Putin Escalates War with Call for Partial Mobilization, First Time Since World War II

Fed expected to hike rates by another 75 basis points, but key is what comes next

Russian President Vladimir Putin, in a seven-minute televised address to the nation, on Wednesday morning ordered Russia’s first mobilization since World War II and backed a plan to annex swathes of Ukraine. He also warned the U.S. and its western allies he would be prepared to use nuclear weapons to defend Russia. On Tuesday the lower house of Russia’s parliament passed a bill mandating harsher penalties for deserting the army or refusing to fight. Meanwhile, Russia pushed ahead Tuesday with plans to annex occupied regions of Ukraine (about 15% of the country), as Moscow’s puppet authorities set dates to stage referendums on joining Russia. A Kyiv offensive in the annexed areas would allow Russia to claim an attack against its own territory, raising the threat of further escalation in the conflict. Details in Russia/Ukraine section.

Now what? Putin’s comments sparked a rush to haven assets. The dollar rallied. Oil prices, which were lower Tuesday ahead of the expected bumper Fed rate hike, were pulled in the opposite direction after Putin’s speech, rising close to 3% as supply fears came back into focus. Gold futures, which dipped to near two and a half year lows, were higher. The world awaits a response from the U.S., EU and U.K. President Joe Biden today will offer a ‘firm rebuke’ of Russia’s war on Ukraine during an address to U.N. A top UK official claims that Putin’s announcement is an acknowledgment that Moscow’s invasion “is failing.” Meanwhile, the West and Ukraine have condemned the referendum plan as an illegal sham and vowed never to accept its results. Western governments expect the Kremlin to manipulate the results, and plan not to recognize them.

Investors are looking to the escalating war and the U.S. central bank’s rate decision and commentary from Fed Chairman Jerome Powell due out today.

Yields on the 2-year and 10-year Treasurys touched multi-year highs, fueling concerns that rates may rise even more in the months ahead and hurt equity markets.

U.S. gas prices ticked higher for the first time in 99 days.

Countries move to contain their energy crises. Germany nationalized Uniper, once its largest importer of Russian gas, to shore up its energy supply for the winter. The British government plans to cap energy prices for businesses, its latest bid to contain spiraling costs. Skyrocketing natural-gas prices push some European manufacturers to shift operations to the U.S.

President Biden is expected to announce a major boost to U.S. food aid at his U.N. speech today, officials said. Since Russia’s February invasion of Ukraine, Washington has provided $6.1 billion in humanitarian assistance and $2.3 billion in development aid to fight hunger and bolster food security.

With government funding set to expire in 9 days, most of the Democratic attachments are set to be kicked off the bill to avert a government shutdown. Republican senators are signaling support for additional Ukraine aid, but not for Covid or monkeypox funding. GOP votes are not yet enough for sometimes-centrist Sen. Joe Manchin’s (D-W.Va.) permitting reform proposal.

On the ag policy front, a House Ag subcommittee held a hearing on conservation programs heading into a new farm bill. We have details in the Policy section.

The Justice Department announced charges against 47 people in Minnesota and Ohio whom the department alleges took advantage of relaxed Covid-19 rules allowing more providers to serve children meals to defraud USDA of $250 million by claiming reimbursements for meals never served.

The House Rules Committee on Tuesday approved, 9-3, a closed rule for a bill (HR 8873) to overhaul the counting of presidential electoral votes in response to the Jan. 6 attack on the Capitol.

Election Day 2022 is 48 days away. Election Day 2024 is 776 days away.

Equities today: Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are pointing to higher openings. Risk aversion remains following news that Russian President Putin will partially mobilize more Russian troops to fight in his war with Ukraine, including implying in a speech that he could use nuclear weapons if Russia’s integrity is threatened. The Federal Reserve’s FOMC meeting that began Tuesday morning ends this afternoon with a statement and press conference from Fed Chairman Jerome Powell, including fresh “dot plots” on the U.S. economy. The FOMC is expected to raise the key U.S. Fed funds rate by 0.75% in the Fed’s effort to tamp down problematic price inflation. In Asia, Japan -1.4%. Hong Kong -1.8%. China -0.2%. India -0.4%. In Europe, at midday, London +0.6%. Paris +0.1%. Frankfurt -0.1%.

U.S. equities yesterday: The Dow ended down 313.45 points, 1.01%, at 30,706.23. The Nasdaq declined 109.97 points, 0.95%, at 11,425.05. The S&P 500 fell 43.96 points, 1.13%, at 3,855.93.

The 10-year U.S. Treasury yield rose to 3.571% from 3.489% on Monday, its highest closing level since April 2011. The two-year yield, closely tied to monetary policy expectations, edged higher to 3.962% from 3.946%, the loftiest since October 2007.

Agriculture markets yesterday:

• Corn: December corn rose 13 3/4 cents to $6.92.
• Soy complex: November soybeans rose 17 1/2 cents to $14.78 3/4. December soymeal gained $10.10 to $439.40, a lifetime-high close. December soyoil rose 75 points to 65.91 cents.
• Wheat: December SRW wheat surged 63 1/4 cents to $8.93 3/4, the contract’s highest close since July 8. December HRW wheat rose 53 1/4 cents to $9.63, the contract’s highest close since June 30. December spring wheat gained 41 cents to $9.59 1/4.
• Cotton: December cotton fell 292 points to 93.12 cents, the contract’s lowest closing price since July 25.
• Cattle: October live cattle rose 57.5 cents to $146.30, the highest settlement for a nearby contract since August 2015. October feeder cattle fell $2.275 to $180.025.
• Hogs: October lean hogs fell 50 cents to $95.975, while deferred contracts posted modest gains. The CME lean hog index gained 45 cents to $98.42 (as of Sept. 16). Today’s index is expected to decline 6 cents.
  

Ag markets today: Wheat futures led a round of followthrough buying overnight as tensions between Russia and the West escalated. As of 7:30 a.m. ET, corn futures were trading 1 to 2 cents higher, soybeans were 2 to 3 cents higher, and wheat was 6 to 11 cents higher. Front-month crude oil futures were around $1.75 higher and the U.S. dollar was more than 450 points higher.

Technical viewpoints from Jim Wyckoff:

On tap today:

• U.S. existing-home sales are expected to fall to an annual pace of 4.68 million in August from 4.81 million one month earlier. (10 a.m. ET)
• Heads of the largest U.S. banks are set to face questions from Congress during two days of hearings. (10 a.m. ET) The session is being called “Capitol Grill” by some. CEOs are likely to face tough questions. There will be talk of an economic downturn and whether banks can make it through a recession without needing bailouts. More contentious moments could center on climate change and abortions.
• Federal Reserve issues a policy statement and economic projections at 2 p.m. ET, and Chairman Jerome Powell holds a press conference at 2:30 p.m. ET.

Federal Reserve is expected to approve its third consecutive interest-rate increase of 0.75 percentage point today as part of its campaign against inflation that is running near a four-decade high. Key will be the signals Fed officials send about how much higher they expect to raise rates, how fast they expect to do so, and what they expect the economic consequences to be. Officials are going to release updated economic forecasts for the first time since June that are expected to show a more forceful path ahead than previously anticipated.

CME Fed funds futures have odds at 82% for a 75-basis-point increase at today’s FOMC confab, taking the target range to 3% to 3.25%. Odds are currently at 60.4% for another 75-basis-point rise in November and at 46.7% for a 50-basis-point rise in December. If that unfolds, the target range would be at 4.25% to 4.5% compared with the current 2.25% to 2.5% level.

Interest rates forecasted to peak at 4.26% in March: CNBC survey. Economic analysts expect interest rates to peak at 4.26 percent in March as the Federal Reserve raises rates to combat high inflation, according to a CNBC survey released Tuesday. The September CNBC Fed Survey found that most respondents expect the Fed to raise interest rates to a high level and keep them there for an extended period. The average respondent expects the Fed will raise interest rates by 0.75 percentage points today for the third straight meeting to reduce prices and cool off the economy. Most respondents are concerned about the Fed going too far; 57% said the Fed will raise rates too much and cause a recession. Only 26% said the Fed will tighten economic growth the right amount and only cause a modest slowing of the economy.

The Asian Development Bank cut its growth forecasts for emerging economies in Asia, including China and India. The region’s growth-rate estimate for 2022 has been revised down to 4.3% (from 5.2% in April) because of rising inflation and China’s zero-covid policy. China’s economy is expected to grow by 3.3%, which would be a slower rate than other Asian emerging economies for the first time in 30 years.

Market perspectives:

• Outside markets: The U.S. dollar index, which tracks the currency against six major peers, rose 0.5% to its highest level since June 2002. The Japanese yen, seen as a safe haven, was the only currency up on the dollar. Other haven assets such as gold and bonds also rose. The yield on the 10-year U.S. Treasury note is fetching 3.542%. The 2-year Treasury note yield is 3.961%. Oil prices advanced on fresh concerns that supply from Russia, one of the world’s biggest exporters of crude, would be disrupted. WTI crude prices advanced on the news, climbing as much as 3.2% to $86.62/bbl, over fears that any escalation in the war could lead to tighter oil and gas supply. U.S. crude is now around $85 per barrel and Brent around $92 per barrel. Crude was firmer in Asian trading, with US crude around $84.05 per barrel and Brent around $90.85 per barrel. Gold is getting a significant safe haven bid on the Putin speech news, with gold above $1,683 per troy ounce and silver above $19.55 per troy ounce.

• Gas prices rise for first time in 99 days. AAA’s national average gas price — a metric closely watched by the White House — rose to $3.681 a gallon today from $3.674. That number soared to $5.016 in June. “All streaks have to end at some point,” AAA spokesperson Andrew Gross said. “There are big factors tugging on global oil prices —war, Covid, economic recession, and hurricane season.

• Global natural gas prices rose after Vladimir Putin called up more troops to bolster Russia’s struggling offensive in Ukraine.

• Taiwan to buy $600 million in Iowa corn goods. The plan calls for Taiwan to acquire $600 million worth of corn products from Iowa in 2023-24, according to a statement from Iowa Corn group (link). The agreement includes 1.5 million metric tons of corn and 250,000 metric tons of corn products such as distillers dried grains. “We expect Taiwan to remain a consistent partner of Iowa corn farmers,” a statement said. The U.S. supplies more than one-fifth of Taiwan’s key farm imports, according to the group. In 2021, the total value of U.S. agricultural and related products shipped to Taiwan was $3.94 billion, an increase of 18% vs the prior year, making the island nation the sixth largest market for U.S. farm exports last year, according to USDA.

• Ag trade: The Philippines tendered to buy 45,000 MT of optional origin feed wheat.

• Hurricane Fiona reached Category 4 intensity on Wednesday morning in the hours after several Democratic lawmakers called for increased federal assistance to Puerto Rico to help the island recover from damages caused by the storm. About 89% of the U.S. territory remains without power two days after the hurricane’s touchdown, and upward of 66% of residents don’t have access to drinkable water.

• NWS weather: There is a Moderate Risk of excessive rainfall over parts of the Great Basin/Central Rockies/Southwest/Southern Rockies through Thursday morning... ...There is a Slight Risk of severe thunderstorms over parts of the Great Basin/Northern Intermountain Region and the Lower Great Lakes/Ohio Valley through Thursday morning... ...There is a Slight Risk of excessive rainfall over parts of the Northern Rockies and the Great Basin/Central Rockies/Southern Rockies from Thursday into Friday morning... ...Temperatures will be 10 to 20 degrees above average over parts of the Southern Plains/Lower Mississippi Valley.

Items in Pro Farmer’s First Thing Today include:

• Followthrough buying as Putin threatens nuclear war
• Ukraine’s wheat crop could fall 1 MMT to 3 MMT due to less planted acreage
• China’s interest rate for corporate loans reaches record-low (details in China section)
• India to extend free food program
• Choice beef falls to nearly 18-month low
• Direct cash hog prices jump

— Summary: Vladimir Putin used an address to his nation to accuse the West of “nuclear blackmail.” In a major move, Putin announced a “partial mobilization” of 300,000 reservists — Russia’s first since World War II — just weeks after Ukraine launched a major and effective counteroffensive that forced some of his troops to retreat. He noted “statements of some high-ranking representatives of the leading NATO states about the possibility of using nuclear weapons of mass destruction against Russia.” “To those who allow themselves such statements regarding Russia, I want to remind you that our country also has various means of destruction,” Putin added. “We will certainly use all the means at our disposal ... It’s not a bluff.” The Associated Press reports that shortly after Putin’s address, Russian media reported a sharp spike in demand for plane tickets abroad amid an apparent scramble to leave despite exorbitant prices for flights.

Russian President Vladimir Putin addresses the nation in Moscow earlier today.

• Russia moves to stage annexation votes in Ukraine. Four Ukrainian regions occupied largely by Russia will hold “referendums” on joining Russia (set to be held between Sept. 23-27), according to Russian state media, a move widely seen as a prelude to annexation and a potential escalation of the war. The votes will be held in the Luhansk, Kherson and partly Russian-controlled Zaporizhzhia and Donetsk regions. The annexation would be “irreversible” and enable Moscow to use “all possible force in self-defense,” according to Dmitry Medvedev, Deputy Chairman of Russia’s Security Council (who also served as the country’s president from 2008 to 2012). Russia annexed Crimea in 2014 after a similar referendum that was widely dismissed as illegitimate in the West. President Biden’s national security adviser, Jake Sullivan, called the planned votes a “sham.”

• Treasury and Justice department officials defended the effectiveness of U.S. sanctions placed on Russia following the country’s invasion of Ukraine Feb. 24, despite indications that Russia’s economic pivot toward Asia has buoyed the country. Officials told the Senate Banking Committee Tuesday that Western sanctions have siphoned money away from the Russian war effort and helped Ukraine achieve significant military gains, “The sanctions that the United States and over 30 countries have put in place alongside export controls have had a powerful economic effect in achieving our goal, depriving Russia of revenue and of military equipment to wage its brutal war,” Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crimes in the Treasury Department, told the committee. “Half of Russia’s foreign exchange reserves have been locked up. Russia has been forced to resort to draconian capital controls. It is burning through its fiscal buffers, heading toward fiscal deficit by the end of the year,” she said.
• Macron: Russia “broke our collective security.” In some of his strongest remarks against the Russian invasion of Ukraine, President Emmanuel Macron of France called Moscow’s war a return to “imperialism” in his address on the opening day of the 77th U.N. General Assembly, as the NYT reports (link).

• Germany has provided now nationalized gas importer Uniper with another 8-billion-euro ($7.9 billion) infusion of cash as it seeks to secure energy supplies after Russia halted deliveries of gas. The action follows a 15-billion-euro package deployed in July. Uniper garnered significant losses seeking to find alternative energy supplies. Germany last week took control of a Russian-owned oil refinery supplying much of German energy needs. Germany will hold 99% of Uniper, the country’s economy ministry said. German Economy Minister Robert Habeck also said that a gas levy would be imposed on consumers in October to help importers with additional costs of finding supplies to replace Russian gas.

  While Germany gas storage facilities are currently over 90% full (meaning serious trouble would occur only after this winter), the government is likely to roll out further emergency support until more diversified supplies come online.

• Senators press Treasury on secondary sanctions for Russian oil. Democrats and Republicans on the Senate Banking Committee pushed for secondary sanctions to add teeth to a price cap on Russian oil coordinated by the G7 major industrial countries and their allies.
• Dealing with Putin. At a Brookings forum on Monday, scholars explored the consequences of Russian President Vladimir Putin’s invasion of and war with Ukraine. International relations expert James Goldgeier argued that it will be impossible for the West to restore normal relations with Russia or enjoy stability in Europe so long as Putin remains in power. All we can do is punish him. Panelists agreed that the war has generally weakened Russia.

— House Ag ranking member sees shift from climate focus in new farm bill. Rep. GT Thompson (R-Pa.), ranking on the House Ag panel, said a farm bill conservation title written by his party would focus less on the Biden administration’s climate priorities and more on retooling conservation programs to be innovative and economically useful to farmers. He listed priorities on Tuesday that he said Republicans would pursue in a new farm bill in 2023. “I hope in the next Congress we can truly evaluate the funding needs for these programs paired with an evaluation of the ability to effectively and judiciously deliver these funds to farmers,” Thompson said. “I don’t feel bound by the amount of funding or the specific program allocation passed in the partisan IRA bill,” Thompson said, referring to the August reconciliation bill. Thompson made his comments at a Subcommittee on Conservation and Forestry hearing at which Chairwoman Abigail Spanberger (D-Va.) and ranking member Doug LaMalfa (R-Calif.) heard comments about voluntary conservation programs that are popular with farmers, ranchers and forestland owners but are oversubscribed and understaffed.

Thompson said Congress needs to scrutinize USDA’s use of $20 billion included in the August reconciliation package for major environmental programs. The $20 billion will provide about a 47% increase over previous farm bill levels, according to an analysis from the National Sustainable Agriculture Coalition.

Thompson also said he and his colleagues will look at the $2.8 billion in multiyear grants from the Commodity Credit Corporation (CCC) for climate-smart projects that USDA Secretary Tom Vilsack announced Sept. 14, with $700 million additional funding to be announced later. The program, Partnerships for Climate-Smart Commodities, will fund programs for greenhouse gas reductions on dairy farms, and projects to build markets for climate-smart beef, grains and fruits and vegetables. “There is strong and growing interest in the private sector and among consumers for food that is grown in a climate-friendly way,” Vilsack said in a statement announcing the new programs.

“Congress must be mindful of this massive amount of funding before amending programs or making policy changes that reorient programs toward climate. No one natural resource concern should be prioritized over others,” LaMalfa said.

More than 140 million acres of farmland in the U.S. are currently receiving conservation-related financial and technical assistance from the federal government, according to an analysis from the Farm Bureau. By comparison, the national park system has more than 85 million acres, according to the National Park Service.

Michael Crowder, president of the National Association of Conservation Districts, stressed one message to members. “Voluntary, locally-led, incentive-based conservation works.”

Spanberger noted a complicated application process that makes it difficult to access the programs, while LaMalfa said he was interested in expanding the focus of conservation programs to help forest owners build resilience to withstand wildfires. LaMalfa detailed 2021 Dixie Fire in his district burned 1 million acres.

Iowa beef producer Shayne Wiese, appearing on behalf of the National Cattlemen’s Beef Association, testified that he wasn’t turned down, but was never given an answer on his EQIP request. “While the intent of EQIP is to make conservation funding and technical assistance accessible to all producers, barriers to entry often disincentivize producers from using NRCS programs,” testified Wiese. “Recently, I applied to receive EQIP cost-share funding but after months of waiting, I gave up and completed a water infrastructure project without assistance from USDA.”

Wiese said CRP has the potential to provide significant environmental benefit, but currently fails to maximize its value. “Changes made in the 2018 Farm Bill limit our ability to effectively manage CRP acreage with grazing,” he said. “Grazing is a valuable tool in maximizing carbon sequestration but is not a tool that we are able to use on CRP acreage without penalty. Livestock graze mature, stagnate grasses and allow regrowth of green, carbon-capturing plants. Our ranch took some land out of CRP and transitioned it into our cattle rotational grazing system recently. We have seen improvements to all pastures due to more grazing options.” Wiese noted grazing access to CRP acreage will promote more opportunity for beginning ranchers to graze responsibly and provide existing pastures more rest and recovery during drought years. Furthermore, grazing should be included as a CRP mid-contract management tool, he added. “Cattle and other forms of livestock can, and should, be the sustainable solution to managing CRP acreage,” he said. The flexibility to graze on CRP ground, even if it isn’t declared by emergency haying, provides flexibility for the operation, the panel heard. “The environment benefits, the producer benefits and we benefit because we don’t have the stress of dealing with drought or running out of grass and having to feed really expensive hay.”

Rep. Dusty Johnson (R-S.D.) said many farmers at a roundtable in his state said turnover at the Natural Resources Conservation Service (NRCS) resulted in new hires unfamiliar with the conservation practices under the agency’s programs and unable to provide the level of technical assistance the producers needed.

“NRCS continues to be oversubscribed,” said Nicole Berg, president of the National Association of Wheat Growers. Since the 2018 farm bill, wheat farmers have entered 7,500 contracts in conservation programs, but another 5,000 valid applications from wheat growers did not receive funding, according to Berg.

Spanberger responds. “Noticing that a significant number of producers on the ground want to participate and can’t is a good call to action for us in the future,” Spanberger said.

Other producers complained that the application process is lengthy, and it can take months to get a response — which can be particularly problematic if producers want to address a pressing issue on their land. “We were in a drought, and we needed some new water infrastructure, it was our biggest dilemma. I applied to NRCS, and we waited and waited but finally had to bite the bullet and do the project ourselves,” Shayne Wiese, a rancher from Manning, Iowa, told the committee — adding that new farmers and ranchers might not be able to finance a project on their own.

Lawmakers agreed they would like to support staffing for NRCS and a simpler application process for producers. “We are looking to find on-farm efficiencies and boost the bottom line for producers and make sure we are combating the climate crisis with the first conservationists, who are our nation’s farmers and producers,” Spanberger said at the conclusion of the hearing.

— Denver International Airport CEO Phillip Washington, President Biden’s nominee for administrator of the Federal Aviation Authority, was named in a search warrant connecting him to allegations of corruption at Los Angeles Metro, where he served as CEO from 2015 to 2021. The document asserts that Washington continued to channel nearly $900,000 in funding to a nonprofit run by a close friend of his then-boss Sheila Kuehl, Los Angeles County supervisor, to stay in her good graces despite the organization’s lackluster performance.

— The “massive” correction to China’s commercial real estate market may have at least another two years to run, according to HSBC’s CEO Noel Quinn. The bank said last month it would take further charges against its more than $12 billion of exposure to Chinese real estate, as a third of those assets are “substandard” or “impaired.”

— China’s interest rate for corporate loans reaches record-low. China’s average interest rate for corporate loans stood at 4.05% at the end of August, the lowest level ever, according to the country’s central bank. China will continue to strengthen the guiding role of credit policy and improve financial mechanisms to support the real economy, said the central bank.

— Chinese President Xi Jinping pledged to safeguard supply chain security, in a sign of Beijing’s growing concerns over China’s role in the global economy. Link to details via the South China Morning Post.

— China to sell more pork stocks. China will release another 14,400 MT of frozen pork from state-owned reserves on Sept. 23, continuing its recent sales onto the domestic market to ensure adequate supplies amid rising prices as the country heads into its extended holiday season. In total, China plans to sell around 200,000 MT of pork from state-owned reserves.

— Two U.S. refiners garnered nearly 100 million barrels from SPR. Refiners Valero and Marathon Petroleum Corporation acquired nearly 98 million barrels of crude out of 218 million barrels tapped from the Strategic Petroleum Reserve (SPR) for the 12 months ending September 30. Valero received 52.7 million barrels while Marathon tapped 45.2 million barrels from the SPR, according to research of sales data by Reuters, with Exxon Mobil (24.7 million barrels), Motiva Enterprises (22.1 million barrels), Shell (15.2 million barrels) and Phillips 66 (16 million barrels) also capturing significant levels from the reserve. About 24.2 million barrels were released via exchange while most of the crude was sold via auction. Some 427.2 million barrels remain in the reserve, about four weeks of demand — the lowest level in around 38 years.

— EU plans to upgrade its Paris climate agreement target. The European Union is planning to raise its target to tackle global warming under the Paris climate agreement, Reuters reports (link), upping the bloc’s already-ambitious “nationally determined contribution,” or NDC, that pledges to reduce greenhouse gas emissions by the year 2030. The bloc has already pledged a 55% emissions reduction by 2030, one of the most ambitious goals set by major economies. But EU officials are hoping to bump that number up by a “few percentage points,” as the document indicates. The EU “stands ready to update its NDC in line with the final outcome of the ‘Fit for 55' package in due time,” the document says, referencing the EU’s package of new climate policies, which are still being finalized by negotiators in the bloc. Since “Fit for 55” is unlikely to be finalized before next year, officials said it is unlikely that the ambitious pledge can be made before the COP27 summit in November.

— Hertz buying up to 175,000 GM electric vehicles by 2027. Hertz Global is expanding its electric vehicle offerings and buying up to 175,000 of General Motors brands, including Chevrolet, Buick, GMC, Cadillac, and BrightDrop EVs through 2027. The vehicles will range from luxury to compact to midsize SUVs. The first Chevy Bolt EVs will arrive at Hertz locations in early 2023. Hertz is aiming for one-quarter of its fleet to be electric by the end of 2024. Hertz last year said it would buy 100,000 Tesla vehicles for its fleet and agreed to purchase 65,000 electric cars from Swedish auto maker Polestar. Although electric vehicles cost more upfront than gas-powered vehicles, Hertz charges $30 to $35 more a day for Teslas than for the average premium rental at airport locations, CEO Stephen Scherr recently told analysts.

— Ongoing shift away from fossil fuels toward electric vehicles has industry experts predicting demand for lithium-ion batteries will surge sixfold over the next decade, meaning 384 additional graphite, lithium, nickel and cobalt mines may be needed by 2035. Those resources will go toward manufacturing tens of millions of more batteries annually in the coming years, but creates a financial conundrum for the burgeoning sector in the near-term. Link for details via Forbes.

— Rising coal prices may prove a double-edged sword for one of the world’s biggest coal exporters. Australia is raking in huge amounts of cash from the commodity, the Wall Street Journal reports (link), providing the country and miners like Glencore bigger cash flows amid stronger pricing power. But persistently high prices also risk driving away customers over the long run, particularly when affordable substitutes are available. If extreme weather events become more frequent, as many climatologists predict, there also may be more price volatility for mined commodities like coal. Record rainfall in Australia has already dampened coal production down under, with total Australian coal shipments down 7% this year from a year ago. The long-run forecast might push buyers more quickly to alternative energy if they conclude that coal prices will go haywire with more regularity.

— World leaders urge donating more money to fight hunger and lifting barriers to food and fertilizer trade. More funding is needed, leaders said, to address what they fear will be a prolonged period of food insecurity linked to Russia’s war in Ukraine. At a special food meeting on the sidelines of the United Nations General Assembly, representatives from the European Union, Africa, and the Americas noted signs that the world’s food supply may face even bigger challenges in the future. They cited climate change, rising prices for energy and fertilizer and poor harvests linked to conflicts, including the one in Ukraine. “Next year may be even more difficult, looking at the increase in energy and fertilizer prices,” German Chancellor Olaf Scholz said at the meeting.

President Biden is expected to announce a major boost to U.S. food aid at his U.N. speech today. Since Russia’s February invasion of Ukraine, Washington has provided $6.1 billion in humanitarian assistance and $2.3 billion in development aid to fight hunger and bolster food security. Secretary of State Antony Blinken said Tuesday that Washington is working with other members of the U.N. Security Council to ensure that food and medicine are carved out of any sanctions linked to Russia’s invasion or other conflicts, he said. Jake Sullivan, the White House national security adviser, said the U.S. was working to help the developing world finance its own agricultural systems. “In addition to that, the president will be pressing for the elimination of export bans and of hoarding so that there is a better supply of food to the world market and overall prices come down,” he said.

— Summary:

• Global Covid-19 cases at 613,070,946 with 6,529,865 deaths.
• U.S. case count is at 95,777,196 with 1,054,333 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 612,781,120 doses administered, 224,636,858 have been fully vaccinated, or 68.18% of the U.S. population.

— The FDA released a report highlighting systemic problems that led to the infant formula shortage. The report found the need for updated IT and scientific knowledge in addition to more staffing and oversight.

— Sen. Ron Johnson (R-Wis.) is leading Democratic challenger Mandela Barnes 48%-44% in a new Emerson poll of Wisconsin. Six percent are undecided, and 3% plan to support someone else. Regardless of whom they support, 54% expect Johnson to win, while 46% expect Barnes to win. Link for details.

— Florida: GOP Sen. Marco Rubio leads Democratic Rep. Val Demings, 45% to 41%, per USA Today/Suffolk. Florida Governor Ron DeSantis leads Democratic Rep. and former Gov. Charlie Crist, 48% to 41%.

— Nate Cohn on latest polls in Wisconsin, Georgia. State polling, on the other hand, shows some early signs of a different story in the fight for control of the Senate. The state polls released since Labor Day, in contrast with those released earlier this summer, have tended to show Republicans in a somewhat healthier position in key Senate races. Link for details.

— Voting by mail, a snapshot:

— The far-right Brothers of Italy party is the favorite to win in the country’s parliamentary election on Sunday, even after a new wave of controversy was prompted by resurfaced social media posts authored by one of the party’s candidates that showed him praising Adolf Hitler as a “great statesman” in addition to expressing support for Russian President Vladimir Putin.

— CR bogs down. Sen. Richard Shelby (R-Ala.), the top Republican on the Appropriations Committee, again pleaded for a “clean” continuing resolution (CR), meaning a bill without extraneous policy provisions such as sometimes-centrist Joe Manchin’s (D-W.Va.) permitting reform proposal. “I say it again and again and again,” Shelby said. “The cleaner that CR is, the better it is. I don’t know how much and where all the opposition to the Manchin proposal is but there’s going to be some, and we’ll have to see where our caucus is on this. I like a clean CR – as [clean as] we can get it.” The CR is expected to include around $12 billion for Ukraine. Manchin (D-W.Va.) condemned what he described as “revenge politics” as many Republicans have resisted his efforts to speed up the approval process for energy projects.

“It’s like the revenge politics, basically revenge towards one person: me. And I’m thinking, ‘this is not about me,’” Manchin told reporters on Tuesday. Republicans have long complained that the approval process for energy and infrastructure projects has been too lengthy and stalled important projects. some GOP lawmakers say Manchin’s changes may not go far enough.

— The Senate will be in session in October and will consider the defense authorization bill, Senate Majority Leader Chuck Schumer (D-N.Y.) said. He said it will be out for the Yom Kippur holiday the week of Oct. 3: “There’s one week we can’t meet because of the Yom Kippur holiday, but we will be meeting in October.”

— Today in Congress:

• Senate will meet at 10 a.m. ET to resume consideration of the resolution of ratification on T.Doc.117-1, Amendment to the Montreal Protocol, post-cloture. VA Secretary Denis McDonough will testify before the Veterans’ Affairs Committee at 3 p.m. ET.
• House will meet at 10 a.m. ET. Top bank execs will testify before the Financial Services Committee at 10 a.m. ET — see next item.

— Heads of seven of the largest U.S. banks start two days of congressional hearings. Bank CEOs, including JPMorgan Chase’s Jamie Dimon, Citigroup’s Jane Fraser and Wells Fargo’s Charles Scharf, will face questions from Congress on hot-button issues including money-transfer scams, the state of the U.S. economy and a credit- and debit-card code that identifies when purchases are made at firearms stores. The executives plan to offer a favorable picture of an industry they say helped the economy recover from a pandemic-induced recession, according to prepared remarks.

— A grand jury indicted 47 people for brazen pandemic aid fraud. The defendants are accused of stealing $240 million from anti-hunger programs in Minnesota by billing the government for meals they did not serve to children who did not exist. It appears to be the largest theft so far from a pandemic-relief program.

— Legal challenges to the Biden administration’s student-loan forgiveness plan loom ahead of the midterms. GOP state attorneys general, conservative groups and federal lawmakers are laying the groundwork to challenge President Biden’s executive action to cancel some federal student-loan debt, awaiting a formal move by the administration to start their legal campaigns.

— Beyond Meat exec suspended over nose-bite arrest. Beyond Meat operating chief Doug Ramsey allegedly bit a man’s nose and punched through a Subaru’s back windshield during a road rage incident Saturday in an Arkansas parking garage. Now he’s suspended from his job at the vegan food producer as he waits for his court date in October. Ramsey, who joined Beyond Meat months ago after three decades at Tyson Foods, was also accused of threatening to kill the man.

— New York Yankees slugger Aaron Judge is now one home run short of Roger Maris’s record.

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