New ‘Clean Car’ Rule Coming Next Week

Stabenow nixes GOP farm bill proposal | Bullish sentiment in oil markets

Jim Wiesemeyer

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March 15, 2024 09:55 AM

Stabenow nixes GOP farm bill proposal | Bullish sentiment in oil markets

Today’s Digital Newspaper

MARKET FOCUS

Bullish sentiment breaks out in oil markets
Triple witching day
FTC Chair Lina Khan highlights Boeing’s dominance in commercial aerospace industry
Federal Reserve expected to maintain course of three interest-rate cuts in 2024
Sevens Report: Why yesterday’s data was worse than market reaction
Monetary policy shifts by other central banks
Debt pressures on middle-class families
U.S. consumer sentiment at 3-month low
El Salvador transferring a ‘big chunk’ its bitcoins to a physical vault
Clouds gathering over container shipping sector
Ag markets today
USDA daily export sale: 125,000 MT corn to unknown destinations, 2023-2024 MY
U.S. attaché trims Argentine soybean crop estimate
Ag trade update
NWS weather outlook
Pro Farmer First Thing Today items

CONGRESS

Lawmakers mull stopgap funding bill for Homeland Security through end of September
Senate tax bill supporters in frenzy to push through a House-passed tax cut bill

ISRAEL/HAMAS CONFLICT

Schumer breaks with Netanyahu, calls for Israeli elections; McConnell rebukes
Hamas proposed what it’s calling a ‘comprehensive’ cease-fire deal

RUSSIA & UKRAINE

House Speaker Johnson expects to pass Ukraine aid bill with Democratic support

POLICY

Growers have until today to make election between ARC and PLC
Stabenow rejects GOP proposal to redirect climate funds in new farm bill.

PERSONNEL

Confirmation of Ambassador to Haiti

CHINA

USDA makes changes to how it monitors China’s soybean imports for WASE
China keeps key rate unchanged, withdraws funds from banking system

ENERGY & CLIMATE CHANGE

Important ‘clean car’ rule coming next week
USDA report calls for expansion of biomass market

LIVESTOCK, NUTRITION & FOOD INDUSTRY

Kroger and Albertsons strongly objected to FTC attempt to block proposed merger

POLITICS & ELECTIONS

Russia has an election this weekend… guess who’s going to win?
Trump’s surging Latino support reshapes political landscape, Dems on defense
Hispanic candidates and Democrats doubling down on their engagement strategies.
Charlie Cook wonders whether Biden misread his 2020 victory
Judge rules Fulton County District Attorney Fani Willis will not be disqualified

OTHER ITEMS OF NOTE

Biden administration proposes plan to save greater sage grouse
Cotton AWP eases a second week
Argentine President Milei’s initial dose of shock therapy teeters on edge of collapse

MARKET FOCUS

— Equities today: Asian and European stock markets were mixed in overnight trading. U.S. stock index futures are set to open slightly higher. In Asia, Japan -0.3%. Hong Kong -1.4%. China +0.5%. India -0.6%. In Europe, at midday, London +0.1%. Paris +0.4%. Frankfurt +0.4%.

U.S. equities yesterday: The Dow dropped 137.66 points, 0.35%, at 38,905.66. The Dow is still up 0.47% on the week, though, on pace to reverse course after two weeks of losses. The Nasdaq lost 49.24 points, 0.30%, at 16,128.53. The S&P 500 was down 14.83 points, 0.29%, at 5,150.48.

— It’s triple witching day, which refers to the simultaneous expiration of stock options, market index options and market index futures. The event can lead to higher volatility and more trading volumes, giving speculators an opportunity for quick arbitrage opportunities. It happens four times a year — on the third Friday of March, June, September and December — with much of the increases in activity taking place during the last hour of trading, otherwise known as the “witching hour.”

— FTC Chair Lina Khan highlighted Boeing’s dominance in the commercial aerospace industry as a prime example of a company becoming “too big to fail” due to acquisitions of domestic competitors. Speaking at an event hosted by the Carnegie Endowment for International Peace, Khan emphasized Boeing’s consolidation as a cautionary tale of gov’t policies inadvertently granting excessive power to corporations. Khan, known for leading antitrust efforts under the Biden administration, criticized the concept of promoting national champions, citing Boeing as a stark illustration of the potential catastrophic consequences of such strategies.

— Ag markets today: Corn, soybean and wheat futures held in relatively tight ranges during light, two-sided trade overnight. As of 7:30 a.m. CT, corn futures were trading fractionally lower, soybeans were 6 to 8 cents lower, SRW wheat was mostly 2 cents higher, HRW wheat was narrowly mixed and HRS wheat was 1 to 4 cents higher. Front-month crude oil futures were around 50 cents lower, and the U.S. dollar index was trading just above unchanged.

Cash cattle strengthen despite futures plunge. Cattle futures posted sharp losses and bearish reversals on Thursday. Despite the futures action, cash cattle trade developed at higher prices late in the day. Based on some of the unconfirmed reports of cash trade, the average price could challenge or exceed the all-time high posted in June 2023.

Cash hog fundamentals remain strong. The CME lean hog index rose another 17 cents to $82.19 as of March 13. The index has rallied $17.14 from the seasonal low and stands $2.30 above year-ago. The pork cutout value firmed $1.29 on Thursday to $93.25, which was $4.88 above last year.

— Agriculture markets yesterday:

Corn: May corn fell 7 1/2 cents to $4.33 3/4, forging a low-range close at the lowest level in more than a week.
Soy complex: May soybeans fell 1 1/2 cents to $11.95 1/4, though traded as high as $12.17 1/2. May soymeal futures rallied $1.0 to $337.4, though settled nearer session lows. May bean oil fell 18 points to 48.39 cents.
Wheat: May SRW wheat lost 12 cents to $5.32 1/4. May HRW wheat fell 12 3/4 cents at $5.74 3/4. Prices closed nearer their session lows today. May spring wheat futures dipped 8 1/2 cents to $6.55.
Cotton: May cotton futures fell 142 points to 93.48 cents, settling nearer session lows.
Cattle: April live cattle fell $2.975 to $186.95. May feeder cattle lost $3.775 at $254.825.
Hogs: Hog futures traded mixed Thursday, with the nearby contracts edging higher and the summer contracts posting modest losses. Nearby April futures ended the day 15 cents higher at $85.025.

— Quotes of note:

Federal Reserve is expected to maintain its course of three interest-rate cuts in 2024 despite an uptick in inflation, according to economists surveyed by Bloomberg News. The Federal Open Market Committee (FOMC) is projected to keep rates steady between 5.25% to 5.5% at its upcoming meeting, with the first rate reduction likely to occur in June. Most economists anticipate three or more cuts in 2024, although a minority expect fewer. Despite recent inflationary pressures, economists predict only minor adjustments to the Fed’s economic and rate projections at the March meeting. They foresee a slight increase in the median forecast for inflation for the year but anticipate no significant changes in the overall outlook. Kathy Bostjancic, chief economist at Nationwide Mutual Insurance Co., suggests that persistent inflation may make Fed Chair Jerome Powell hesitant to signal a near-term rate cut.
Economists anticipate the Fed revising its 2024 forecasts for US gross domestic product (GDP) to an annual rate of 1.7% from 1.4% and increasing its inflation projection to 2.5% from 2.4%. The survey, conducted from March 8-13, gathered input from 49 economists.

Sevens Report: Why yesterday’s data was worse than the market reaction. Thursday’s economic data suggested stagflation and reduced expectations for a June rate cut, leading to a modest drop in stocks. However, the market’s bullish sentiment on stable growth, falling inflation, imminent Fed rate cuts, and enthusiasm for artificial intelligence (AI) remained largely intact, limiting losses. Despite the market’s resilience, the Sevens Report says recent economic reports have hinted at a potential slowdown in economic momentum and persistent price pressures, challenging the bullish narrative. While these reports haven’t triggered significant declines, they highlight a shift in market fundamentals, the service notes. Continued AI enthusiasm and solid economic data have helped offset these concerns, but if evidence mounts that inflation isn’t slowing, growth is moderating, or the Fed won’t cut rates in June, relying solely on AI enthusiasm to support the market may not suffice, the market consultant believes. Although market positives still outweigh negatives for now, Sevens Report says investors should remain vigilant as further disappointing data or Fed statements could amplify concerns and prompt a reassessment of market sentiment.
Monetary policy shifts by other central banks. While U.S. Federal Reserve officials deliberate on future monetary policy, other major central banks are also poised for policy adjustments.

— In Japan, the Bank of Japan (BOJ) is nearing a decision to phase out negative interest rates as their primary monetary policy tool. This comes as data suggests the effectiveness of their ultra-easy monetary policy. Market expectations anticipate a potential shift in the BOJ’s meeting next week, although some speculate it might be postponed to a later meeting.

BOJ Governor Kazuo Ueda, approaching his one-year tenure, has been preparing internally for this policy change since his appointment. He emphasizes the significance of annual wage negotiations with major firms in determining the central bank’s policy direction. Reports indicate that wage hikes exceeding expectations have increased anticipation for a policy shift in the upcoming meeting.

— Meanwhile, the European Central Bank (ECB), which has maintained steady monetary policy for several meetings, is also contemplating rate reductions. ECB council member Olli Rehn disclosed that discussions on rate reduction commenced last week, with a focus on achieving sustainable inflation towards their target rate. However, any action to ease monetary policy is expected “close to the summer,” suggesting no immediate changes but indicating an impending shift.

— Debt pressures on middle-class families. Despite the overall resilience of the U.S. economy, many middle-class families are facing increasing pressure due to rising debt costs. Delinquency rates on credit cards and auto loans have surged to their highest levels in over a decade. Interest payments on non-mortgage debts now rival mortgage interest payments for U.S. households, marking a significant financial burden. The era of high borrowing costs, implemented to curb inflation, has implications for consumer spending and economic sentiment. A recent Bloomberg News assessment noted the following:

Fed Policy and Economic Outlook: The Federal Reserve, set to convene next week for a policy decision, is not expected to cut rates until later in 2024. As debt payments consume a larger portion of workers’ paychecks, consumers become more vulnerable to economic downturns. The high cost of borrowing, not fully captured in inflation figures, has dampened consumer sentiment despite moderating inflation and continued job gains.
Impact on Presidential Election and Economic Health: The debt burden could negatively influence President Joe Biden’s re-election bid, with economic concerns remaining paramount for voters. While many families have benefited from wage gains and increased home prices, loan obligations and interest payments still affect spending decisions. Higher borrowing costs pose a risk to the broader economy, potentially hindering consumption and economic growth.
Expert Insights: According to Shannon Grein, a Wells Fargo economist, the shift towards higher borrowing costs presents a significant challenge to consumption, as credit becomes scarcer and more expensive, acting as a headwind to economic growth.

— U.S. consumer sentiment at 3-month low. The University of Michigan’s consumer sentiment index for the U.S. slightly decreased to 76.5 in March 2024, marking a three-month low compared to February’s figure of 76.9. This result fell below expectations, which had predicted it to remain stable at 76.9. While there were minor improvements in personal finances, they were countered by modest declines in expectations regarding business conditions, as per initial estimates. Despite this, consumers didn’t perceive clear signs of either economic improvement or deterioration. Many are currently refraining from forming judgments about the economy’s trajectory, especially in the long term, awaiting the outcome of the November elections. The expectations gauge dropped to 74.6 from 75.2, while the current conditions subindex remained unchanged at 79.4. Inflation expectations for the next year held steady at 3%, and those for the five-year outlook stayed at 2.9%.

Market perspectives:

— Outside markets: The U.S. dollar index was slightly lower, with the euro and yen stronger against the greenback. The yield on the 10-year U.S. Treasury note fell, trading around 4.29%, with a positive tone in global government bond yields. Crude oil futures are down, with U.S. crude trading at around $80.75 per barrel and Brent at around $84.90 per barrel. Gold and silver futures were up ahead of US trading, with gold around $2,171 per troy ounce and silver around $25.42 per troy ounce.

— Bullish sentiment has broken out in oil markets, helped along by geopolitical uncertainty and an increasingly optimistic demand outlook.

— El Salvador, the world’s first country to establish bitcoin as legal tender, is transferring a “big chunk” of its BTC to a physical vault. The cold wallet, which will keep the holdings offline, will be stored within the country’s territory. “You can call it our first bitcoin piggy bank,” President Nayib Bukele wrote on X. The move comes as the top cryptocurrency hit a record high of around $73,750 on Thursday

— Clouds gathering over container shipping sector, the Wall Street Journal reports (link). Hapag-Lloyd, Germany’s leading container shipping company, has issued a pessimistic forecast for the sector, warning of a potential operating loss this year. The container shipping industry is grappling with challenges stemming from various factors:

A surplus of new ships entering the market coincides with weakening demand, exacerbating the situation.
Turmoil in the Red Sea is adding to operational costs, further straining shipping lines.

Hapag-Lloyd, ranked as the world’s fifth-largest container line, is responding to the pressure on rates by implementing cost-cutting measures and operational adjustments.

Despite a temporary halt in the decline of shipping prices at the beginning of the year, rates have resumed their downward trajectory. According to Drewry Shipping Consultants, average prices for shipments from Shanghai to Rotterdam have plummeted by approximately 30% since January.

Hapag-Lloyd’s average freight rates experienced a significant decline of 48% last year, highlighting the imbalance between supply and demand in the industry.

— U.S. attaché trims Argentine soybean crop estimate. The U.S. ag attaché in Argentina lowered its forecast for the country’s soybean crop to 49.5 MMT, down 500,000 MT from USDA’s official forecast, as “a hot and dry spell hit the region in January and early February stressing the crop in a crucial growth stage.”

— USDA daily export sale: 125,000 MT corn to unknown destinations, 2023-2024 marketing year.

— Ag trade update: Taiwan purchased 97,950 MT of U.S. milling wheat. South Korea purchased 65,000 MT of optional origin feed wheat, excluding Russia, Pakistan, India, Denmark and Argentina.

— NWS weather outlook: Heavy mountain snow continues throughout the Four Corners region into this weekend... ...Severe thunderstorm and excessive rainfall chances shift south into the Southeast and Gulf Coast States... ...Mild weather continues across the Pacific Northwest and East Coast.

Items in Pro Farmer’s First Thing Today include:

• Light grain trade overnight
• Record Feb. NOPA crush expected
• French wheat conditions decline
• China’s new bank loans decline in February

CONGRESS

— Lawmakers are considering a stopgap funding bill for Homeland Security that would extend through the end of September, as border issues stall a six-bill spending package with a midnight March 22 deadline. This temporary measure for the rest of the fiscal year reflects the challenges in negotiating bills related to border security. Sen. Chris Murphy (D-Conn.) noted Republican resistance to compromise on border issues. Appropriations Chair Patty Murray (D-Wash.) cautioned that if an agreement isn’t reached soon, lawmakers may need to resort to a stopgap measure for Homeland Security funds.

— Senate tax bill supporters are in a frenzy to push through a House-passed tax cut bill, which is currently stuck in the Senate. The bill, totaling $78 billion, garnered bipartisan support in the House in January. It includes provisions for business tax breaks and an expansion of the child tax credit. However, its progress in the Senate hinges on securing 60 votes, with GOP backing crucial, especially from Senate Finance Republicans and ranking member Mike Crapo (R-Idaho). Sen. Thom Tillis (R-N.C.), as voiced reservations about the bill’s current form and suggests that sympathetic senators may block its advancement unless their concerns are addressed. That viewpoint was echoed yesterday in comments from Sen. John Thune (R-S.D.). Crapo has raised concerns about the child tax credit provisions, which prompted counteroffers from Wyden’s team. However, an agreement has not been reached yet.

ISRAEL/HAMAS CONFLICT

— Schumer breaks with Netanyahu, calls for Israeli elections; McConnell rebukes. Senate Majority Leader Chuck Schumer, (D-N.Y.) a prominent Jewish elected official in the U.S., made a significant departure from Prime Minister Benjamin Netanyahu’s stance by advocating for new elections in Israel. Schumer expressed his belief that fresh elections are necessary to facilitate an unbiased decision-making process regarding Israel’s future. His remarks, delivered on the Senate floor, mark a notable deviation from the traditional support of Israeli leadership typically seen from U.S. officials.

In response to Schumer’s statement, Republican leader Mitch McConnell (R-Ky.) criticized his Democratic counterpart. McConnell characterized Schumer’s call for new elections as “grotesque,” emphasizing that it is inappropriate to advocate for the removal of a democratically elected leader.

Meanwhile, Israel’s ambassador to America, Michael Herzog, rebuked Schumer, America’s highest-ranking Jewish politician.

— Hamas proposed what it’s calling a “comprehensive” cease-fire deal, in a bid to move forward talks with Israel as their war in Gaza rages. Israeli Prime Minister Benjamin Netanyahu said the militant group is still making unrealistic demands, the country’s war cabinet is expected to discuss the matter today. Hamas proposes that Israeli women, children, elderly, and ill hostages can be freed in exchange for the release of 700-1,000 Palestinian prisoners held in Israeli jails, Reuters reported.

RUSSIA/UKRAINE

— House Speaker Mike Johnson (R-La.) expects to pass a Ukraine assistance bill with Democratic support due to resistance within the GOP. During an interview with Politico (link), Johnson said he plans to bring aid to Ukraine and Israel as separate bills, likely using the House’s suspension calendar, which requires a two-thirds majority. Johnson ruled out attaching foreign aid to a larger spending bill to keep the government open. He anticipates consulting Democrats for support.

This move is seen as a clear commitment to holding a floor vote on Ukraine aid, despite GOP disinterest.

Johnson dismissed the idea of attaching foreign aid to a spending bill. He expressed optimism about avoiding a gov’t shutdown and mentioned plans for a funding bill over the weekend.

The possibility of a standalone Israel aid bill was also mentioned. However, passing aid for Ukraine could provoke backlash from Johnson’s conservative critics, potentially leading to a forced ouster vote.

POLICY UPDATE

— Growers have until today (March 15, 2024) to make an election between ARC and PLC on a crop-by-crop and farm-by-farm basis and to enroll their farm(s) for the 2024 crop year.

Of note: Southern Ag Today writes (link) that farmers cannot participate in the Supplemental Coverage Option (SCO) on a farm if the base acres for that crop have elected ARC for the crop year (and vice versa, especially for winter wheat producers who have already purchased SCO on the 2024 crop). Similarly, cotton producers cannot purchase a Stacked Income Protection Plan (STAX) policy on any farm (FSA Farm Number) where the seed cotton base has been enrolled in ARC or PLC for that crop year. “Despite bearish prices for many commodities, ARC and PLC are still unlikely to provide any assistance in most cases. As a result, we highly encourage you to consider all of the crop insurance options available to you – including area-wide options like STAX, SCO, and the Enhanced Coverage Option (ECO) – before making your FSA election/enrollment decisions.”

— Stabenow rejects GOP proposal to redirect climate funds in new farm bill. Senate Ag Chairwoman Debbie Stabenow (D-Mich.) rejected a Republican proposal to redirect several billion dollars of climate funds into the commodity title of the new farm bill. Stabenow emphasized the importance of retaining climate funds for their intended purpose during an expo on climate-smart agriculture practices. She criticized the idea of splitting the funds, with half going towards commodities, as unacceptable.

Republican staff members from the Senate Agriculture Committee suggested moving $13 billion in climate funds, provided by the 2022 climate law (Inflation Reduction Act/IRA), into the conservation title of the farm bill to bolster conservation spending in the long term. Stabenow expressed support for increasing the conservation baseline but insisted that it must align with the statute’s language on climate-smart agriculture.

In negotiations over the farm bill, farm groups and GOP farm-state lawmakers have prioritized higher reference prices and a stronger crop insurance program, both of which require funding. Climate funds have been considered as a potential source to offset these costs. However, Democrats, including Stabenow, have been firm in their stance against cuts to climate funds or the Supplemental Nutrition Assistance Program (SNAP).

Meanwhile, Stabenow highlighted ongoing negotiations on various aspects of the farm bill, expressing optimism about reaching agreements, particularly regarding strengthening the climate funds title. She emphasized the need to ensure that climate funds are used appropriately.

PERSONNEL

— Confirmation of Ambassador to Haiti. The Senate has confirmed Dennis Hankins as the ambassador to Haiti, marking the first time in over two years that the U.S. will have an ambassador in the country. This comes amid a dire situation in Haiti, with limited humanitarian aid and control by armed gangs in the capital.

CHINA UPDATE

— USDA makes changes to how it monitors China’s soybean imports for its monthly WASDE report. Previously, USDA relied on data from Chinese customs to estimate these imports. However, a discrepancy arose between Chinese customs data and figures from exporting countries, with Chinese data consistently showing lower import numbers compared to exporter reports since 2023. To address this gap, USDA has shifted to using data from global soybean exporters. Joanna Hitchner, a soybean analyst at the World Agricultural Outlook Board (WAOB), told Reuters that while USDA prefers to use Chinese customs data, they will continue to monitor the trade gap to determine if they can revert to using reported import data from China. As a result of this change, USDA has increased its estimate for China’s soybean imports for the 2022-23 period by 3.6% compared to the previous month, reflecting the data from exporting countries. Additionally, USDA has updated its crush figures for China for the years 2020-21 to 2022-23 based on a thorough review of in-country figures and supply data.

— China keeps key rate unchanged, withdraws funds from banking system. The People’s Bank of China (PBOC) kept the rate on 387-billion-yuan ($53.80 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50%. With 481 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 94-billion-yuan fund withdrawal from the banking system — the first cash withdrawal through the liquidity instrument since November 2022. PBOC said the loan operation fully met market demand and its stance of keeping banking system liquidity reasonably ample has not changed, the central bank-backed Financial News reported. “The central bank has no intention of actively draining cash,” the official newspaper said, citing experts.

ENERGY & CLIMATE CHANGE

— Important rule coming next week. The Renewable Fuels Association says the Biden administration is expected to unveil next week (likely on Wednesday) the final version of a clean car rule that could result in two-thirds of new passenger vehicles sold in 2032 running on electricity.

— USDA report calls for expansion of biomass market. USDA released a report urging the expansion of the biomass market, encompassing products like furniture, bioplastics, and biofuels. Agriculture Secretary Tom Vilsack emphasized the potential for increased revenue in the agricultural sector, particularly benefiting rural areas. The report proposes various measures to encourage greater production, including research into biomass crop availability, trials for new crops, improved harvesting methods, and the development of bio-manufactured products. Training programs for workers in the biomass industry are also recommended. The report identifies barriers such as the need for established markets to incentivize farmers to plant biomass crops. Titled “Building a Resilient Biomass Supply,” the full report is available here for review.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Kroger and Albertsons strongly objected to the Federal Trade Commission’s (FTC) attempt to block their proposed merger, asserting that the FTC’s definition of competitive retail and labor markets is too narrow. In detailed comments, both retailers disputed the FTC’s claims and provided counterarguments.

Albertsons criticized the FTC for ignoring the competitive grocery landscape, citing numerous competitors including Walmart, Target, Costco, Amazon/Whole Foods, Trader Joe’s, Sprouts, and dollar stores. Both companies contested the FTC’s assertion that C&S Wholesale Grocers wouldn’t be a viable operator for the divested stores, emphasizing C&S’s capability and industry experience.

Additionally, the retailers disputed the FTC’s characterization of “union grocery labor” as a competitive market, arguing that this approach is unprecedented and ignores the broader labor market context. Kroger noted that C&S would assume Albertsons’ role for collective bargaining purposes in areas where it acquires divested union stores and distribution centers.

Albertsons concluded that the FTC’s challenge to the merger is based on flawed assertions and should fail. The comments from both companies scrutinized the FTC’s claims, challenging vague terminology and alleged misinterpretations of past statements.

These objections were submitted in preparation for the FTC’s internal review of the merger, overseen by an administrative law judge in Washington, D.C. Meanwhile, the FTC’s request for a preliminary injunction to block the merger is set to be heard in U.S. District Court in Portland, Oregon, starting on Aug. 26.

POLITICS & ELECTIONS

— Russia has an election this weekend. Vladimir Putin, 71, is all but assured another term. His true political opponents are either in jail or in exile abroad. Putin is likely to begin another six-year term with his forces being on the offensive after a hiatus of several months. This offensive stance is concerning for Ukraine, whose allies are facing challenges in providing it with adequate ammunition. There are worries among officials in Kyiv about the possibility of a Russian breakthrough. European leaders are openly cautioning about the potential for a Russian attack on a NATO member state. Furthermore, there is speculation about whether the United States would support NATO allies under a potential second presidency of Donald Trump, should he be re-elected in November.

NPR notes that it’s the first time voting will take place over three days, and online voting is now available in about a third of the country. The military is securing voting for people in areas of Ukraine that Russia claims to have annexed. Kremlin critics and election experts warn these moves could open the doors for vote rigging.

— Trump’s surging Latino support reshapes political landscape, Democrats on defense. Former President Donald Trump’s growing support among Latino voters is reshaping the political landscape and potentially altering the Democratic stronghold on this demographic, which has been crucial for their electoral victories for over a decade, according to a New York Times account (link). Surveys indicate an increase in Trump’s favor among Latino voters since his 2020 defeat, with some polls suggesting he’s gaining over 40% percent of their support — a level unprecedented for Republicans in recent history. This shift forces Democrats to defend their significant majority among Latino voters, essential for their electoral success in recent years.

With Latino voters comprising an estimated 15% of eligible voters nationwide and holding considerable sway in critical states like California, Arizona, and Nevada, both parties are intensifying efforts to court this demographic.

Factors contributing to Trump’s increased support among Latinos include his appeal to law enforcement along the Mexican border, Cuban Americans in Florida opposed to perceived socialist policies, evangelical Christians drawn to Christian nationalism, and U.S.-born Latinos identifying more with their white peers.

An education divide is evident, with Trump gaining traction among Hispanic voters without a college degree compared to college-educated Hispanics. This demographic diversity within the Latino population complicates the political landscape, with implications for both parties.

The extent and longevity of these Trump-era changes remain uncertain. While polling suggests a slight drift of Latino voters toward the Republican Party, there’s no clear evidence of a massive movement. Some Democratic strategists believe current polls overestimate Hispanic support for Trump and anticipate a return to the Democratic fold as Trump’s rhetoric repels them.

Both parties are intensifying outreach efforts, with Republicans fielding more Hispanic candidates and Democrats doubling down on their engagement strategies.

— As President Biden’s numbers continue to reach new lows, Charlie Cook wonders whether he misread his 2020 victory. In an article first published in the National Journal, election expert Charlie Cook discusses the phenomenon of political decision-making, particularly in the context of the United States, where the size of a political victory often shapes the perceived mandate for policy action. The author reflects on their experience in politics and observes a shift in how political victories are interpreted and utilized.

Traditionally, the author argues, the scale of a political win determined the scope of action the newly elected leaders could pursue. A landslide victory, like that of Lyndon B. Johnson in 1964, was seen as a mandate for bold, sweeping changes. Conversely, a narrow win was viewed as a cautionary signal, suggesting limited support for major policy shifts.

However, the author suggests that this cautionary approach seems outdated in modern politics. He cites the example of President Biden, who, despite a narrow victory in 2020 and slim majorities in Congress, pursued an ambitious policy agenda. This included passing the American Rescue Plan along party lines, revoking the Keystone XL Pipeline permit, and issuing numerous executive orders.

Similarly, President Trump, despite losing the popular vote and winning narrowly in key states in 2016, pursued significant policy changes during his tenure, such as attempting to ban immigration from Muslim-majority countries and withdrawing from international agreements like the Paris climate accords.

Cook observes a trend where political victories, regardless of size, are now often interpreted as mandates for bold action. He attributes this shift to a desire to capitalize on political power while it lasts, given the uncertainty of how long it will be retained.

But Cook warns of the risks of overreaching, as pursuing an aggressive agenda without a clear mandate may provoke backlash and undermine the governing party’s position. He argues that this cycle of power shifting between parties, driven by perceived overreach, creates instability and complicates long-term policy planning for businesses and other stakeholders.

— A judge in Georgia ruled Fulton County District Attorney Fani Willis will not be disqualified from former President Donald Trump’s election interference case, allowing the case to proceed after weeks of scandal over Willis’ romantic relationship with her lead prosecutor and an alleged conflict of interest — though the judge did order Willis to either step down from the case or cut ties with her lead prosecutor. Judge Scott McAfee ruled Friday morning that Willis will not be disqualified from prosecuting the case, where Trump and 18 co-defendants face racketeering and conspiracy charges over an alleged bid to overturn the results of the 2020 election. McAfee stated in a ruling that defendants failed to prove Willis had “an actual conflict of interest in this case through her personal relationship and recurring travels with her lead prosecutor.” McAfee also directed Willis or prosecutor Nathan Wade to step down from the case due to the appearance of impropriety.

OTHER ITEMS OF NOTE

— Biden administration proposes plan to save greater sage grouse, saying the bird species is threatened by habitat loss primarily due to human activities like oil and gas drilling, mining, and livestock grazing in the American West. The plan, outlined by the Bureau of Land Management (BLM), aims to manage approximately 67 million acres of sage grouse habitat across 11 western states. The draft plan includes various alternatives, one of which would reinstate restrictions on drilling and other activities put in place during the Obama administration in 2015.

This proposal clashes with the interests of the fossil fuel industry, which views the bird as a barrier to accessing lucrative oil and gas reserves in the region.

The greater sage grouse population has sharply declined over the past few decades, with an estimated 80% decrease from 1965 to 2021, leaving as few as 200,000 individuals today. Habitat destruction, exacerbated by wildfires, invasive species like cheatgrass, and climate change-driven megadroughts, has contributed to this decline.

Environmental groups like the Center for Western Priorities view the draft plan as crucial for the survival of the sage-grouse and its ecosystem. However, implementing regulations to protect the bird’s habitat may also impact renewable energy projects vital for the country’s transition away from fossil fuels.

The Biden administration aims to permit 25,000 megawatts of renewable energy on federal lands by 2025, but balancing this goal with sage grouse conservation presents challenges. Renewable energy development in sage grouse habitat could have adverse effects on the bird species.

Despite its declining population, the greater sage grouse is not listed as threatened or endangered under the Endangered Species Act, partly due to protective measures implemented during the Obama administration and subsequent legislative actions preventing future listings.

— Cotton AWP eases a second week. The Adjusted World Price (AWP) for cotton is at 76.10 cents per pound, effective today (March 15), down from 76.88 cents per pound the prior week, and a second weekly decline. The level remains well above any mark that would trigger an LDP under U.S. farm programs. Meanwhile, USDA said that Special Import Quota #22 would be established March 21 for 29,975 bales of upland cotton, applying to supplies purchased no later than June 18 and entered into the U.S. not later than Sept. 16.

— President Javier Milei’s initial dose of shock therapy teeters on the edge of collapse after Argentina’s senate defeated his sweeping executive decree in a 42-to-25 vote Thursday. Link to Bloomberg item. The lower house must now vote on the issue, with the decree remaining in place until then. Milei wants to alter or remove more than 300 regulations in sectors ranging from the housing-rental market to pharmaceuticals. He campaigned on taking a “chainsaw” to Argentina’s bloated state.

KEY LINKS

Policy Updates