Russia Announces Annexation of Four Regions of Ukraine

Senate out until Nov. 14, House to follow after approving stopgap spending bill today | FTC goes after Syngenta, Corteva

Ian regains hurricane strength as it targets South Carolina. The Hurricane Center warned that storm surge of 6 feet or more was still possible from Daytona Beach, Florida, to north of Charleston, South Carolina. And rainfall of up to 8 inches threatened flooding in the Carolinas and Virginia. Port Tampa Bay reopened without major damage while the Jacksonville port remained closed on Thursday under the threat of gale-force winds and storm surges. South Carolina’s Port of Charleston, which is close to the storm’s projected path, has sent all ships out to sea and says its marine terminals will be closed Friday but that operations should resume on Saturday. President Joe Biden said Hurricane Ian may have caused a “substantial loss of life,” possibly making it the “deadliest hurricane in Florida’s history.”

The dollar index edged up above 112 from a one-week low, moving again toward levels not seen since May 2002, after personal spending and core PCE inflation came in above expectations. The dollar is on track for its fourth monthly gain and up almost 10% this quarter, supported by expectations that the Federal Reserve would remain aggressive in battling inflation even at the risk of a recession.

Some potential improvement in the U.K. fiscal drama. U.K. Prime Minister Liz Truss will meet with the U.K. Office for Budget Responsibility today and the hope is something comes from the meeting to further stabilize markets.

Russian President Vladimir Putin moved to annex four Ukrainian provinces today, even though only one is completely under Russia’s control. Putin previously vowed to defend Russian territory by any means necessary, including nuclear warfare.

The EU backs a power-reduction plan. Energy ministers agreed today to measures to reduce consumption and tame climbing gas prices. Steps will include windfall taxes on fossil-fuel companies and targets for lowering electricity use during peak hours.

The U.S. is still drawing oil from the Strategic Petroleum Reserve, despite gasoline prices falling.

Low water levels on the drought-hit Mississippi River present a new challenge to farmers in moving goods.

Six U.S. states sued to block a federal student debt relief program. The Republican-led lawsuit prompted a scale back of the scheme. Arizona also filed a case against the program.

USDA’s Farm Service Agency sent a notice to state and local offices on FSA’s new approach to ensuring racial equity in USDA programs. Translation: redistribution.

The National Association of State Departments of Agriculture (NASDA) directors gave their new farm bill wish list items at their annual meeting, but congressional sources see hurdles ahead for some of them.

The Federal Trade Commission filed a lawsuit against pesticide makers Syngenta and Corteva, alleging anti-competitive practices that have cost farmers (and consumers) millions of dollars.

Democrats’ grip on minority voters could slip in midterm elections, according to a WSJ analysis. And noted election watcher Charlie Cook gives some good advice to election predictors confident of their outlook. See Politics & Elections section.

Election Day 2022 is 39 days away. Election Day 2024 is 767 days away.

Equities today: Global stock markets were mixed overnight, with European stocks mostly up and Asian shares mostly down. U.S. stock indexes saw slightly lower openings. The Dow has lost roughly 5% this quarter, poised for its third consecutive quarterly decline. The S&P 500 and Nasdaq were on track for their third straight quarterly loss for the first time since 2009, down 4% and 3%, respectively. The central bank’s critics say much of the equities turmoil is the result of the Fed waiting too long to address inflation and then doing too much, too quickly to fight it. Also aiding the plunge: The economic mess in the U.K. and the nuclear-tinged anxiety over Russia’s war in Ukraine. In Asia, Japan -1.8%. Hong Kong +0.3%. China -0.6%. India +1.8%. In Europe, at midday, London +0.2%. Paris +0.6%. Frankfurt +0.3%.

U.S. equities yesterday: The Dow fell 458.13 points, 1.54%, at 29,225.61. The Nasdaq was down 314.13 points, 2.84%, 10,737.51. The S&P 500 declined 78.57 points, 2.11%, at 3,640.47.

Apple dragged down the Nasdaq on Thursday as the iPhone maker slumped following a rare downgrade by Bank of America. “We see risk to this outperformance over the next year, as we expect material negative [estimates] revisions driven by weaker consumer demand (Services already in slowdown and we expect products to follow),” analyst Wamsi Mohan wrote in a note to clients. Shares were lowered to Neutral from Buy (PT to $160 from $185), prompting the stock to drop 5% and erasing over $100 billion of market value.

Will equities follow history higher the next three months? Since 1928, the S&P 500 has averaged gains of 0.5% in October, 0.8% in November and 1.4% in December, according to Yardeni Research.

How will equities rally? Here is what the Sevens Report says: “Positively, there is a way out for stocks, and it’s not particularly unrealistic. Inflation recedes (which it will do), the Fed signals a pause (which it will do), a Russia/Ukraine ceasefire occurs (which will happen at some point, even if it’s a Korean War-type solution where the war never actually ends and there’s a demilitarized zone). Then, China realizes that an economic collapse is worse than Covid and the U.K. accepts the reality that one can’t solve a problem partially caused by too much money via throwing more money at it. These things can happen, and they can happen fast. When they do, stocks will stage a massive, legitimate, well-rounded rebound.”

But when will the good news come? “We have to wait for it. In the meantime, it’d be nice if the powers that be just stopped making things worse, because stocks and bonds are trying to hang on — but there’s just too much negative news to overcome.”

Bear season will continue for equities, others say. They note the macro data indicates more trouble ahead. Inflation is running red hot — this morning, eurozone price increases hit a record high — putting pressure on central banks to raise interest rates further to rein in consumer demand, placing the global economy at further risk of slowing. In such a climate, corporate profits could suffer, dealing another headache to investors whose portfolios hold a heavy mix of stocks and bonds.

Ag markets today: Wheat futures were supported overnight by Black Sea supply concerns as Russia was set to annex four regions of Ukraine. Corn and soybeans followed wheat higher ahead of USDA’s reports later this morning. As of 7:30 a.m. ET, corn futures were trading mostly 4 cents higher, soybeans were 5 to 6 cents higher and wheat futures were 9 to 14 cents higher. Front-month crude oil futures were around 40 cents higher, while the U.S. dollar index was up about 170 points.

Technical viewpoints from Jim Wyckoff: “Today is the last day of the month and of the quarter, making it an extra important trading day from a technical perspective.”

On tap today:

• U.S. consumer spending for August, due at 8:30 a.m. ET, is expected to increase 0.3% from the prior month, and personal income is also forecast to increase 0.3%. UPDATE: Personal spending in the U.S. rose 0.4% month-over-month in August of 2022, beating market forecasts of a 0.2% gain. Services spending increased, led by housing and utilities, transportation, and health care while consumption of goods declined, namely gasoline and other energy goods. Gasoline prices dropped 11.8% to $3.691 per gallon in August from July. However, personal spending data for July was revised lower to show a 0.2% drop, compared to an initial reading of a 0.1% rise. Consumption has been resilient in the first half of the year, but is showing signs of cooling, as the Fed monetary tightening continues, energy costs remain elevated and the inflation holds close to 40-year highs, weighing on consumers’ affordability.
Personal income in the U.S. rose by 0.3% from a month earlier in August 2022, the same pace as in July and in line with market expectations. Compensation of employees advanced 0.3% (vs 0.8% in July) on the back of rising wages and salaries, while proprietors’ income was up 1.2% (vs -0.2% in July) supported by an increase in nonfarm income. In addition, government social benefits rose, mainly in Medicare. A 0.2% decline in personal interest income partially offset the monthly gains.
• Personal consumption expenditures price index (PCE) excluding food and energy for August, due at 8:30 a.m.ET, is expected to rise 0.5% from one month earlier and 4.7% from one year earlier. UPDATE: Core PCE prices in the U.S., which exclude food and energy, went up by 0.6% month-over-month in August of 2022, rising from the revised stall in the previous month and slightly above market expectations of a 0.5% uptick. The annual rate, the Federal Reserve’s preferred gauge of inflation, unexpectedly rose to 4.9% from the upwardly revised 4.7% in the prior month, surpassing expectations of 4.7%. Food prices increased 0.8% and energy prices decreased 5.5%.
• Chicago purchasing managers index, due at 9:45 a.m. ET, is expected to fall to 51.8 in September from 52.2 one month earlier.
• University of Michigan’s consumer sentiment index, due at 10 a.m. ET, is expected to hold at 59.5 in September, unchanged from a preliminary reading.
• USDA reports: Grain Stocks, Small Grains Summary, noon ET.
• Baker Hughes rig count is out at 1 p.m. ET.
• CFTC Commitments of Traders report, 3:30 p.m. ET.
• Federal Reserve speakers: Vice Chair Lael Brainard on financial stability at 9 a.m. ET, gov. Michelle Bowman on bank supervision at 11 a.m. ET, Richmond’s Thomas Barkin on inflation at 12:30 p.m. ET, and New York’s John Williams on financial stability at 4:15 p.m. ET.

Mortgage rates rise to 6.7%, highest since 2007. Mortgage rates rose to their highest level in more than 15 years, adding pressure on the already cooling U.S. housing market. The average rate on a 30-year fixed mortgage climbed to 6.7%, according to a survey of lenders released by Freddie Mac. lt was the highest rate since July 2007 and marked the sixth week in a row of rising rates. A year ago, rates were 3.01%.

Fed’s Mester: Doesn’t see financial stability problems for United States. Federal Reserve Bank of Cleveland President Loretta Mester said she does not see distress in U.S. financial markets that would alter the central bank’s campaign to lower very high levels of inflation through interest rate hikes.

Eurozone inflation soars to a record 10%, up from 9.1% in August and above consensus projections of 9.7%. Energy prices rose 40.8% year-on-year, up from 38.6% in August, followed by food, alcohol and tobacco at 11.8%, up from 10.6% last month. The data will exert more pressure on the European Central Bank to hike interest rates aggressively at its October meeting, and increases the likelihood of a longer and deeper recession across the eurozone. European markets are pricing in a more than 70% chance of a 75-basis-point rate hike from the European Central Bank in October.

Market perspectives:

• Outside markets: The U.S. dollar index is modestly up. The yield on the 10-year U.S. Treasury note is rising and presently fetching 3.688%. Crude futures are under pressure. U.S. crude was trading around $80.30 per barrel and Brent around $88 per barrel. Gold and silver are advancing, with gold around $1,669 per troy ounce and silver around $19 per troy ounce.

• Diesel price falls to lowest since March. For the week ending Sept. 26, the U.S. average price of diesel fell 7.5 cents to $4.889 per gallon. According to the U.S. Energy Information Administration (EIS), this price was $1.483 above the same time last year. This most recent price marks the first time since March that diesel was below $4.90 per gallon (having dipped to $4.849 on March 7). From Aug. 29 to Sept. 26, the U.S. average diesel price dropped by 22.6 cents a gallon. The price of diesel fell in all 10 regions. In the Midwest, the key grain-producing region, the diesel price showed the largest decrease, falling by 1.14 cents to $4.881 per gallon. In California, the price of diesel fell 3.9 cents to $6.110, the smallest decrease in any of the regions.

• Not enough barges on the shrinking Mississippi River. Drought is drying up the crucial U.S. water artery. That means less room for vessels shipping out corn and soybeans, the biggest U.S. crops. Barge rates reached $49.88 per ton on Tuesday, the highest on record and up nearly 50% from a year ago.

• Ports in Florida that are still shut will reopen by Saturday, and the state is trucking in food, water, ice, blankets, tarp and pet supplies to help people devastated by the storm, Governor Ron DeSantis said at a press conference Thursday evening.

Hurricane Ian swept through about 40% of Florida’s beef cattle country, leaving ranches “kind of wrecked,” Jim Handley, executive vice president of the Florida Cattlemen’s Association said by phone from Kissimmee. The key for animals now is for water on pastures to recede so they can resume feeding before hunger becomes critical. “It hammered us pretty good,” Handley told Bloomberg.

Fertilizer maker Mosaic Co. found no releases of toxic fertilizer byproduct in the wake of Ian’s landfall, spokesman Bill Barksdale said Thursday. The company will continue to inspect sites in the coming days to confirm its initial assessment, he said. Florida is home to Mosaic Co.’s phosphate rock assets, where they mine product, and to facilities where they turn that rock into fertilizers like diammonium phosphate and monoammonium phosphate, commonly known as DAP and MAP. Mosaic’s New Wales plant was “right in the middle of the damage swath,” said Chuck Watson, a disaster modeler with Enki Research. It could “be out for weeks,” he said. A U.S. duty on Russian and Moroccan phosphate producers means the nation would have to rely on more expensive imports if domestic output goes offline for an extended period, said Bloomberg Intelligence analyst Alexis Maxwell. Hurricane Irma impacted phosphate production in 2017 when Mosaic lost 400,000 metric tons of phosphate products and Potash Corp. idled operations at its White Spring facility for four days, Maxwell said. Mosaic owns more than half of the 15.86 million metric tons of DAP and MAP production capacity in the US, and the bulk of that is in Florida, according to Bloomberg Intelligence data.

• Nestle to halt sourcing Indonesian palm oil from AAL subsidiaries. Nestle said it will stop sourcing palm oil from subsidiaries of Astra Agro Lestari (AAL) over land and human rights abuses, telling Reuters it made the decision based on a recent independent assessment. Nestle instructed suppliers to make sure no palm from three AAL subsidiaries enters the supply chain, saying that AAL has been on its “grievance” list for several months. The action is expected to be completed by year-end.

• Ag trade: South Korea purchased 60,000 MT of corn that’s likely to be sourced from South America or South Africa. The Philippines purchased 50,000 MT of Australian feed barley but passed on a tender to purchase up to 60,000 MT of feed wheat. Mauritius tendered to buy 25,800 MT of optional origin wheat flour. Algeria purchased between 150,000 and 200,000 MT of milling wheat that’s likely to be sourced from Russia and is continuing negotiations on more purchases, which are believed to be more focused on EU origin.

• NWS weather: Hurricane Ian forecast to make second landfall in South Carolina Friday bringing wind, heavy rain, and the threat of severe weather to the Carolinas and Mid-Atlantic... ...Unseasonably cool temperatures forecast across the Eastern U.S. to start the weekend... ...Showers and thunderstorms expected across portions of the Rockies, Great Basin, and Southwest.

Items in Pro Farmer’s First Thing Today include:

• Wheat leads overnight price gains
• Grain Stocks Report, Small Grains Summary out at noon ET
• Another sharp drop in Russia wheat export tax
• Bullish H&P Report
• Cash cattle trade fares better than feared

— Summary: Russian strike kills at least 25 as Kremlin annexes Ukraine regions. A Russian strike on the Ukrainian city of Zaporizhzhia killed at least 23 people and wounded dozens, an official said Friday, just hours before Moscow planned to annex more of Ukraine in an escalation of the seven-month war. The Kremlin announced today that four regions of Ukraine that were forced into elections would be annexed into Russia.

• Taliban ink oil, wheat deal with Russia. The Taliban have signed a preliminary agreement with Russia to receive oil and wheat at discounted rates. According to Taliban officials, the arrangement will start on a trial basis, and the two sides will finalize a long-term plan if they are satisfied with the initial results. The current proposal involves 1 million metric tons of both gasoline and diesel, 2 million metric tons of wheat, and half a million metric tons of cooking gas.
  
• Defeating Putin is not enough to achieve peace, Russian opposition leader Alexei Navalny writes in an op-ed from prison. Only transforming Russia into a parliamentary republic will prevent future wars, he writes for the Washington Post (link).

• EU ministers adopt windfall levy, no deal on gas price cap. European Union energy ministers on Friday adopted a package of measures to soothe the energy crisis, including a windfall levy on profits by fossil fuel companies, but a deal on capping gas prices remained off the table, the Associated Press reports. The measures include a levy on surplus profits made by companies producing or refining oil, gas and coal. The two other main elements of the plan are a temporary cap on the revenues of low-cost electricity generators such as wind, solar and nuclear companies, as well as an obligation for the 27 EU countries to reduce electricity consumption by at least 5% during peak price hours. The text should be adopted next week and enter into force soon after.

— Legal challenges are stacking up for Biden’s student debt forgiveness plan. A group of six conservative states joined forces Thursday on one lawsuit and Arizona is filing its own challenge to Biden’s plan. Arkansas is leading one of the court battles, together with Iowa, Kansas, Missouri, Nebraska and South Carolina. The states are seeking a preliminary injunction – which would halt the administration’s plans – given the Education Department may begin discharging debts in October. Arkansas Attorney General Leslie Rutledge, who had said she was willing to challenge the administration’s plan to cancel student loan debt, in a Thursday press conference called it a disgrace that “the president is trying to bail out adult college students who voluntarily took out these loans.” It’s the second of at least three challenges to Biden’s proposal this week. Biden’s executive order plan would cancel up to $20,000 in student loan debt for Pell Grant recipients and $10,000 for other borrowers, for people earning up to $125,000 a year or part of a household where total earnings are no more than $250,000.

Rutledge said Biden acted beyond his authority. She said the president has declared the pandemic over and questioned how he could discharge student debt now, using the impact of coronavirus as a justification. Arizona Attorney General Mark Brnovich filed his own suit to stop what he described as an “illegal student loan cancellation program.” Brnovich filed in the U.S. District Court of Arizona and also challenged the administration’s use of the HEROES act to cancel student loan debt. “This mass debt forgiveness program is fundamentally unfair, unconstitutional, and unwise,” Brnovich said. “The question Americans need to be asking is why college costs so much in the first place.”

The Congressional Budget Office (CBO) estimates Biden’s plan will cost U.S. taxpayers about $400 billion, with other estimates up to $1 billion.

— USDA’s Farm Service Agency (FSA) sends notice to state and local offices on FSA’s new approach to ensuring racial equity in USDA programs. It quickly follows a recommendation by USDA’s Equity Commission to consider dismantling FSA’s county committee system. The notice (link) defines the difference between “equality” and “equity.” The document says: “Equality uses the same strategies for everyone, but because people are situated differently, they are not likely to get the same outcomes. Equity uses differentiated and targeted strategies to address different needs to get to just outcomes.”

Comments: This relates in part to the redistribution push by the Biden administration.

— NASDA’s farm bill wish list. The National Association of State Departments of Agriculture (NASDA) directors said at their annual meeting that for the 2023 farm bill, they support “continued and increased investments in nutrition and food assistance programs,” the creation of water-quality improvement programs to reduce nitrogen and phosphorus runoff, and “comprehensive and reliable disaster assistance programs that cover all segments of agriculture.”

Comments: Calling for increases in nutrition program spending is going to be a hard sell to some lawmakers after the Biden administration unilaterally increased SNAP spending by $250 billion last August (you read that correctly). A part of this likely dovetails with the White House conference this week and its list of proposals. However, many of the proposals require congressional approval. Veteran congressional contacts do not know what the appetite for that will be in Congress as it hinges on elections. Increased funding for conservation under IRA is broad enough to cover the runoff issue they mention. Some are puzzled by the call for all commodities to be covered by disaster as USDA says all crops for which crop insurance or NAP is available are covered under ERP except crops intended for grazing which is handled under the other program. Says one observer: “What crop is left out I wonder? “

— The Senate by voice vote confirmed Jose Esteban to be USDA’s undersecretary for food safety and Vincent Logan to be a member of the Farm Credit Administration board. No action was taken on two trade positions: Doug McKalip to be chief agricultural trade negotiator in the Office of Trade Representative, and Alexis Taylor to be undersecretary for trade at USDA.

— Freeman confirmed as third circuit’s first woman of color. Former public defender Arianna Freeman became the first Black woman and first woman of color confirmed to a seat on the Philadelphia-based U.S. appeals court.

— Attorney Gomez confirmed for benefits post at Labor Department. The Senate confirmed New York attorney Lisa Gomez to serve as head of the Department of Labor’s Employee Benefits Security Administration after first failing to do so in June.

— Justice Ketanji Brown Jackson formally welcomed to a Supreme Court. The newest associate justice of the Supreme Court will take her seat behind the court’s mahogany bench today at a formal investiture ceremony. Three days later, she will take part in her first oral argument — delving into an environmental case. President Biden and Vice President Kamala Harris are scheduled to attend Jackson’s investiture ceremony at 10 a.m. ET at the high court.

— Dems urge Biden to push for World Bank chief’s removal. Democratic lawmakers urged President Biden to seek the ouster of Trump-appointed World Bank chief David Malpass after he dodged questions on whether he accepted the scientific consensus that burning fossil fuels drives global warming. “His recent statements about climate change are troubling and we urge you to advocate for the removal or forced resignation of David Malpass as World Bank Group president,” more than 25 lawmakers including California Representative Jared Huffman, New York’s Alexandria Ocasio-Cortez, and Pramila Jayapal of Washington wrote in a letter to Biden. “People and governments now more than ever need a World Bank leader who listens to the science and is a global leader in combating climate change and adapting to the impacts that are unavoidable,” the letter said.

— Growth in Chinese factory activity was weak in September, export orders fell and employers cut jobs, two surveys showed Friday, adding to pressure on lackluster economic growth. A monthly purchasing managers’ index released by business news magazine Caixin fell to 48.1 from August’s 49.5 on a 100-point scale in which readings below 50 indicate activity contracting. A separate PMI by an official industry group rose to 50.1 from 49.4. Caixin’s index of new export orders fell to a four-month low of 48.1 from 49.8 and the China Federation of Logistics & Purchasing said its separate index declined to 47 from 48.1. Both said measures of employment were in negative territory, showing companies cut jobs.

— China lowers port fees by 20%. China will lower port fees for cargoes by 20% in the fourth quarter to promote stability and the smooth flow of goods, the transport ministry said on Friday. Local governments are also encouraged to offer preferential fees to encourage more transport.

— China’s raises state purchase price for wheat. China set the 2023 minimum purchase price for wheat at 2,340 yuan ($329.69) per metric ton, an increase of 40 yuan (1.7%) compared with this year. China buys wheat from farmers at the minimum price when the market price drops below that level in order to support stable grain production. Cash wheat prices in the major growing province Shandong currently stand at 3,100 yuan a metric ton.

— China to relax floor on mortgage rates to revive housing sector. Chinese local governments can relax the floor on mortgage rates for first-time home buyers in some cities in phases, the central bank said on Thursday, in a bid to prop up property prices and revive the real estate sector. Localities would be allowed to decide whether to maintain, lower or scrap the floor for such buyers by the end of 2022, the People’s Bank of China (PBOC) said. Banks and customers may negotiate to determine the specific interest rate of new housing loans to help reduce borrowers’ debt burden and better support housing demand, PBOC added.

— The U.S. struck a trade and security agreement with 14 Pacific-island countries. The deal includes $810 million in financial assistance and measures to tackle climate change. It comes amid American concerns over China’s growing influence in the region. President Biden said the security of America and the world depends on “the security of the Pacific Islands.”

— Even as oil prices ease, Biden administration keeps tapping strategic reserve. The Biden administration’s move has brought down gasoline prices. Some experts say continued withdrawals could test the nation’s energy security. Link for details via the New York Times.

— USDA confirms more HPAI in commercial operations. USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed highly pathogenic avian influenza (HPAI) in three additional commercial poultry operations, with two locations in Sanpete County, Utah, with a total of 163,900 turkey meat birds, and one in Ransom County, North Dakota with 69,100 turkey meat birds. Since Aug. 22, the head count is 5.7 million across 35 complexes, five of which have now been released. So far, 27 of the infected flocks have been turkey meat or turkey breeder operations. The two egg mega flocks account for 4.2 million of the depopulated birds.

— Summary:

• Global Covid-19 cases at 617,317,037 with 6,544,909 deaths.
• U.S. case count is at 96,347,008 with 1,059,288 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 616,172,307 doses administered, 268,373,101 have received at least one vaccine, or 81.45% of the U.S. population.

— FDA approved an experimental treatment for ALS, despite questions about its effectiveness. Link for details.

— Democrats’ grip on minority voters could slip in the midterm elections. The big shift of Latino voters toward the Republican Party in 2020, combined with smaller shifts among Asian-American and Black voters, suggests that these traditionally Democratic groups could be more open to GOP candidates in midterm elections this year. A WSJ analysis (link) of census tracts found where the inroads for the Republican Party might prove most influential.

— Abortion and the Jan. 6 Capitol attack have nudged some Nebraskans, usually Republican voters, toward Democrats. Republican Rep. Don Bacon has sought to center his House race on inflation, crime and border security, reports the WSJ (link), as voters in his swing district have shifted. The race is one of several contests where Democrats’ chances have improved, though Republicans remain favored to win control of the House in November.

— Costa’s re-election prospects improve. With odds of a GOP mega-wave fading, the seat of Rep. Jim Costa of California, second in seniority among Democrats on the House Agriculture Committee, was upgraded to “safe” for the midterm elections. Link for more.

— Charlie Cook sums up Nov. 8 elections: A choice election, but an uncertain one. Writes Cook: “In trying to figure out who is likely to win an election, it’s important to remember that one is trying to predict human behavior about something that is certain to be affected by events that have yet to occur. At least in the old days, it was easier for pollsters to be confident that they had reached a reasonably fair cross section of the electorate; now that is not so clear either, despite plenty of methodological tweaking. It is with this in mind that I marvel at those who seem to be supremely confident that they know what will happen on Nov. 8, or Dec. 6 if a runoff is needed in Georgia’s Senate race.”

— Voters in Brazil are heading to the polls on Sunday for a presidential election that will determine the direction of Latin America’s largest economy. President Jair Bolsonaro is running for re-election against his top opponent Luiz Inácio Lula da Silva, who ran the country from 2003-2010. It’s a tense match-up between two polarizing characters, which have checkered histories that have bordered bigotry and racism to corruption scandals and even jail time.

How the election works: The president will be elected to a four-year term via a two-round system, with a runoff taking place on Oct. 30 if no candidate wins more than 50% of the vote. Voting in Brazil is also compulsory from the age of 18 to 70, unless explicitly justified to an electoral court. According to the letter of the law, citizens who fail to vote in an election must pay a small fine, or else risk their passport, being employed in the public sector or other severe penalties.

— Congress’ schedule:

The House will depart after they clear the stopgap spending measure likely this afternoon. They will return after November elections.

Senate is out until Nov. 14. That’s nearly a week after the midterm elections.

— The Senate passed a stopgap funding bill 72-25, sending it to the House to avert a shutdown of most federal agencies. Despite opposition from House Republicans, that chamber is expected to pass the bill this afternoon before Saturday’s start to the new fiscal year. The stopgap bill would extend funding for U.S. gov’t operations through Dec. 16. It provides more than $12 billion to help Ukraine defend against Russia’s invasion, $2 billion for domestic disaster relief (but no extension of USDA’s ERP ag disaster aid program), $2.5 billion for wildfires in New Mexico and $1 billion in home heating assistance. The bill extends Food and Drug Administration user fees for five years, averting a planned layoff.

The vote in the House may be close, with House Minority Leader Kevin McCarthy (R-Calif.) urging his GOP members to vote down the measure in favor of a stopgap that extends into next year. Republicans hope to control Congress and pursue a series of budget cuts — including to the Internal Revenue Service — in the final 2023 spending bills. House Democrats are expected to be enough to clear the bill.

Perspective: Republican opposition forecasts hurdles when lawmakers try to clear an omnibus spending bill when they return post-election.

— Congress waives baby formula ingredient tariffs to ease shortage. The House cleared a bill to waive tariffs temporarily on imports of a key ingredient used in baby formula, sending it to President Biden’s desk to sign. Both chambers acted quickly to pass the bill, saying it will help alleviate the nationwide shortage of formula.

— Lowest mark in a year for cotton AWP. The Adjusted World Price (AWP) for cotton fell to 82/42 cents per pound, effective today (Sept. 30), down from 88.88 cents per pound the prior week and the lowest since it was 77.59 cents pound the week of Sept. 24, 2021. Meanwhile, USDA did not announce a new Special Import Quota for upland cotton as the price trigger for establishing one was not met. USDA is required to announce an import quota “if, for any consecutive 4-week period, the U.S. Far East price exceeds the prevailing world market price.”

— FTC sues Syngenta, Corteva on actions to keep chemical prices artificially high. The Federal Trade Commission (FTC) and 10 state attorneys general filed suit against Syngenta and Corteva alleging the companies entered into agreements with distributors to block competitors from selling cheaper generic products to farmers via so-called “loyalty programs” which saw distributors only get paid if they limited business with competing manufacturers. That, the suit alleges, allowed the companies to “inflate their prices and force American farmers to spend millions of dollars more for their products.” The FTC approved the complaint 4-0-1, with FTC Commissioner Noah Joshua Phillips recusing himself from the vote. Attorneys general from California, Colorado, Illinois, Iowa, Indiana, Minnesota, Nebraska, Oregon, Texas, and Wisconsin have joined the suit. Link to FTC announcement. Link to a redacted public version of the FTC lawsuit.

Bottom line: The lawsuit, which accuses Syngenta and Corteva of violating state and federal laws, asks the court to end the loyalty programs and grant restitution to farmers in Iowa and other states. Consumers were also affected, because higher input costs at the farm rippled through the food chain, said the FTC. The 91-page lawsuit asks for permanent injunctions barring the companies from similar conduct pertaining to all crop protection products and active ingredients, as well as civil penalties, with the amount to be decided by the court.

FTC said Syngenta has monopoly and market power in the U.S. for azoxystrobin, a fungicide; and mesotrione and metolachlor, both herbicides.

Corteva has monopoly and market power in the U.S. relative to the herbicide rimsulfuron and the insecticide and nematicide oxamyl, FTC added. Corteva also has market power with respect to the herbicide acetochlor.

“Farmers are paying unnecessarily high prices for pesticides, on top of soaring costs for other inputs,” said Iowa Attorney General Tom Miller, whose office worked with the Illinois attorney general’s office to lead the states’ investigation. “The defendants’ practices are unfair to smaller competitors and ultimately harm consumers.”

Syngenta spokesman Saswato Das said the arrangements were customer discounts that were “part of a voluntary and industry-standard program that has been in place for decades” in the industry. “Syngenta strongly disagrees with the FTC’s complaint, which it believes is contrary to the facts and the law and is without merit,” Das said in an emailed statement to Reuters. “We are disappointed that the FTC has failed to appreciate the beneficial effects that these rebate programs provide to our channel partners and to growers.”

Corteva spokesperson Kris Allen said in an email that the company believes the complaint has no basis. “We will vigorously defend our position that Corteva’s customer marketing programs are fully compliant with the antitrust laws,” Allen said.

— The death toll from protests in Iran rose to 83, according to a human-rights group. Demonstrations continue to take place in several cities over the death of Mahsa Amini in police custody, after she was arrested for wearing a too-loose hijab. Dozens of protesters, including journalists, are said to have been arrested. On Thursday Germany’s foreign minister called for the EU to impose sanctions against Iran.

— President Biden was advised to declassify a full intelligence report on the murder of journalist Jamal Khashoggi, but he hasn’t done so, according to the Wall Street Journal (link). The White House in February 2021 cleared the release of a long-delayed report that determined that Saudi Crown Prince Mohammed bin Salman, the country’s day-to-day leader, ordered the operation that led to Mr. Khashoggi’s death in 2018, reports Dustin Volz. The recommendations from the panel of experts selected to advocate for more transparency around national-security information were delivered in June.

— Nevada’s winning streak continues with an 18th consecutive month of more than $1 billion in gambling revenue. The start of college football season helped deliver $1.2 billion for August, pushing the Silver State 14% ahead of the 2021 record revenue year.

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