of 2022, the third consecutive monthly drop. Imports of goods decreased by $4.1 billion to $270.1 billion, mainly crude oil (down by $2.7 billion) and capital goods (down $1.1 billion). On the other hand, purchases of automotive vehicles, parts, and engines increased by $1.1 billion. Also, imports of services increased by $0.4 billion to $56.2 billion, particularly travel (up $0.3 billion).
• S&P Global’s U.S. services index for September is expected to hold steady at 49.2 in September, unchanged from a preliminary reading. (9:45 a.m. ET)
• Institute for Supply Management’s services index is expected to fall to 56 in September from 56.9 one month earlier. (10 a.m. ET)
• Federal Reserve Bank of Atlanta President Raphael Bostic speaks on inflation at 4 p.m. ET.
• U.S. Secretary of State Antony Blinken has embarked on a five-day-long tour to three Latin American countries—Colombia, Chile, and Peru — in a bid to strengthen ties with the countries’ left-wing presidents. Discussions over drug trafficking, migration, and economic issues are expected to dominate the agenda.

U.S. national debt tops $31 trillion for first time. That is one record you don’t want to beat. Higher rates could add $1 trillion more to what the federal government spends on interest payments this decade, according to Peterson Foundation estimates… above the record $8.1 trillion in debt costs that the Congressional Budget Office (CBO) projected in May. The level is close to reaching the $31.4 trillion debt ceiling Congress imposed on borrowing until early 2023. Link to more via the New York Times.

What if: Expenditures on interest could exceed what the U.S. spends on national defense by 2029, if interest rates on public debt rise to be just one percentage point higher than what the CBO estimated over the next few years.

Global CEOs expect a brief recession. Business leaders worldwide expect a recession to hit the global economy within the next 12 months, according to new survey findings from KMPG. Many of them project it to be a “mild and short” slowdown, and they see more growth prospects emerging soon, however. “CEOs worldwide are displaying greater confidence, grit and tenacity in riding out the short-term economic impacts to their businesses as seen in their rising confidence in the global economy and their optimism over a three-year horizon,” said Ong Pang Thye, a managing partner for KPMG Singapore.

Sharp slowdown in global trade points to a possible recession and lower inflation. World trade in goods is set to slow more sharply than previously expected next year, a new forecast shows. Exports and imports should increase by just 1% in 2023, down from a previous forecast of 3.4%, the World Trade Organization (WTO) said today. “We’re looking at a situation in which a global slowdown is going to squeeze households even more, squeeze businesses and we may be edging into a recession,” WTO Director-General Ngozi Okonjo-Iweala said in an interview with Bloomberg Television. “It’s looking quite grim — a little more grim than we had thought.” Besides the economic risks facing the U.S. and Europe, the WTO said poor nations stand to suffer, too. “The growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress in developing countries,” it said.

Among the other potential drags: central banks raising interest rates too high or acting too late on inflationary pressures that “may have peaked,” the WTO said. “Overshooting on tightening could trigger recessions in some countries, which would weigh on imports,” it said. “Alternatively, central banks might not do enough to bring inflation down, possibly necessitating stronger interventions in the future.” The WTO acknowledged the tradeoffs governments are grappling with to bring soaring prices down.

Measures of global trade flows have been volatile over recent months, partly because of a cycle of Covid-19 lockdowns and reopenings in China that have affected the availability of goods for transport to consumers. The WTO said trade flows should rise by 3.5% this year, faster than the 3% previously forecast but down sharply from 9.7% in 2021. In a positive sign for the economy, the slowdown in trade flows looks like it is leading to a decline in freight charges that should help cool global inflation rates. Link to WSJ article for more.

The WTO also said:

• Risks to the forecast remain “numerous,” including an escalation of the Russia-Ukraine war, and an “under-appreciated risk” of a decoupling of the US and China.
• The Ukraine war increased prices for energy by 78% and food by 15% in August versus the same period a year prior.
• Container throughput improved this year as port congestion and supply disruptions in the US and China eased. The RWI/ISL index suggests “continued stagnation in merchandise trade.”
  

Micron plans to build a chip factory in New York. The semiconductor maker will invest up to $100 billion on a new campus, which it says will be the biggest chip fabrication facility in the U.S. It’s the latest chip giant to pledge new manufacturing plants in the country.

Market perspectives:

• Outside markets: The U.S. dollar index is solidly higher — the index jumped almost 1% to 111 on Wednesday, following a 1.5% loss the day before which was its biggest one-day drop in more than two years. Meantime, the yield on the 10-year U.S. Treasury note is falling and presently fetching 3.691%. Crude prices were slightly higher as traders awaited the OPEC+ decision on output, with U.S. crude around $86.50 per barrel and Brent nearly $92 per barrel. Gold and silver futures were under pressure, with gold around $1,713 per troy ounce and silver just over $20 per troy ounce.

• OPEC+ is set to meet in Vienna in person for the first time in more than two years. The 23-nation alliance is considering its biggest oil production cut since 2020 as it tries to stabilize oil prices. A large cut risks adding another shock to the global economy, which is already battling inflation driven by high energy costs. The potential move is already sparking pushback from the U.S., with officials trying to head off the decision with furious diplomatic efforts. Oil prices lurched higher amid reports that OPEC+ could cut production by more than initially anticipated.

According to the latest reports on OPEC+, the extended cartel is considering a production cut as deep as 2 million barrels daily. “It is hard to overstate how anxious the Biden administration is about a potential resurgence in oil prices,” Bob McNally, of Rapidan Energy, told Bloomberg ahead of the OPEC+ meeting. “A large OPEC+ cut would antagonize the White House though officials may wait to see how prices respond afterward before pulling the trigger on policy responses.”

CNN reports that some of the talking points drafted in a state of urgency by the White House had suggested the OPEC+ production cut is viewed as “a hostile act.” Reports note that Treasury Secretary Janet Yellen’s talking points would focus on potential reputational damage in the West for the Gulf OPEC members that support the cut. “There is great political risk to your reputation and relations with the United States and the west if you move forward,” CNN cited a talking points draft as saying. The main argument that is being put forward in the lobbying effort, however, is the one about the adverse effect tighter oil supply would have on the global economy right now.

Ahead of the decision, White House press secretary Jean-Pierre said the administration is not considering any new releases from the SPR.

The Energy Department will investigate the impacts of a possible fuel export ban as worries mount over the political threat of higher gasoline prices ahead of the midterm elections, according to people familiar with the discussions, although the proposal does not have the backing of industry groups. In a letter to Energy Secretary Jennifer Granholm, the American Petroleum Institute and American Fuel and Petrochemical Manufacturers pointed out that a ban “would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war.”

• Gold broke above the $1,700 an ounce mark, a level not seen in three weeks, as investors hoped that the Federal Reserve could adopt a less aggressive path to rate hikes amid a deteriorating outlook for growth. The number of open jobs in the US economy dropped the most in nearly 2-1/2 years in August, while layoffs rose slightly, in the latest sign that the labor market is starting to cool. This follows data of U.S. manufacturing from ISM showing activity declined to the lowest since May 2020. The market is talking, some say, via easing Treasury yields and a weaker dollar, which, in turn, lent further optimism to gold bulls.

• After a summer of improvement, gas prices are getting steeper again — and the White House is warning the oil industry that it could take “extraordinary” measures to rein them in, the WaPo’s reports. Democrats also want to blame big corporations politically for high prices, which have now hit $6.38 per gallon in California and are particularly acute in the West. “The most potent policy option the White House has is emergency authority to limit exports to other nations, a strategy that would be targeted at boosting inventories at home but which could destabilize global markets and exacerbate the energy crunch.” Reuters reported earlier this week that the White House has ruled out banning natural gas exports. The Biden administration is still examining limits on gasoline exports, according to reports.

• Average cost of U.S. home heating is expected to surge to $1,202 this winter, according to a recent report (link) by the National Energy Assistance Directors’ Association, or NEADA. That’s more than a 17% spike in energy costs compared to last year (costing about $177 more on average and reaching the highest cost in more than a decade). NEADA estimates that American households will pay $22 billion more in heating costs this winter than in the 2021-2022 season. This will worsen an existing crisis for millions of Americans who already could not afford to pay their utility bills. As of early September, more than 20 million U.S households were behind on their utility bills, NEADA said — owing a combined $16 billion in power bill debt. NEADA executive director Mark Wolfe said he views the number of Americans with unpaid utility bills as a “canary in the coalmine” indicating the overall economic health of lower-income households.

Where you live will dictate how much your heating bills will increase.

• For families that use natural gas for heating — roughly half of U.S. households — costs are expected to rise $243, up 34%, with bills hitting $952 on average, up a whopping 66% versus the 2020-21 winter, NEADA said. (Some power companies that are more reliant on natural gas, primarily in the northeast, are warning of an increase of as high as 60%.)
• Households that use heating oil may see costs rise $239, up 13%, to $2,115 on average.
• Propane-heated households could pay $241 more, up 15%, to $1,828 on average.
• Homes that get their heat from the electrical grid could see a more modest cost increase: up $86, or 7%, to $1,328.

It will be even worse in Europe. U.K. residents are expected to see an 80% spike in their energy bills this October, while natural gas heating is projected to cost 67% more in Germany, and there are concerns of shortages across the continent as key gas supplies from Russian have dwindled.

• StoneX lowers corn, soybean production forecasts. StoneX raised its corn yield estimate by 0.7 bu. from last month to 173.9 bu. per acre, but cut its production forecast 112 million bu. to 14.056 billion bushels. The brokerage firm cut its soybean yield estimate by 0.5 bu. to 51.3 bu. per acre and lowered its production forecast 73 million bu. from last month to 4.442 billion bushels.

• Farmers in the Imperial Valley of California draw more water annually from the Colorado River than the states of Arizona and Nevada combined, so they are in the center of talks to reduce water usage throughout the river basin. Link for details.

• Residents of one of Florida’s barrier islands will be allowed to return to view their homes today for the first time since Hurricane Ian devastated the state last week. Meanwhile, President Biden and first lady Jill Biden are scheduled to visit Florida today to see the destruction firsthand. Update: Hurricane Ian hit as many as 375,000 acres of citrus, 200,000 acres of vegetables, 180,000 acres of hay and 95,000 acres of sugarcane, cotton, peanuts and other field crops, with reports of significant losses of citrus fruit. Link for more.

• NWS weather: Rain finally begins to subside for the Mid-Atlantic but lingers in southern New England through Wednesday... ...Drastic change begins for the Northern Plains and Upper Mississippi Valley as strong cold front begins pushing southward late Wednesday... ...Daily showers and thunderstorms continue for the Southern Rockies and High Plains, with isolated instances of flash flooding possible... ...Pleasant weather across much of the West through the end of the week.

Items in Pro Farmer’s First Thing Today include:

• Weaker price tone overnight
• Taiwan official: China has ‘destroyed’ tacit agreement on Taiwan Strait (details in China section)
• Another day of strong gains in Choice beef
• Ugly price action for hogs

— Summary: Putin signs laws annexing four Ukrainian regions. Earlier this week, both houses of the Russian parliament ratified treaties making the Donetsk, Luhansk, Kherson and Zaporizhzhia regions part of Russia. Ukrainian forces have driven back Russian troops in three partially occupied Ukrainian territories. Ukrainian forces are moving closer to the Luhansk region, one of the four areas of Ukraine that Russia claimed to annex in recent days, and Russian leaders are likely worried, according to the U.K. Defense Ministry. The moves make it increasingly likely that Ukraine’s military can strike an important road with artillery, the ministry added, noting that it would further strain “Russia’s ability to resupply its units in the east.” In recent weeks, Kyiv has recaptured large swaths of territory while nearly 200,000 Russians have fled to bordering nations to escape Putin’s conscription order. “Russia isn’t winning. Putin’s great nationalist celebration of conquests is turning out to be a debacle,” said Daniel Fried, a fellow at the Atlantic Council and a former U.S. ambassador to Poland.

• Sachs: U.S. sabotaged Nord Stream pipelines; gets pushback. Columbia economist Jeffrey Sachs raised eyebrows for speculating that the U.S. is responsible for sabotaging the Nord Stream pipelines, citing “radar evidence” of U.S. helicopters in the area and previous comments from top American officials about the pipeline. “I know it runs counter to our narrative, you’re not allowed to say these things in the West, but the fact of the matter is all over the world when I talk to people, they think the U.S. did it,” Sachs said on Bloomberg TV. Sachs, who advised former Soviet countries in transitioning from communism, received pushback on the air and on social media.
• Video shared online of a train in Russia carrying equipment belonging to a Russian military unit that handles nuclear weapons should be taken as a message to the West, a military analyst says. The video, which a U.S. official told CBS News could not be independently confirmed, shows an armored personnel carrier with a cannon attached, as well as another vehicle belonging to the unit, being transported on the train, the analyst said. “Such videos are never released by chance. I’m 100% sure that there was a purpose behind posting or releasing such a video,” Konrad Muzyka, an aerospace and defense consultant focused on Russia and Belarus, told CBS News. Muzyka said that it was highly unusual to see a video of that particular Russian unit, the 12th main directorate of the Russian Ministry of Defense, on the internet.
• The EU agreed to a price cap on Russian oil as part of a new sanctions package to punish Putin for his nuclear threats and illegal land grab in Ukraine. The bloc has tried to reduce its reliance on Russian energy since the invasion began, but member states with large shipping industries had been anxious about the costs of an oil price cap to their economies.

Meanwhile, the Group-of-Seven industrialized economies are within weeks of announcing a formal cap on the price of Russian oil, according to Ben Harris, the U.S. Treasury’s assistant secretary for economic policy. The step will be announced “substantially before Dec. 5,” Harris said. That’s the date when aggressive European Union sanctions on Russian oil exports are due to enter into force.

The Financial Times reports (link): “The U.S. Treasury has estimated the G7’s plan to cap the price of Russian oil exports could yield $160 billion in annual savings for the 50 largest emerging markets, as Washington insists the scheme it has championed will keep a lid on energy costs around the world. The analysis was developed ahead of the IMF and World Bank’s annual meetings next week, where high energy costs triggered by Russia’s invasion of Ukraine will take center stage as one of the heaviest burdens on the global economy.”

• Ukraine in grain talks to ensure exports past next month. Ukraine is holding tough talks to ensure grain continues flowing from its Black Sea ports even after a deal on such exports expires next month, a key adviser said. “We hope for a prolongation of the mandate to bring grain out of Ukraine’s ports,” Mykhailo Podolyak, an adviser to the Ukrainian president’s chief of staff said, said in a Bloomberg TV interview on Tuesday. He declined to elaborate on when any results can be expected, describing the talks as “complicated.” Ukraine doesn’t negotiate with Russia directly, according to Podolyak. Instead, there are sub-negotiating groups that also include Turkey and the United Nations.

— The application for President Joe Biden’s student loan forgiveness plan is expected to go live as soon as this week. Ongoing legal challenges and lawsuits aiming to block the plan are creating a few hurdles for the administration.

— USDA releasing aid for farm, meatpacking workers. USDA announced (link) that 15 groups will get $670 million in funds to farm and meatpacking workers that were negatively impacted during the pandemic, incurring expenses via the outbreak as they were deemed essential workers. The funds would amount to $600 per person and start in the fall, USDA said. $20 million was also earmarked for a pilot program that would recognize the efforts of grocery workers. The aim is to defray some of the costs incurred by workers relative to personal protective equipment, child care, and expenses for testing and quarantining. “Please note that payments are not yet available and each organization may have application periods that begin at different times,” said USDA’s Agricultural Marketing Service.

The largest grant, $141.7 million, was awarded to UFCW Charity Foundation to assist farm, grocery and meatpacking workers. The UFW Foundation received $97.8 million, the second-largest grant, followed by $57.4 million to National Migrant and Seasonal Head Start Association.

— Senate Ag Committee leaders call for expansion of margin protection tools. Senate Ag Committee Chair Debbie Stabenow (D-Mich.) and ranking member John Boozman (R-Ark.) are urging USDA to accelerate the expansion of margin protection tools to help more producers address the increased risk associated with elevated production costs such as fuel and fertilizers. In a letter (link) to USDA Secretary Tom Vilsack, and Marcia Bunger, Administrator of USDA’s Risk Management Agency (RMA), the senators ask for expansion of options beyond those currently only available to dairy, cattle, swine, rice, soybeans, corn and wheat so that producers of additional commodities can proactively manage risk. The senators also call on RMA to increase risk management education for both producers and agents. “Many farmers are underway in their planning for fall fertilizer applications. Prioritizing the thoughtful and timely expansion of margin protection plans of insurance for additional commodities, as well as related insurance products designed for specialty crops, would allow producers the opportunity to familiarize themselves with these tools and better manage production cost risks by next fall,” the senators wrote.

— Treasury Secretary Janet Yellen said Tuesday that “there is no truth” to reporting that she may be headed for the exits relatively soon, per the New York Times.

— China has again banned residents from leaving Xinjiang over a Covid-19 outbreak — just weeks after the far-western region began relaxing restrictions from a stringent extended lockdown, fueling public frustration among those fretting over food shortages and plunging incomes. On Tuesday, the region — home to 22 million people, many belonging to ethnic minorities — reported 38 new asymptomatic Covid cases. Since July 30, Xinjiang has reported a total of 5,790 infections. Xinjiang vice-chairman says failures include low testing capacity and lack of professionalism among staff who mishandled samples and became infected.

— Attaché forecasts smaller China corn crop. USDA’s ag attaché in Beijing estimates China’s corn crop at 270 MMT, 4 MMT lower than USDA’s official forecast and 2.5 MMT lower than last year’s crop. The attaché cited reduced planted area and yield losses caused by excessive rains in the major production area of northeast China.

— Taiwan official: China has ‘destroyed’ tacit agreement on Taiwan Strait. China has destroyed a tacit agreement on military movements in the Taiwan Strait by crossing an unofficial “median line” running down the waterway, Taiwan Defense Minister Chiu Kuo-cheng said. Chiu told Taiwan’s parliament Taiwan would react if China crossed its “red line” without saying what that was, though he suggested it included Chinese aircraft, including drones, flying into Taiwan’s territory.

— The other side of the Proposition 12 issue. Link

— Summary:

• Global Covid-19 cases at 612,236,461 with 6,550,318 deaths.
• U.S. case count is at 96,481,737 with 1,060,428 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 619,765,972 doses administered, 268,373,101 have received at least one vaccine, or 81.45% of the U.S. population.
  

— EU mulls Iran sanctions. The European Union is considering imposing sanctions on Iran in response to its harsh crackdown on mass protests, just a day after U.S. President Joe Biden also vowed to inflict “further costs” on complicit Iranian officials. Human rights organizations estimate that as many as 130 people have died since the demonstrations first began.

— In a major reversal, Elon Musk is now proposing to buy Twitter at full price after attempting to terminate the $44 billion acquisition agreement, which the company had sued him to complete. According to a securities filing on Tuesday, Musk said he would follow through with the deal at the originally agreed-upon price of $54.20 per share. Musk said buying Twitter will speed up the creation of something he called “X, the everything app,” referring to his previous idea for creating something of a Twitter rival using his currently inactive X.com Internet domain. After a long news-pending halt, Twitter shares closed up 22% on Tuesday at $52.

— Judge hits 62 home run. Aaron Judge led off Game 2 of the Yankees’ split doubleheader Tuesday against the Rangers with his 62nd homer of the season, breaking Roger Maris’ 61-year-old record in a 3-2 loss. “And given the performance-enhancing-drug ties to everyone who’s hit more homers than Judge, many will consider him the legitimate home run champ,” the New York Post wrote. The 391-foot blast came on a 1-1 pitch from right-hander Jesus Tinoco. It also came in Game 161 for the Yankees. Link to everyone of Judge’s home runs.

— Twelve plump brown bears will be competing for the title of Fattest Bear™ as Fat Bear Week kicks off today. In the competition—which showcases how bears from Alaska’s Katmai National Park and Preserve are bulking up for hibernation — fans can vote for their favorite contender based on their perceived size (the bears are not actually weighed), life history, and other personal challenges. Reports note that some of the competitors are seasoned veterans: one bear, named 480 Otis, has won four times, the Washington Post reported (link) and (link). Other frontrunners include 435 Holly — whom Lian Law, a visual information specialist at Katmai, called “beautiful, large and in charge” — and a bear named 747, the 2020 champion and by far the beefiest contestant. “When you see him in person, you’re like, ‘yeah, there’s no comparison,’” Kristyn Whatley, an avid Fat Bear Week fan, told the WaPo. “He’s definitely the fattest.”

— Remember the snail darter? The U.S. Fish and Wildlife Service has published a notice in the Federal Register to remove the snail darter, a small freshwater fish native to the Tennessee River watershed, from the list of endangered and threatened wildlife. The agency said the review is based on a thorough review of the best available scientific and commercial information. The fish was placed on the endangered list in 1975, slowing the construction of the Tellico Dam by the Tennessee Valley Authority. The matter reached the U.S. Supreme Court, and a recovery plan was launched in 1978.

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