Harris Delivers Strong Vision Speech ‘Charting a New Path Forward’

News/Markets/Policy Updates: Aug. 23, 2024

— Kamala Harris gave a strong, well-delivered 37-minute speech at the Democratic National Convention (vs Donald Trump’s 92-minute address), where she accepted the Democratic nomination for president. Highlights: • Harris made history as the first Black and South Asian woman to be nominated for president by a major political party in the United States. • She shared personal stories, including the influence of her mother, a trailblazer in women’s health, who taught her to act against injustice and to never do anything halfway. Harris’ mother Shyamala Gopalan died in 2009. A lesson Harris said her mother taught her: “Never do anything half-assed.” Meanwhile, Harris said she was inspired to become a prosecutor to protect victims after helping a friend in high school who was being sexually abused by her stepfather. • Harris broadly outlined her goals for the Harris/Walz ticket, emphasizing economic opportunity, social justice, and healthcare. She pledged to prioritize building the middle class and to support troops and their families in what she labeled “a new way forward. Not as members of any one party or faction, but as Americans.” Citing her work as a prosecutor who began cases with the five words “Kamala Harris, for the people,” she pledged to represent a diverse country full of people chasing dreams of their own. • Harris sought to offer a broader appeal to the moderate voters she will need to win over to prevail in battleground states. “I know there are people of various political views watching tonight. And I want you to know: I promise to be a president for all Americans,” she said, presenting herself as a bridge builder willing to unify a country riven by political strife and infighting. “You can always trust me to put country above party and self. … I will be a president who unites us around our highest aspirations. A president who leads — and listens. Who is realistic, practical and has common sense.” • Economic policies: Harris promised to build an “opportunity economy” that would enable more people to succeed, regardless of whether they live in rural areas, small towns, or big cities. “I will bring together labor and workers and small-business owners and entrepreneurs and American companies to create jobs,” she said. Harris emphasized the need to lower costs for healthcare, housing, and groceries, and to protect Social Security and Medicare from cuts. She also mentioned plans to address the ongoing housing crisis and to block companies from exploiting crises to raise prices. • Reproductive rights: Harris strongly criticized anti-abortion Republicans and vowed to restore reproductive freedom. She promised to sign a bill into law that would protect women’s reproductive rights if Congress passes one. • Border security and immigration: Harris pledged to bring back a bipartisan border security bill and to reform the immigration system by creating a pathway to citizenship while securing the border. • Voting rights: She underscored the importance of voting rights and expressed her commitment to passing the John Lewis Voting Rights Act and the Freedom to Vote Act. • She was most forceful in talking about foreign policy, highlighting her commitment to international alliances, such as NATO, expressing strong support for Ukraine in its conflict with Russia. She addressed the ongoing conflict in Gaza, calling for an end to the war and a resolution that ensures security for Israel and dignity for Palestinians. “Let me be clear: I will always stand up for Israel’s right to defend itself and I will always ensure Israel has the ability to defend itself,” she said, before adding that “what has happened in Gaza over the past 10 months is devastating.” She reiterated her call for a cease-fire and a release of hostages in Gaza. She expressed her determination to stand against tyranny and dictators, reinforcing her stance on maintaining strong international relationships. • She expressed her intention to lead in global competition, particularly in areas like space and artificial intelligence, ensuring that America, not China, wins the competition for the 21st century. • Harris warned against the potential dangers of a repeat Trump presidency, describing it as a threat to American democracy and contrasting Trump’s approach with her vision of unity and progress. Harris slammed Trump over his legal judgments, economic policies and his role in appointing Supreme Court justices who overturned Roe v. Wade’s right to an abortion. She said a second Trump term would be more dangerous after another Supreme Court ruling, which found that presidents had immunity from certain prosecutions. “Just imagine Donald Trump with no guardrails and how he would use the immense powers of the presidency of the United States,” Harris said. “Not to improve your life. Not to strengthen our national security, but to serve the only client he has ever had: himself.” • Bottom line: Harris focused on her work as a prosecutor and not as vice president. While Harris’ address was powerful, some commentators noted that it lacked specific new policy details. Instead, it focused on broad themes of unity and bipartisanship. Potential voters are seeking specific details about her economic policies, particularly regarding whether she would maintain President Biden’s aggressive antitrust stance, her position on capital gains tax amid the White House’s push to raise taxes on the wealthy and corporations, and whether she would favor a globalist or nationalist approach to trade. Policy details await, including whether the general media will force her to provide more information. (Kevin Lamarque/Reuters) — The Canadian government intervened in the labor dispute between the country’s major freight railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), and the Teamsters Canada Rail Conference union by ordering binding arbitration. This move is expected to allow freight rail operations to resume “within days” according to Labour Minister Steven MacKinnon. While CN has already ended its lockout and initiated its recovery plan, CPKC is also preparing to restart operations. However, the exact timeline for when trains will begin moving again depends on the implementation of the recovery plans and the arbitration process. The intervention aims to mitigate the economic impact of the stoppage and ensure the continuity of rail services critical to both the Canadian and U.S. economies. Link to our special report released Thursday. More on the arbitration process below. — Independent presidential candidate Robert Kennedy Jr. is expected to suspend his 2024 presidential campaign today. Both major parties are keenly observing where his supporters will shift their allegiance as Election Day approaches. On Thursday, Donald Trump said he would be “honored” iKennedy endorsed him. Recently, Kamala Harris has been winning back third party voters; Kennedy’s withdrawal is unlikely to affect the race dramatically. — Key words and themes of the two political conventions. The Democratic National Convention (DNC) this week has been marked by several key themes and notable speeches. Here are some of the main words and themes being emphasized: Democrats • Freedom: A significant theme throughout the convention was the concept of freedom was tied to various social issues, including reproductive rights, LGBTQ+ rights, and opposition to book bans in schools. This theme was underscored by Beyoncé's song “Freedom,” which was used during the event. • Unity and hope: Former President Barack Obama and Michelle Obama delivered powerful speeches focusing on unity and hope for the future. They praised Kamala Harris while criticizing former President Donald Trump. Michelle Obama’s speech was particularly noted for its strong language and critique of Trump, deviating from her famous “when they go low, we go high” mantra. • Joy: The convention also emphasized joy, especially in the context of Kamala Harris’ candidacy. Oprah Winfrey, during her surprise appearance, encouraged the audience to choose joy over anger, reinforcing a positive outlook for the future. • ‘Charting a new way forward.’ She portrayed herself as a leader capable of uniting Americans across political divides to pursue a future characterized by hope and equality. Harris’ vision for this new path involves transcending past bitterness and divisions, focusing instead on collective aspirations and unity as Americans, rather than as members of any particular party or faction. • Labor and workers’ rights: Labor issues were prominently featured, with speakers like Shawn Fain, President of the United Automobile Workers, criticizing Trump and advocating for workers’ rights. This aligns with the Democratic Party’s focus on supporting the middle class and labor unions. • Historical context and breaking barriers: Hillary Clinton spoke about Kamala Harris’ potential to break the “highest, hardest glass ceiling” by becoming the first female president of the United States. This narrative was part of a broader discussion on the historical significance of Harris’s candidacy. — The 2024 Republican National Convention focused on several major themes and frequently used words that reflect the party’s priorities and campaign strategies. Key themes and words that emerged during the convention: Major themes • Economic prosperity: The convention emphasized economic issues, with a focus on reducing inflation, cutting regulations, and promoting American energy independence. The theme for the first day was “Make America Wealthy Once Again,” highlighting economic policies, regulation cuts, and trade deals. • National security: Another significant theme was national security, encapsulated in the theme “Make America Safe Once Again.” This included proposals to bolster law enforcement, combat drug and human trafficking, and secure the U.S. borders. • American strength: The theme “Make America Strong Once Again” focused on foreign policy initiatives and strengthening the military, aiming to restore America’s global standing and ensure peace through strength. • Patriotism and unity: The final day was themed “Make America Great Once Again,” culminating in a speech by former President Donald Trump. This theme underscored a call for national unity and a return to traditional American values. Frequently used words • Economy: Words related to economic concerns were prevalent, such as “inflation,” “prices,” and “jobs,” reflecting the party’s focus on economic challenges and solutions. • Immigration: The convention featured strong rhetoric on immigration, with frequent mentions of “illegal aliens,” “border security,” and “deportation” to emphasize the need for stricter immigration policies. • Security: Terms like “safety,” “crime,” and “law enforcement” were commonly used, aligning with the party’s emphasis on national security and public safety. • Unity: The concept of unity was also highlighted, as the party aimed to present a cohesive front and rally support for their platform and candidates. — Here are some words and themes that each party did not emphasize or use prominently during their conventions: Democrats • Economic concerns specific to inflation: While Democrats discussed some economic issues, they did not emphasize terms like “skyrocketing” or “shocking” prices of gas and groceries, which were highlighted by Republicans as part of their critique of the current administration’s economic policies. • Immigration as a crime issue: Democrats typically avoided framing immigration in terms of crime, such as “illegal aliens” or “migrant crime surge,” which are terms often used by Republicans to discuss immigration issues. • Climate change: Despite its importance to Democrats, climate change was mentioned but not in a significant way, reflecting a strategic choice to focus on other issues. Harris made only a fleeting reference to climate change and clean energy jobs in her acceptance. “The freedom to breathe clean air, drink clean water, and live free from the pollution that fuels the climate crisis” are at stake in the election, Harris warned. But she didn’t give any indication of how her approach to energy and climate may differ from Biden’s, something many climate advocates had hoped to hear in the convention. Republicans • Reproductive rights, abortion and body autonomy: Republicans generally avoided focusing on themes related to reproductive rights and bodily autonomy, which are central to Democratic messaging, especially following the Supreme Court’s Dobbs decision. • Healthcare as a right: Republicans did not use language that frames healthcare as a fundamental right or emphasize comprehensive health reform, which are more aligned with Democratic priorities. — Next presidential step: from conventions to the campaign trail. The focus ahead will be on post-Labor Day surveys of the contest between Harris and Trump. Usually, presidential candidates get a small positive bump in polls following conventions. Since Joe Biden’s withdrawal July 21, the polls have moved Harris’ direction. But after that, it depends on actual candidate positions. — Charlie Cook on what’s ahead: “Trump is fortunate that his 2024 campaign brain trust is far superior to what he had in 2016 and 2020. But while Trump’s high command is certainly smart enough to deal with this radically different race, it is very clear that his own head is not in this game. The demise of his dream matchup with Biden is occupying a major part of his psyche, feeding into his natural, perpetual state of grievance. “How many news cycles will be lost as he litigates in his mind how unfair the world is to him? He should be reminding swing voters why Biden’s job-approval rating dropped from 57% in April 2021 to 40% in January 2022, then more or less stayed there ever since — the cost of living and related economic uncertainty, and the situation along the U.S./Mexico border and broader immigration policy. While inflation has in fact come down, the cost of living is still about 20% higher than it was when Biden took office. Similarly, the border only seemed to come under control after three years of benign neglect, and after much political damage had been done. “Democrats should keep all of this in mind. Yes, they’re deliriously happy that their fortunes have changed. Even many uncommitted voters are pleased that Democrats rescued them from the dreaded Biden-vs.-Trump rematch. But the issue structure that damaged Biden, even before questions over his age became paramount, is still there.” — The U.S. Supreme Court issued a mixed ruling on Arizona’s voting law, partially allowing the state’s requirement for proof of citizenship when registering to vote with a state-created form. However, the Court blocked the requirement for presidential elections and mail-in voting. The decision, reached by a narrow 5-4 vote, reflects ongoing legal challenges and debates over voter registration in Arizona, a key swing state. (One conservative, Justice Amy Coney Barrett, joined the three liberal justices in dissent. Three conservative justices — Clarence Thomas, Samuel Alito and Neil Gorsuch — said they would have allowed all three provisions to be enforced. The court, in a brief order, did not explain its reasoning.) This ruling could complicate the voting process for some eligible voters and has significant implications for Arizona’s electoral processes ahead of the 2024 presidential election.

— Equities today: In Asia, Japan +0.4%. Hong Kong -0.2%. China +0.2%. India flat. In Europe, at midday, London +0.4%. Paris +0.6%. Frankfurt +0.7%. U.S. Dow opened nearly 200 points higher. Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium this morning (10 a.m. ET) is highly anticipated as it may provide insights into the Federal Reserve’s future monetary policy. This year, Powell’s address comes at a time when the economic landscape is different from previous years, with inflation showing signs of moderation and the labor market beginning to slow down.

U.S. equities yesterday: The Dow dropped 0.4% (164 points to 40,712), the S&P 500 declined 0.9% (to 5,570), and the Nasdaq lost 1.7% (to 17,619), marking the steepest daily losses for the S&P and Nasdaq since Aug. 5. Sectors sensitive to interest rates, like information technology and consumer discretionary, were hit hardest, with stocks such as Intel, Tesla, and Nvidia falling significantly.

Bond yields rose as investors sought safer assets, with 2-year and 10-year U.S. Treasury yields both increasing by about 9 basis points.

Money-market fund assets have surged by over $100 billion in August, reaching a record high as investors seek to secure high yields before the Federal Reserve potentially cuts interest rates, Bloomberg reports. Retail investors contributed $21.4 billion of the increase, while institutional investors added about $3.45 billion. The growth in assets was partly offset by withdrawals from prime money-market funds, driven by upcoming SEC regulations that have led some funds to close and prompted investors to reallocate their assets.

— Jack Daniels maker Brown-Forman is the latest company to scale back its diversity initiatives. In a letter to employees, the company announced it would no longer tie executive bonuses to diversity metrics or participate in an annual ranking of corporate LGBTQ policies. This move aligns with other companies like Harley-Davidson, Tractor Supply, and John Deere, which have also reduced their progressive workplace efforts. Conservative commentator Robby Starbuck has claimed credit for influencing these decisions.

— Nestlé, the world’s largest food and beverage company, announced a significant leadership change with the departure of CEO Mark Schneider. Schneider, who has led the company for nearly eight years, is stepping down and will be replaced by Laurent Freixe, a long-serving executive within the company. This transition is set to take effect on Sept. 1. Nestlé did not provide specific reasons for Schneider’s departure, simply stating that he “decided to relinquish his roles as CEO and member of the board of directors.” Schneider, who joined Nestlé from the German healthcare company Fresenius in 2017, was the first external CEO in almost a century for the Swiss multinational. During his tenure, Schneider focused on reshaping Nestlé's portfolio, emphasizing high-growth sectors such as coffee, pet care, and nutritional health products. The company has struggled with maintaining customer loyalty amid necessary price hikes following the Covid-19 pandemic and geopolitical tensions, such as the conflict in Ukraine. These challenges have placed pressure on Nestlé to boost sales and regain market share, especially as competitors like Unilever have outperformed them in recent quarters.

— Ag markets today: Corn pivoted near unchanged, soybeans fell and wheat continued lower in overnight trade. As of 7:30 a.m. ET, corn futures were within a penny of unchanged, soybeans were 2 to 3 cents higher, and wheat was 2 to 4 cents lower. Front-month crude oil futures were trading about a dollar higher, and the U.S. dollar index was modestly lower.

Wholesale beef prices continue to stabilize. After falling most of last week, wholesale beef prices have stabilized for most of this week, with Choice firming 78 cents and Select rising 95 cents on Thursday. Traders continue to anticipate cash market weakness into the fall despite relative strength in October last year, though trade following this afternoon’s Cattle on Feed Report could entice packers to hold out for higher bids.

Pork cutout slide halts. After facing sustained weakness most of the week, wholesale pork prices bounced on Thursday, with cutout firming $1.88 to $96.43. All cuts rose aside from picnics, which was the opposite of Wednesday’s price action. That likely modestly supported cash hog prices, as the decline in the index slowed to 38 cents to $88.83 as of Aug. 21.

— Agriculture markets yesterday:

• Corn: December corn fell 4 3/4 cents to $3.93 1/2.
• Soy complex: November soybeans fell 20 cents to $9.61 1/2, while December meal fell $4.60 to $304.10. September soyoil closed 56 points lower at 40.44 cents.
• Wheat: December SRW wheat futures fell 8 1/2 cents to $5.35 1/2. December HRW wheat futures lost 6 3/4 cents to $5.45. Both markets closed near mid-range and hit new contract lows. December spring wheat futures fell 13 cents to $5.84.
• Cotton: December cotton futures fell 101 points to 69.34 cents, closing nearer the session low.
• Cattle: Most-active October live cattle futures rallied $1.275 to $175.90 Thursday, while October feeders surged $2.575 to $234.25. Wednesday’s decline in live cattle futures probably reflected reports of cash market weakness in the north. USDA’s summary of Wednesday’s trading indicated fed cattle traded rather actively at $184.78 in Nebraska and $186.27 in Iowa-southern Minnesota, which had to disappoint bulls hoping Tuesday’s Iowa-so. Minn. trade around $187.00 would put a stop to the general slippage. On the other hand, light Kansas trading took place at $183.96, whereas TX-OK-NM trade is stuck at $183.00.
• Hogs: Futures blasted higher after making a run at technical support. Nearby October futures leapt $3.475 to $79.625.

— Quotes of note:

• Boston Fed’s Collins supports potential rate cut to preserve job market amid easing inflation. Susan Collins, president of the Boston Federal Reserve, in remarks to the Financial Times (link) emphasized the importance of maintaining a healthy labor market while bringing down inflation. She suggested that the U.S. economy is in a strong position, with inflation easing and the labor market cooling without major concerns. Collins supports a potential interest rate cut, which could begin as early as Sept. 18, as the Fed looks to adjust its policies in a data-driven, methodical way. This sentiment is echoed by other Fed officials, who also favor a cautious approach to lowering rates amid signs that inflation is moving towards the Fed’s 2% goal and the labor market is softening.

Of note: Collins warned against letting negative sentiment about the economy lead to unnecessary caution, which could harm economic growth.

• Philadelphia Fed chief Patrick Harker employed similar rate-cut wording in interviews with Reuters and CNBC in Jackson Hole, Wyoming. “In September we need to start a process of moving rates down,” Harker told CNBC. “We need to start bringing them down methodically.” Harker added he wants more information before deciding whether a 25- or 50 basis-point move would be appropriate next month.

• Kansas City Fed President Jeffrey Schmid said he wasn’t yet ready to support a cut. “It makes sense for me to really look at some of the data that comes in the next few weeks,” he told Bloomberg TV’s Michael McKee in an interview recorded Wednesday and aired Thursday. “Before we act — at least before I act, or recommend acting — I think we need to see a little bit more.”

— What will Fed Chair Jerome Powell say this morning at Jackson Hole, Wyoming? Says Tom Essaye of The Sevens Report: “Powell is expected to clearly foreshadow a September rate cut (so by the end of his speech, everyone should know a rate cut is coming regardless of future economic data). Powell is not expected to hint at whether the cut will be 25 or 50 bps, nor give any insight on how quickly the Fed will cut again after September. Essentially, Powell will clearly signal a September rate cut is coming, but that’s about it.”

The theme of the 2024 conference is titled “Reassessing the Effectiveness and Transmission of Monetary Policy. Powell begins his speech at 10 a.m. ET.

Markets are still pricing in a full percentage point of rate reductions by the end of this year. About 75% of traders anticipate a quarter percentage-point rate cut at the Sept. 17-18 FOMC meeting, while 25% expect a half-point cut, according to the CME FedWatch tool.

Bottom line: The Sept. 6 jobs report will affect the outlook for rates more than Powell’s speech at Jackson Hole. The Consumer Price Index for August will be released on Sept. 11.

— The Transportation Security Administration (TSA) is anticipating its busiest Labor Day travel period ever, marking the end of a record-setting summer travel season. Over 17 million travelers are expected between Aug. 29 and Sept. 4, with summer travel volumes up 8.5% compared to last year. AAA projects a 9% increase in domestic travel during the Labor Day weekend, as prices for domestic airfares and hotels drop by about 5% from 2023 levels. Seattle tops the list of Labor Day destinations, while Alaska cruises are sold out. Conversely, international travel is expected to decrease by 4%, with costs rising by 11%, and European cities dominating the top international destinations.

Market perspectives:

— Outside markets: The U.S. dollar index was lower, with the euro and British pound stronger against the greenback. The yield on the 10-year U.S. Treasury note fell, trading around 3.85%, with a mostly positive tone in global government bond yields. Crude oil futures were higher, with US crude around $74.35 per barrel and Brent around $78.45 per barrel. Futures had been little changed in Asian trading. Gold and silver futures were higher, with gold at around $2,535 per troy ounce and silver at around $29.44 per troy ounce.

— Gasoline pump prices are averaging $3.367 a gallon as of Thursday, down 47 cents from last year, according to GasBuddy. Lower demand in the U.S. and in other oil-consuming nations is keeping pump prices lower ahead of Labor Day, said head of petroleum analysis Patrick De Haan.

— Canada’s federal government ordered its two largest railways to enter binding arbitration with its workers’ union, swiftly ending a shutdown that business groups warned would have “devastating” economic consequences across North America. Labour minister Steven MacKinnon said on Thursday that Canadian National and Canadian Pacific Kansas City will resume operations “within days” and directed the railways to enter binding arbitration with the Teamsters Canada union. “It is the government’s responsibility to ensure industrial peace,” said MacKinnon. This decision was made after it became clear that negotiations were unlikely to succeed without intervention. The government aims to have trains running again within days, as prolonged disruptions could severely impact industries reliant on rail transport, including agriculture, automotive, and energy sectors.

The arbitration process involves a binding resolution mechanism facilitated by a neutral third party, known as an arbitrator. Here’s how it generally works:
• Initiation and agreement: The process begins when both parties, in this case, the Canadian National Railway (CN), Canadian Pacific Kansas City (CPKC), and the Teamsters Canada Rail Conference, agree to enter into arbitration. The Canadian government has mandated this step to resolve the ongoing labor dispute.
• Selection of arbitrator: The parties involved can select an arbitrator mutually. If they cannot agree, an external body, such as the Canada Industrial Relations Board, may appoint one.
• Procedure: The arbitration process does not have legislated procedural rules, allowing the arbitrator and the parties to establish the rules. However, they can follow sample rules of procedure proposed by the Canadian Transportation Agency if they agree.
• Hearing and decision: During arbitration, both parties present their cases, and the arbitrator reviews the evidence and arguments. The arbitrator then makes a legally binding decision, which is typically confidential and must be adhered to by both parties.
• Outcome: The decision made by the arbitrator is final and binding, meaning that it resolves the dispute, and the parties must comply with the terms

The decision to move to binding arbitration has been met with opposition from the New Democratic Party, which traditionally supports unions and criticized the government’s approach as favoring corporate interests. However, the government deemed it necessary to prevent further economic fallout and ensure the stability of North American supply chains.

— Potential strike by 85,000 dockworkers threatens U.S. East and Gulf Coast ports amid contract negotiation stalemate. The potential strike by approximately 85,000 dockworkers represented by the International Longshoremen’s Association (ILA) at 36 ports along the U.S. East and Gulf Coasts is a significant issue that could disrupt supply chains in October. The dockworkers are threatening to strike due to stalled contract negotiations with the United States Maritime Alliance (USMX), which represents terminal operators and shipping companies.

The current contract is set to expire on Sept. 30, and the ILA has issued a 60-day strike notice, as required by federal law, indicating their intention to strike if an agreement is not reached. The main sticking points in the negotiations are economic issues, particularly wages. The ILA is seeking better terms than those negotiated by their West Coast counterparts, the International Longshore and Warehouse Union (ILWU), last year.

The potential strike comes at a critical time, as it could have massive economic impacts, disrupting global trade and supply chains. This disruption could have significant ramifications for the economy, especially given the proximity to the upcoming elections. Companies are already considering diverting shipments or moving them earlier to avoid potential disruptions.

Key events ahead: While the ILA has expressed its dissatisfaction with the current proposals from the USMX, which include industry-leading wage increases and improved benefits, it remains to be seen whether a resolution can be reached before the strike deadline. The White House is monitoring the situation but has not yet intervened in the negotiations. The outcome of the upcoming ILA meeting in early September, where they plan to finalize their contract demands, will be crucial in determining the next steps.

— Day 4 Crop Tour results for Iowa and Minnesota. Scouts on day 4 of the Pro Farmer Crop Tour on Thursday calculated an average corn yield of 192.79 bu. per acre in Iowa, up from 182.80 bu. per acre last year but down from the three-year average of 185.79 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,312.31 for Iowa, up from 1,190.41 last year and the three-year Tour average of 1,191.21.

For Minnesota, the Tour found an average corn yield of 164.9 bu. per acre, down from 181.34 bu. per acre last year and the three-year average of 183.06 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1.036.59 in Minnesota, down from last 984.39 year and the three-year average of 1,037.70.

Pro Farmer’s U.S. corn and soybean crop estimates will be released today at 2:30 p.m. ET.

— USDA daily export sale:
• 120,000 MT soybeans to unknown destinations during 2024-2025 marketing year

— Cattle on Feed Report out this afternoon. USDA will release their monthly Cattle on Feed Report this afternoon. A survey done by the Wall Street Journal shows expectations of steady cattle on feedlots, placements of 104.2% compared to year-ago and marketings 108.2% of year-ago as of August 1.

— NWS outlook: Monsoonal thunderstorms could lead to excessive rainfall for much of the Four Corners region today and into the weekend... ...Record heat begins to relent over the Southern Plains this weekend but near record cool in the eastern U.S. and California... ...Critical Fire Risk and Red Flag Warnings in effect across much of the
Great Basin.

(NWS)

— Indian Prime Minister Narendra Modi is visiting Kyiv for talks with Ukrainian President Volodymyr Zelenskyy, a move that Russia is closely watching. This visit comes as Ukraine intensifies its offensive against Russian forces, seeking to pressure countries like India, which have close ties with Russia, to influence President Putin towards peace on Kyiv’s terms. However, India has not condemned Russia’s invasion, aiming to preserve its relationship with Moscow, a key arms supplier.

— Stabenow comments on farm bill. At the CNN/Politico Grill Thursday, Senate Ag Chair Debbie Stabenow (D-Mich.) suggested that the two parties are still far apart in farm bill negotiations. “Bottom line, we need to sit down and negotiate and be serious,” Stabenow said. “Let’s get together, agree on a bipartisan way we’re going to raise the money” to “meet the needs of ag.”

Of note, Stabenow said: “If I voted for the House bill, I’d get killed by my commodity groups.”

— AFBF sends farm bill letter to Senate leaders. The American Farm Bureau Federation (AFBF) sent a letter (link) to Democratic and Republican Senate leaders Thursday afternoon, urging them to seriously push for a way forward on the farm bill in the Senate before time runs out this year. “What additional evidence do you need to realize we are on the verge of a crisis in farm country?” AFBF President Zippy Duvall wrote in the letter.

— Chinese companies are reportedly using cloud computing services from providers like Amazon to bypass U.S. sanctions and access advanced U.S. chips and AI technologies. This is seen as a way for Beijing-linked enterprises to circumvent Washington’s trade restrictions, according to a Reuters report (link).

— Mexican tariffs are encouraging Chinese companies to invest and produce in Mexico, a “natural partner” for China’s overseas manufacturing, according to Mexico’s ambassador to China, Jesús Seade in an interview with the South China Morning Post (link). Despite concerns over U.S. reactions, Seade assured that Chinese investments are protected under Mexico’s legal framework. Mexico is keen to diversify its economic ties, seeing China as a key partner, especially as U.S./China tensions rise. These tariffs aim to address the trade imbalance between Mexico and China by incentivizing Chinese companies to produce locally, benefiting Mexico’s economy.

While Chinese investment in Mexico remains relatively small, it is welcomed due to China’s global economic influence and manufacturing prowess. Seade emphasized the importance of transparency and compliance with existing rules, reassuring Chinese companies that adherence to these standards will ensure their investments are secure. The move is also intended to prevent circumvention of U.S. tariffs through Mexico, ensuring that investments meet the standards set by the USMCA and Mexican law.

— Former President Donald Trump threatened to impose large tariffs on countries that refuse to accept deported migrants, signaling a potential integration of his immigration and trade policies if he returns to the White House. Trump has made immigration a key focus of his campaign, pledging to complete the border wall and conduct the largest deportation effort in U.S. history. He also visited the U.S./Mexico border, criticizing Vice President Kamala Harris’ handling of immigration. Trump’s economic policy includes imposing tariffs to reduce income taxes, which could significantly impact consumer goods. Polls indicate widespread frustration with current immigration policies, and local Republicans are mobilizing support in Arizona as Trump attempts to regain political ground.

— South Dakota Supreme Court rules Summit Carbon Solutions hasn’t proven eminent domain rights; case returns to lower courts. The South Dakota Supreme Court ruled that Summit Carbon Solutions, the company behind a proposed carbon-capture pipeline, has not yet proven its right to use eminent domain to take private land for public use. The court found that Summit has not demonstrated it qualifies as a common carrier, which is necessary to justify eminent domain. The case will return to lower courts for further proceedings. Landowners opposed to the project view this as a victory, while Summit plans to continue its efforts to prove its case. The ruling raises questions about the project’s viability and its potential environmental impact.

The court’s decision highlights two main issues: whether carbon dioxide can be considered a commodity and whether Summit Carbon Solutions can be classified as a common carrier. These determinations are crucial because only a common carrier of commodities can exercise eminent domain rights under South Dakota law.

Summit Carbon Solutions argues that its pipeline, which aims to transport carbon dioxide emissions from 57 Midwestern ethanol plants to an underground storage site in North Dakota, qualifies as a common carrier because it is paid to transport carbon, thus treating it as a commodity.

However, opponents, including landowners, argue that the carbon dioxide is not a commodity but rather a waste product, and therefore Summit does not meet the criteria for a common carrier.

— BMW overtook Tesla to lead Europe’s electric vehicle market for the first time last month, as sales of fully electric BMWs surged by over a third. Meanwhile, Tesla’s registrations dropped by 16%, indicating a loss of market share to competitors like BMW and Volvo. Overall, European EV registrations totaled 139,300, down about 6% compared to the same period last year.

(Bloomberg)

— California AG secures deal to keep Fresno slaughter plant open, protect 700 jobs amid acquisition. California Attorney General Rob Bonta secured a settlement with Western Valley Meat Company to ensure the continued operation of a Fresno slaughter and processing plant, which it is acquiring from Cargill, Inc. The settlement mandates that Western Valley Meat must keep the plant running for at least 12 months and retain at least 700 employees during that period, ensuring they receive wages and benefits equal to or better than before the acquisition. This agreement addresses concerns that the acquisition could reduce competition, negatively impact dairy farmers, and lead to job losses in the region. The settlement is seen as a win for maintaining local jobs and supporting the dairy industry in California’s Central Valley.

— The FDA approved updated Covid-19 vaccines from Moderna and Pfizer/BioNTech. These vaccines will be available in pharmacies and clinics soon. The CDC has recommended that everyone over 6 months old receive both an updated Covid-19 vaccine and a flu shot this year. Covid-19 levels in U.S. wastewater are currently “very high,” marking the highest summer peak since July 2022. Although hospitalizations and deaths are rising, they remain below the levels seen in previous years. The dominant strain, KP.3.1.1, now accounts for 37% of cases, a significant increase from a month ago. The updated vaccines target KP.2, a related strain of the Omicron variant.

— Cotton AWP moves higher. The Adjusted World Price (AWP) for cotton rose to 55.90 cents per pound, effective today (Aug. 23), down from 55.19 cents per pound the prior week. Meanwhile, USDA announced Special Import Quota #19 will be established Aug. 29 for 43,369 bales of upland cotton, applying to supplies purchased no later than Nov. 26 and entered into the U.S. no later than Feb. 24.

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