Some Progress in Debt Limit/Budget Cut Talks; Friday Meeting Delayed to Next Week

Calif. Prop 12 update | Rail safety bill | Refilling SPR | U.S./China officials talk | CRP

Biden administration warns migrants wanting to cross the U.S./Mexico border. Alejandro Mayorkas, the Homeland Security secretary, reiterated that the “border is not open” after Title 42, a pandemic-era policy that allowed the government to expel migrants before they could apply for asylum, expired yesterday. Under new rules, with few exceptions, illegal crossers are barred from requesting asylum and face a five-year ban on re-entry.

A GOP border-security bill that narrowly passed the House on Thursday is expected to stall in the Senate — Senate Democratic leaders said that they had no intention of scheduling a vote on the bill, and the White House said it would be vetoed if it went to the president’s desk.

U.S. equities were gaining this morning on some good news coming from Washington: signs that talks on the debt-ceiling impasse had taken a positive turn. See Policy section.

PacWest shares fell 23% after the lender reported losing 9.5% of its total deposits last week, suggesting the government’s ad hoc approach to backstopping depositors hasn’t allayed concerns. Other regional banks followed. The KBW Nasdaq Regional Banking Index fell about 2.4% and shares of other regional banks including Zions, Comerica and Bank of Hawaii slid between about 4% and 10%.

Ukrainian forces have begun “shaping” operations in advance of a highly anticipated counteroffensive against Russian forces, a senior U.S. military official and a senior Western official tell CNN. Shaping involves striking targets such as weapons depots, command centers and armor and artillery systems to prepare the battlefield for advancing forces. On the ground, Ukraine says its forces have pushed the Russians back 2 kilometers around Bakhmut over the past week. Moscow has rejected Kyiv’s claims.

China will send an envoy to Russia and Ukraine to help negotiate an end to the war. Li Hui, China’s special representative for Eurasian affairs, is expected to begin his trip on Monday.

Ukraine grain-deal talks ended Thursday with an extension still in doubt, but Turkey says extension of Black Sea grain deal nearing. More in Russia/Ukraine section.

Senior U.S. and Chinese officials hold rare talks. Jake Sullivan, the national security adviser, met Wang Yi, China’s top foreign affairs official, in Vienna this week in a bid to reset high-level contacts between Washington and Beijing. The discussions follow a period of limited senior communication after the U.S. shot down a suspected Chinese spy balloon.

Former National Basketball Association (NBA) star Dwight Howard has triggered a wave of criticism on Chinese social media for calling Taiwan a country in a promotional video with Taiwan’s vice president.

SCOTUS ruled against the U.S. pork industry regarding California’s Proposition 12. We filed a special report on this earlier (link). Attention now also shifts to the actual implementation of Proposition 12 regarding pork. A California superior court judge in December extended a delay in enforcing the law in California given the pending Supreme Court decision. In that ruling, the judge said enforcement would not take place until July 2023, pending the outcome of the Supreme Court’s ruling. See more in Livestock section.

Sens. Cory Booker (D-N.J.) and Chuck Grassley (R-Iowa) introduced a bill to reform the Conservation Reserve Program (CRP) to focus future enrollments on marginal farmland rather than prime farmland. More in Congress section.

The Senate voted mostly along party lines to overturn two Biden administration rules related to the Endangered Species Act through Congressional Review Act resolutions, although President Joe Biden has vowed to veto both measures if they reach his desk.

Elon Musk on Thursday said he’s found a new CEO for Twitter, months after he first promised to step back from the role. The new hire comes after Musk ran a poll asking users whether he should step down, with most users voting in the affirmative. Musk did not provide the name of the CEO, but the Wall Street Journal reported — citing sources — that Linda Yaccarino, NBCUniversal’s head of advertising, was in talks for the job.

Equities today: Global stock markets were mixed overnight. U.S. Dow opened around 80 points higher. In Asia, Japan +0.9%. Hong Kong -0.6%. China -1.1%. India +0.2%. In Europe, at midday, London +0.4%. Paris +0.9%. Frankfurt +0.5%.

U.S. equities yesterday: The Dow closed down 221.82 points, 0.66%, at 33,309.51. The Nasdaq rose 22.06 points, 0.18%, at 4,130.62. The S&P 500 declined 7.02 points, 0.17%, at 4,130.62.

Short sellers are making huge returns on regional bank stocks. These traders, who profit from the falling share price of companies they target, have made more than $7.5 billion in 2023 going after smaller lenders, according to S3 Partners, a financial data provider. They likely added to that tally yesterday as shares in PacWest, the most shorted regional bank, closed nearly 23% lower after it announced a new flight of deposits last week. The SEC isn’t planning to ban short selling. But the New York Times’ DealBook hears that there is “growing pressure on the regulator to implement short-seller rules that were required under the Dodd Frank Act. Section 929X of the act requires the SEC to adopt rules around the disclosure of short positions. The SEC never fully followed through with that mandate, and there is some debate over whether it means revealing individual short positions or aggregate investments.” Proponents say this would add much needed transparency to the market, because other investors, the management of targeted companies and policymakers need to understand what is really happening when a stock is under attack. Opponents say short sellers aren’t the real problem. They say disclosing who was shorting a stock would give companies a reason to avoid communicating with those investors, preventing important conversations. “There’s always been a worry that if you had short-sale disclosure, companies would use that as a weapon to not talk to people,” Jay Clayton, the former head of the SEC, told DealBook.

Agriculture markets yesterday:

• Corn: July corn futures fell 11 3/4 cents and closed near the session low at $5.82 1/4. December futures fell 7 cents to $5.13 3/4.
• Soy complex: July soybeans rose 1 1/2 cent to $14.05 1/2, a high-range close after trading to the lowest level since March 24. July meal surged $11.90 to $431.40, while July soyoil fell 90 points to 51.15 cents.
• Wheat: July SRW wheat fell 14 cents to $6.27 1/4. July HRW wheat dropped 13 3/4 cents at $8.41 1/2. Prices closed nearer the session lows. July spring wheat fell 12 3/4 cents to $8.36 3/4.
• Cotton: July cotton fell 114 points to 79.62 cents, ending the session near the intraday low.
• Cattle: June live cattle edged 5 cents lower to $162.95 Thursday, whereas August feeder futures surged 92.5 cents to $226.075 in response to grain market weakness.
• Hogs: June lean hogs fell 30 cents to $83.875 today and nearer the session low.
  

Ag markets today: Corrective buying supported corn, soybean and wheat futures overnight ahead of USDA’s May crop reports later this morning. As of 6:30 a.m. ET, corn futures were trading mostly a penny higher, soybeans were 3 to 9 cents higher, SRW wheat was 8 to 9 cents higher, HRW wheat was 12 to 16 cents higher and HRS wheat was 13 to 14 cents higher. Front-month crude oil futures were modestly firmer, while the U.S. dollar index is around 175 points higher.

Market quotes of note:

• JPMorgan’s Jamie Dimon said its time for regulators to help put an end to turmoil in the banking industry. In a wide-ranging interview with Bloomberg TV, Dimon predicts this may prove difficult, as policymakers are likely to take the wrong lessons from the upheaval and over-compensate with additional red tape: “I think it’s going to get worse for banks — more regulations, more rules and more requirements.” He said that regulators need to get a better handle on smaller banks’ financial situations, to avoid being “constantly” surprised. Despite the tumult, he said the regional-bank industry is quite strong, adding he believes it’s nearing “the tail end” of the problem.
  
• Fed governor Michelle Bowman said the central bank should be prepared to continue lifting interest rates because inflation remains too high, and the labor market is too tight. In remarks prepared for delivery today at a banking conference in Germany, she said she wasn’t confident the central bank was making enough progress slowing down economic activity and inflation even though she allowed that interest rates were now at a restrictive setting. “Should inflation remain high and the labor market remain tight, additional monetary policy tightening will likely be appropriate to attain a sufficiently restrictive stance of monetary policy to lower inflation over time,” she said in her remarks in Germany. Bowman said she would be looking for “consistent evidence that inflation is on a downward path” to determine whether interest rates were at a sufficiently restrictive level.
  
• Easing supplier prices. “As the second half of 2023 wears on, producers may find their customers unable to weather higher costs.” — PNC economist Kurt Rankin, on easing supplier prices.
  

On tap today:

• U.S. import prices for April are expected to rise 0.3% from the prior month. (8:30 a.m. ET) UPDATE: Import prices in the U.S. increased 0.4% mom in April, the first rise in four months and the biggest since May 2022, led by higher fuel costs. Export prices edged up 0.2%, rebounding from a 0.6% fall, with corn, nuts, meat, and vegetables among the largest contributors. Meanwhile, import prices fell 4.8% on the year and export cost sank 5.9%, the biggest declines since May of 2020.
• University of Michigan’s preliminary consumer sentiment index for May is expected to fall to 63.0 from 63.5 at the end of April. (10 a.m. ET)
• USDA WASDE report, 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: San Francisco’s Mary Daly commencement address at 2:20 p.m. ET, and governor Philip Jefferson and St. Louis’s James Bullard on a monetary policy panel at 7:45 p.m. ET.
• President Biden is scheduled to meet with Spanish President Pedro Sanchez at 2 p.m. ET in the Oval Office.

Mortgage rates ticked lower for a second straight week, to the lowest level in about a month. The average rate on the standard 30-year fixed mortgage fell to 6.35%, according to Freddie Mac.

British economy expands 0.1%. The British economy expanded 0.1% on quarter in Q1 2023, the same as in Q4 2022, and matching market forecasts. Services, manufacturing and investment made the biggest contributions while household spending showed no growth as incomes continue to be squeezed by high inflation.

A new survey found U.S. employees are more satisfied than they’ve been since 1987. The record satisfaction level is being driven by a tighter labor market that’s allowing employees to command better pay, benefits and more flexible working arrangements.

Southwest pilots vote to authorize a strike. The move comes as United and American negotiate new contracts with their own pilots.

Market perspectives:

• Outside markets: The U.S. dollar index was slightly higher, with the euro weaker against the greenback. The yield on the 10-year U.S. Treasury note rose to 3.41%, with a mixed tone in global government bond yields. Crude oil futures remain higher but are off of levels seen earlier, with U.S. crude around $71.05 per barrel and Brent around $75.10 per barrel. Gold and silver were under pressure ahead of US trading, with gold around $2,009 per troy ounce and silver around $23.99 per troy ounce.

• Copper futures prices hit a 5.5-month low overnight. Less demand for copper, a leading global commercial construction component, also hints of a slowing world economy. Copper futures fell as signs of increasingly low demand outweighed evidence of tight supply. Economic data continually suggests that the reopening of the Chinese economy has not lived up to expectations of a sharper recovery.

• The South African rand dropped to an all-time low, after the U.S. ambassador to the country accused it of supplying weapons to Russia in a clandestine naval operation. The rand dropped 1.4% to R19.34 against the dollar, passing its previous low of 19.35 in April 2020. South Africa also suffered its worst power cuts on record this week, darkening the mood of investors.

• Talks to secure the biggest ever gold-mining deal will be extended by a week after Newmont Corp. and Newcrest Mining Ltd. failed to reach a binding agreement in the time originally allotted. Link to more via Bloomberg.

• Steel rebar futures fell to the CNY 3,550 level in mid-May, hovering at its lowest since early November as new data renewed expectations of low demand in the world’s top consumer, China. The new bank loans fell more than expected in April, adding to a slew of evidence that the Chinese economy is not recovering as previously hoped.

• Top corn importer China could cancel more purchases of the grain from the U.S. because the country can get cheaper supplies from Brazil, while some local producers of hog feed are replacing corn with wheat in their rations. Supplies from Brazil about $30 a ton cheaper for delivery in the third quarter, traders told Bloomberg. Weak domestic demand for corn as animal feed is also a reason behind the cancellations. Wheat prices are about 180 yuan ($26) a ton cheaper than corn in Henan, and they may decline further as a bumper harvest is about to arrive on the market. Wheat also has a higher protein content than corn, and can also be used to replace some of the soybean meal used in feed.

• Ag trade: South Korea purchased 132,000 MT of corn expected to be sourced from South America.

• NWS weather outlook: Heavy rain, flash flooding and severe weather likely across large portions of the Plains... ...Much above average to record heat building across the Pacific Northwest, while below average temperatures expected across large portions of the Plains.

Items in Pro Farmer’s First Thing Today include:

• Wheat leads gains ahead of USDA reports
• May crop reports out at noon ET
• Russia lowers wheat export tax
• Cash cattle prices weaken
• May hogs expire today

— Russia’s defense ministry denied that Ukrainian troops had made a breakthrough in the battle for Bakhmut. Reports suggest that Ukraine has recaptured land outside the eastern town. A broader counter-offensive against Russia is on hold, according to Volodymyr Zelenskyy, Ukraine’s president, until forces receive more deliveries of promised military aid. Britain confirmed that it has supplied Ukraine with long-range cruise missiles.

— China to send special envoy to seek ‘political settlement’ to Ukraine war. Former ambassador to Moscow will visit Kyiv, Russia and neighboring nations to promote peace talks. Link to more via the Financial Times.

— Ukraine grain-deal talks ended Thursday with an extension still in doubt, but Turkey says extension of Black Sea grain deal nearing. Parties to the Black Sea grain deal are nearing an extension after two days of talks between Ukrainian, Russian, Turkish and United Nations officials, Turkey’s Defense Minister Hulusi Akar said. But the Kremlin said there was nothing new to report on a possible renewal of the deal and a potential meeting between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdoğan wouldn’t help finalize an extension. Russia continues to insist on concessions for its grain and fertilizer exports before it would to an extension.

— The U.S. is open to overseas bargaining chips to trade with Russia in a deal to free jailed WSJ reporter Evan Gershkovich. The WSJ reports (link) that a multifaceted, multilateral exchange, which could include other Americans detained in Russia, could break some of the constraints that ensnared previous U.S. efforts to broker a deal with Moscow to free Paul Whelan, a Michigan corporate security executive held for more than four years.

— White House meeting between President Biden and congressional leaders to discuss lifting the debt ceiling has been postponed to early next week. Senate Minority Leader Mitch McConnell (R- Ky.) was unable to attend the Friday meeting because of a scheduling conflict. The delay will allow more time for the White House and congressional staff to make progress in their closed-door spending talks. White House congressional liaison Louisa Terrell met behind closed doors with House Speaker Kevin McCarthy (R-Calif.) chief of staff Dan Meyer and other aides for more than two hours yesterday afternoon.

On Tuesday, during their first substantial discussions since Feb. 1, the Democrats called on Republicans to lift the debt ceiling without preconditions, while the Republicans insisted on federal spending cuts. Treasury Secretary Janet Yellen has warned that the U.S. could face its first default in history if the debt limit isn’t raised by June 1.

Potential areas of compromise include clawing back unspent coronavirus relief funds, speeding up the permitting process for energy projects, and imposing spending caps. McCarthy offered a possible step toward a middle ground, saying that the GOP proposal to rescind $56 billion in unspent Covid funds could count toward the $131 billion in cuts Republicans are seeking under statutory spending caps. “We have $50-60 billion right there of the 131 that has been appropriated but for two years has sat there,” McCarthy said. “What if you bring that back to the taxpayers?”

An agreement to overhaul permitting is “doable,” Rep. Garret Graves (R-La.) said. Even if that succeeds, lawmakers still will have more work to do on permitting after the debt crisis is resolved, Graves said, such as incorporating the transmission buildout and siting provisions Democrats desire to jumpstart clean energy projects.

Both sides must give. “My guess is the president would have to spend less than he’d like,” Rep. Tom Cole (R-Okla.) said of the talks. “We would have to spend more than we like. There’s lots of provisions on permitting, work requirements, energy production that could be in the deal that produce more revenue over time.” Meanwhile, Sen. Chris Coons (D-Del.) said: “We’re going to pass a clean debt ceiling. We are going to avoid default and we will engage in conversations about budget and spending and appropriate path forward. That is my earnest hope.”

Senate Democrats don’t have the votes for a clean debt limit increase, so that option will have to be taken off the table for talks to prove fruitful, Rep. Cole said. “This isn’t a question of arguments. This is a test of will,” Cole said. “We did our job. They haven’t done their job in the Senate yet. We don’t run the Senate — they do. Can they pass a clean debt ceiling? No, they can’t. If they can’t pass one there, why would you think you would get one here?”

— White House meeting on new farm bill: nothing burger. All one needs to know about the “meeting” Thursday at the White House with President Joe Biden, USDA Secretary Tom Vilsack and the major ag panel leaders was that it looks like it was a meet-and-greet affair. Not bad on its surface, but… there are a lot of things to settle in Washington.

Joint statement released Thursday on the White House farm bill meeting: “Today, the four leaders of the Agriculture Committees had a conversation with President Biden and Secretary Vilsack on the importance of passing a bipartisan Farm Bill this year. The Farm Bill is a jobs bill. It is a safety net for farmers and consumers, and it is an investment in our rural communities and the health of the American people. The Agriculture Committees have a long tradition of bipartisan cooperation, and we look forward to continuing that tradition through our work on the 2023 Farm Bill.”

— U.S. and China have engaged in talks in Vienna on global security, seeking to defuse tensions and stabilize relations between the two countries, which have reached their lowest point since 1979. U.S. national security adviser Jake Sullivan and China’s top diplomat Wang Yi discussed a range of issues, including the U.S./China relationship, global security matters, Russia’s war against Ukraine, and Taiwan.

The talks were described as “candid, substantive, and constructive,” and the two sides agreed to maintain this strategic channel of communication, building on a previous engagement between President Joe Biden and President Xi in Bali in November 2022. Both leaders had agreed to set a “floor” under the relationship to ensure competition doesn’t escalate into conflict, especially with ongoing tensions over Taiwan.

Efforts to initiate high-level dialogue were hampered after a suspected Chinese spy balloon flew over North America and was shot down by the U.S. in February. This led to the cancellation of a planned visit by Secretary of State Antony Blinken to China. Blinken is now trying to reschedule his visit, and other U.S. officials, including Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo, are also attempting to arrange trips to Beijing.

China has been reluctant to schedule meetings due to concerns over an FBI report on the Chinese balloon incident. Beijing has also demanded the removal of sanctions on its defense minister, Li Shangfu, before agreeing to a meeting with US Defense Secretary Lloyd Austin.

Despite the ongoing difficulties, there are signs of improvement in relations, with meetings taking place between China’s foreign minister Qin Gang and U.S. ambassador Nicholas Burns, as well as the anticipated arrival of the incoming Chinese ambassador to the U.S., Xie Feng.

— China’s expanding use of ports to extend its economic and political influence is raising concerns in the U.S. and other countries. Chinese firms fully or partly own and operate 95 ports beyond the country’s borders. In a video report (link), the Wall Street Journal looks at how U.S. diplomats have been working to counter Beijing’s influence, but that effort has had mixed success. For Washington, China’s growing role in the ports business carries high stakes. American officials view China’s expanding network as an increasing security threat, posing significant economic and even military risk. They are concerned that China could build on its commercial relationships at ports to establish military sites, particularly at seaports facing the Atlantic. One major focus now is Equatorial Guinea, where the existing port already has the capacity for military vessels.

Of note: Germany’s government approved the 24.9% stake by China’s Cosco Shipping Ports in a Port of Hamburg container terminal.

— China’s economy is leaving behind its educated young people. “China is failing to adequately employ its youngest, best-educated generation of workers. Last year, Chinese unemployment for those between the ages of 16 and 24 reached 20% — a record high and more than double what it was in 2018. The job shortage is particularly acute for graduates with advanced degrees, people who had expected the most from the job market because their families had sunk up to a third of their income into their education. ... The consequences of reduced expectations among unemployed youth are profound. Members of the young generation increasingly are putting off getting married and starting a family, breaking the traditions of a Confucian society. In 2021, there were only 7.6 million new marriages registered, a 38% drop from 2015. Meanwhile, the birthrate has fallen to the lowest the country has ever seen,” the London School of Economics’ Keyu Jin writes in the WSJ (link).

— House Agriculture subcommittee urged to boost market promotion programs. More funding is needed to promote U.S. Agricultural exports, witnesses told the House Agriculture Subcommittee on Nutrition, Foreign Agriculture and Horticulture Thursday. They focused on programs like the Market Access Program (MAP) and Foreign Market Development (FMD) Program relative to the next farm bill. Other issues that surfaced included the need to push back against what witnesses said were unreasonable non-tariff trade barriers like Maximum Residue Limits (MRL) imposed by the European Union (EU) and other trade partners, and EU geographical indications (GIs).

— The nation’s coal-fired power plant fleet is projected to decline by more than half by 2050, according to the U.S. Energy Information Administration, as aging fleets are replaced by new plants powered by natural gas and renewable energy and as environmental regulations make it more costly to operate the facilities. Meanwhile, the combined capacity from solar and wind power generation is expected to more than triple by 2050. Link for details via Reuters.

— The Biden administration’s climate rules are expected to lean partly on carbon capture technology, despite unmet promises. New limits on greenhouse gas emissions from the Environmental Protection Agency announced this week are part of the administration’s pursuit of a carbon-free electricity grid, the WSJ reports (link). Only one commercial power plant in North America is currently operating with carbon capture. Its experience hasn’t been as smooth—or climate-friendly—as proponents of the rules might hope.

— SCOTUS ruling on California Prop 12 blow to U.S. hog industry. Link to our special report.

In brief: Justice Neil M. Gorsuch, writing for the court, said the Constitution leaves it to states and their voters to decide on the products that will be sold there. He said these questions should not be decided by federal judges. “Companies that choose to sell products in various states must normally comply with the laws of those various states,” he said. “While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list.”

The decision split the court along unusual lines. Joining Gorsuch were Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan and Amy Coney Barrett. Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito, Brett M. Kavanaugh and Ketanji Brown Jackson dissented in part. They would have given the pork producers another chance to try to prove that California’s restrictions put a substantial burden on the free flow of interstate commerce.

But Gorsuch argued the court did not have such authority to second-guess the states and their voters, especially when there was no claim of protectionism. The pork producers from Iowa and North Carolina “do not allege that California’s law seeks to advantage in-state firms or disadvantage out-of-state rivals,” he said. The state law applies equally to both. Moreover, the Constitution gives Congress, not the justices, the power “to regulate commerce among the states.” he said. The pork producers “have failed — repeatedly — to persuade Congress to use its express Commerce Clause authority to adopt a uniform rule for pork production,” he wrote. Only then did they take their claims to the federal courts, he said.

Gorsuch said some states ban the sale of horse meat. Some restrict the sale of fireworks. Federal judges have no authority to strike down such state bans on the grounds that they restrict interstate commerce, he concluded.

The court’s conservatives previously have been divided over striking down state laws that interfere with interstate commerce. Gorsuch and Thomas said the court does not have that power, while Roberts, Alito and Kavanaugh took a more pro-business view.

Barrett said she agreed with Gorsuch that the “moral” views of the state’s voters should be respected. “California’s interest in eliminating allegedly inhumane products from its markets cannot be weighed on a scale opposite dollars and cents,” she wrote, “at least not without second-guessing the moral judgments of California voters or making the kind of policy decisions reserved for politicians.” Analysts say that principle may figure in future cases on abortion pills or contraceptives. Before Thursday’s ruling, legal experts said a decision upholding California’s animal welfare law would bolster conservative states that seek to block the mailing or distribution of abortion pills.

— When will California’s Prop 12 provisions take effect for pork? Attention now also shifts to the actual implementation of Proposition 12 regarding pork. A California superior court judge in December extended a delay in enforcing the law in California given the pending Supreme Court decision. In that ruling, the judge said enforcement would not take place until July 2023, pending the outcome of the Supreme Court’s ruling.

— Farm-state lawmakers push back on SCOTUS Prop 12 ruling. Sen. Roger Marshall (R-Kan.) said he plans to reintroduce the Exposing Agricultural Trade Suppression (EATS) Act that would preempt state and local governments from “interfering with the production or manufacture of agricultural products in other states.” House Ag Committee member Randy Feenstra (R-Iowa), who represents the nation’s top pork-producing district, vowed to work to repeal Prop 12. “Quite frankly, California liberals have no jurisdiction over how Iowa farmers raise our hogs,” Feenstra said in a statement. “We simply can’t allow radical state laws to dictate the agricultural practices of the rest of the nation, especially in a way that will only increase food costs for the food insecure and drive farmers and ranchers out of business,” Marshall said in a statement.

— South Korea discovers FMD. South Korean authorities have ordered the culling of several hundred cattle and put in place biosecurity measures after confirming cases of foot and mouth disease (FMD) on farms in a central province, the ag ministry said. The cases mark the first confirmed outbreak since January 2019.

— Ron DeSantis blocks his travel records from public view. The Florida governor approved a law yesterday that bars state agencies from sharing security and travel information. Critics say the move is designed to prevent damaging information about his trips from being revealed as he is set to join the Republican race for president.

— Donald Trump reveled in the chance to reach a wider audience on CNN this week, but he didn’t broaden his message, the Wall Street Journal reports. “The former president’s punchy performance in a live town hall thrilled supporters, repelled his critics — who questioned whether he could win a general election with such a message — and underscored his front-runner claim to the 2024 Republican presidential nomination.”

— House Republicans pass border security bill. The measure would crack down on unlawful immigration, blowing past solid Democratic. Republicans timed approval of the measure, which has no chance in the Democratic-led Senate, to spotlight their hardline stance on immigration just as President Biden is facing a potential border surge with Thursday night’s expiration of Title 42, the pandemic-era rule allowing for swift expulsion of migrants. House Speaker Kevin McCarthy (R-Calif.) called the package “the strongest border security bill this country has ever seen,” saying in a speech on the House floor that “meanwhile, we are seeing a very different record from President Biden.” On Fox News, McCarthy said Biden treated the border situation “like he has treated the debt limit. He has ignored the problem.”

— The Senate yesterday passed two resolutions that would overturn the Biden administration’s protections for endangered species. Senators voted 51-49 to approve the first resolution, which would repeal a rule broadening the definition of critical habitat under the Endangered Species Act. Sens. Joe Manchin (D-W.Va.) and Angus King (I-Maine) voted with Republicans to support the measure, which Sen. Cynthia M. Lummis (R-Wyo.) introduced using the Congressional Review Act. Senators also voted 51-49 to pass a separate resolution from Sen. Markwayne Mullin (R-Okla.) that would repeal the endangered listing for the northern long-eared bat. The U.S. Fish and Wildlife Service listed the species as endangered last year, saying white-nose syndrome has decimated its population.

President Joe Biden has vowed to veto both measures if they reach his desk.

— Senators introduce CRP Reform Act. Sens. Cory Booker (D-N.J.) and Chuck Grassley (R-Iowa) introduced a bill to reform the Conservation Reserve Program (CRP) to focus future enrollments on marginal farmland rather than prime farmland. The CRP Reform Act (link) would set and maintain CRP’s overall acreage cap at 24 million acres for fiscal years 2024-2028 with an emphasis on enrolling marginal land. The senators said the bill would increase incentives to enroll marginal farmland through the continuous enrollment and grasslands categories, eliminate barriers to re-enrollment, and extend maximum contract lengths to 30 years. The senators want the CRP Reform Act to be considered as part of the Conservation Title of the new farm bill. Link to one-page summary.

— Cotton AWP moves higher. The Adjusted World Price (AWP) for cotton moved up to 67.97 cents per pound, effective today (May 12), rising for a second straight week. However, the AWP remained under 70 cents per pound for the third straight week despite the rise.

— Biden proposes rule on foreign land purchases near military bases. The Biden administration recently published a proposal (link) to expand the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to include foreign acquisitions of real estate within 100 miles of additional U.S. military bases. Sen. John Hoeven (R-N.D.) issued a statement supporting the Biden administration’s proposal to expand CFIUS jurisdiction.

Military installations covered by the proposed rule include:

• Air Force Plant 42, Palmdale, Calif.
• Dyess Air Force Base, Abilene, Texas
• Ellsworth Air Force Base, Box Elder, S.D.
• Grand Forks Air Force Base, Grand Forks, N.D.
• Iowa National Guard Joint Force Headquarters, Des Moines, Iowa
• Lackland Air Force Base, San Antonio, Texas
• Laughlin Air Force Base, Del Rio, Texas
• Luke Air Force Base, Glendale, Ariz.

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