U.S. Complaint Over Canadian Dairy Access Nixed by USMCA Panel

White House stalls E15 expansion plans | Black Friday key test of consumers | China’s economy

MARKET FOCUS

• New Chinese stimulus efforts aim at shoring up nation’s embattled real estate sector
• AI research warning
• Investing in Mexico
• Dollar selling
• Crypto-yuan threatens U.S. dollar dominance
• Japan’s inflation rate highest in three months
• Oil prices fell as discord within OPEC+ led to a delay in upcoming meeting
• EC fines Dutch lender Rabobank for involvement in bond trading cartel
• Ag markets today
• USDA daily export sales:
  — 129,000 MT to China & 323,400 MT to unknown destinations — for 2023-24 MY
• Holiday demand news
• Pork stocks fall more than average; beef stocks rise more than normal
• Argentine grain trade ‘paralyzed’
• Exchange: Argentine soybean crop one-third planted and in generally good shape
• NWS weather outlook
• Pro Farmer First Thing Today items

ISRAEL/HAMAS CONFLICT

• First truce went into effect on Friday morning
  

RUSSIA & UKRAINE

• Russian bank seeks U.S. license for UN climate payments
• Finland decides to close all but one of its border crossings with Russia
• Russian and Chinese executives held secret talks on building a tunnel to Crimea
• Plans to again change Ukrainian grain trading rules concerning to exporters
• Russia cuts wheat export tax
  

CHINA

• Beijing plan to enhance public services in key ag regions to support food security
• China’s Zhongzhi firm reveals severe insolvency issues
• China imports Canadian durum wheat for first time
• China to buy third batch of pork for state
• Hong Kong finds second recent case of ASF near mainland China
• Xi tolerance for property pain nears limit as rescue emerges
  

TRADE POLICY

• U.S. complaint over Canadian dairy access rejected by USMCA panel
• U.S./EU trade meeting set for next month likely postponed to early next year
  

ENERGY & CLIMATE CHANGE

• IEA urges oil and gas companies to boost investment in energy transition
• Biden administration set to regulate Chinese EV components
• White House stalls E15 expansion plans
• Trump’s potential climate and energy policy shifts if re-elected
  

LIVESTOCK, NUTRITION & FOOD INDUSTRY

• USDA raised its forecast for food and grocery prices in 2024
• Iowa confirms another case of HPAI
  

HEALTH UPDATE

• Mysterious infections in China
  

POLITICS & ELECTIONS

• Argentina’s Javier Milei could be major game-ganger for the country… and its farmers
• Netherlands shifts right with populist Geert Wilders’ Freedom Party’s massive win

OTHER ITEMS OF NOTE

• North Korea deploys more troops and scraps tension-reducing pact with South Korea
• An iceberg more twice the size of London is on the move
• Flags to be lowered to honor Rosalynn Carter
• The day after Thanksgiving is the busiest day of the year for plumbers

— Equities today: Asian and European markets were mixed to lower in overnight trading. U.S. Dow opened up around 45 points. European stock markets were muted on Friday, with the STOXX 50 and STOXX 600 maintaining their positions at three- and two-month highs, respectively, as investors continued to assess the economic and interest rate outlook globally. Investors are digesting mixed economic data from Europe and new Chinese stimulus efforts aimed at shoring up the nation’s embattled real estate sector. In Asia, Japan +0.5%. Hong Kong -2%. China -0.7%. India -0.1%. In Europe, at midday, London -0.2%. Paris +0.2%. Frankfurt +0.2%.

The U.S. stock and financial markets close early today, due to the Thanksgiving holiday that was Thursday. Today is typically one of the quietest trading days of the year.

U.S. equities Wednesday: Stocks went into the Thanksgiving holiday with gains and will have an abbreviated session today which is expected to see extremely light volume given that many traders will opt for an extended holiday weekend. On Wednesday, the Dow was up 184.74 points, 0.53%, at 35,273.03. The Nasdaq rose 65.88 points, 0.46%, at 14,265.86. The S&P 500 gained 18.43 points, 0.41%, at 4,556.62.

— AI research warning. OpenAI researchers wrote a letter warning about a powerful AI discovery that posed a potential threat to humanity. The nature of this discovery wasn’t explicitly mentioned but seemed to relate to a new AI model referred to as “Q*,” which had the ability to solve certain mathematical problems, albeit at a grade-school level. The concern raised by researchers was that the Q* AI model displayed significant reasoning capabilities, even when dealing with relatively simple mathematical problems. This suggested that the model might have the potential to generalize and apply its reasoning abilities to more complex tasks, which could potentially be dangerous. CEO Sam Altman was ousted from his position, which may have been influenced by the concerns raised by the researchers regarding the AI discovery. After leaving OpenAI, Altman joined Microsoft. However, he later returned to OpenAI in response to the threat of over 700 employees quitting, indicating the significance of the AI discovery and the need to address potential risks responsibly.

— Agriculture markets Wednesday:

• Corn: December corn futures fell 1 1/4 cents to $4.68 3/4, a low-range close.
• Soy complex: January soybean futures fell 20 3/4 cents to $13.56 1/2. March soybean meal futures lost $5.70 at $424.10. March soybean oil futures closed down 68 points at 52.41 cents after hitting a four-week high early on. All three markets closed nearer their daily lows.
• Wheat: December SRW wheat rose 3/4 cents to $5.55 3/4, closing near the session low, while December HRW fell 1 1/4 to $6.14 1/2. December spring wheat fell 6 3/4 cents to $7.10 3/4.
• Cotton: March cotton rose 21 points to 80.90 cents, a high-range close.
• Cattle: February live cattle futures closed down 80 cents at $175.275 and near the session low. January feeder cattle futures lost $1.20 to $227.125 and nearer the daily low.
• Hogs: December lean hogs rose 10 cents to $68.275, following narrow trade.
  

— No overnight trade; abbreviated trading session today. There was no overnight grain trade due to the Thanksgiving holiday. Grain and livestock markets open at 8:30 a.m. CT and will close at 12:05 p.m. CT.

— Quotes of note:

• Oil production. Natasha Kaneva, JPMorgan’s head of global commodities strategy, said Saudi Arabia and Russia are likely to extend their cuts through the first quarter of 2024.
  
• Invest in Mexico. “I think it’s one of the great opportunities. … If you had to pick a country, Mexico might be the number one opportunity.” — Jamie Dimond, CEO of JPMorgan Chase. Mexico’s low market cap to GDP ratio highlights “a huge opportunity to have capital markets grow” in Mexico, the CEO said.
  
• Dollar selling. Investors are currently selling U.S. dollars at the fastest rate seen in a year, as they increasingly believe that the Federal Reserve has completed its tightening of monetary policy. Asset managers, who oversee a significant amount of funds, are specifically mentioned as being part of this trend. They are expected to reduce their open dollar positions by approximately 1.6% this month, according to State Street, which acts as a custodian for assets totaling $40 trillion. Analysts are cautioning that these current dollar sales may be indicative of a broader, longer-term trend among investors. This trend could involve a reduction in their exposure to U.S. assets as they anticipate a different monetary policy outlook.
  
• The Bank of England must hold firm in its battle against inflation, its chief economist told the Financial Times. Huw Pill said the central bank had to resist the temptation to “declare victory and move on” from its battle to quash inflation, as the 4.6% reading in October remained well above the bank’s 2% target.
  

— Japan’s inflation rate highest in three months. In October 2023, Japan experienced an annual inflation rate of 3.3%, which marked an increase from the previous month’s rate of 3.0%. This was the highest inflation rate recorded since July. Food prices increased by 8.6%, following a 9.0% rise in September. Notable price increases were seen in categories like furniture, culture, recreation, and food. However, the core inflation rate remained slightly below the central bank’s target, and certain sectors like housing, transport, clothing, and healthcare saw price decreases or easing inflation.

The rise fueled speculation that the Bank of Japan might soon tighten its ultra-loose monetary policy. Inflation has exceeded the central bank’s 2% target for 19 consecutive months. The BoJ maintains that higher prices are driven by higher global commodity prices and the weaker yen.

Market perspectives:

— Outside markets: The U.S. dollar index was lower. Nymex crude oil prices are lower and trading around $76.75 a barrel. The OPEC-plus meeting originally scheduled for this weekend has been moved back to next week, reportedly due to disagreements on whether to further cut the cartel’s collective crude oil production. The yield on the U.S. 10-year Treasury note edged higher to 4.48%, rebounding from two-month lows, as investors return from Thanksgiving to a shortened day of trading and bet interest rates will remain elevated for some time.

— Oil prices fell as discord within OPEC+ led to a delay in their upcoming meeting, which dampened speculation of further production cuts by the Saudi-led alliance. This delay comes as U.S. data revealed a significant increase in oil stockpiles. Global benchmark Brent oil dropped below $81 a barrel after a volatile session that saw prices fluctuate by over $4. The OPEC+ meeting, originally scheduled for November, will now take place at the end of the month, and will be held online. Crude is down about 16% from its September peak amid surprisingly strong American output, while China — the world’s biggest oil importer — has seen falling refining margins and faltering economic indicators.

The postponement of the meeting was due to disputes over quotas for African members, including Angola. There have been indications that oil production outside of the OPEC+ group is increasing, raising speculation about whether the cartel will extend or deepen production cuts. Europe is grappling with excess oil supplies due to weak demand and an influx of U.S. oil shipments.

Despite the delay and uncertainty, it’s expected that Saudi Arabia will continue its 1 million-barrel-a-day voluntary production cut into 2024, while other OPEC+ members are likely to stick to existing quotas through the next year.

Options markets have reacted to the uncertainty with traders paying higher premiums for contracts that profit from falling oil prices. This marks a contrast to a month earlier when the market was more bullish due to geopolitical tensions in the Middle East.

— Crypto-yuan threatens U.S. dollar dominance. A commentary item in the Financial Times (link/paywall) discusses the potential impact of crypto stablecoins, particularly those controlled by entities tied to the Chinese Communist Party (CCP), on the global financial system. The item was written by Jay Newman, who was a senior portfolio manager at Elliott Management and is the author of Undermoney and Richard Carty, who was managing director of Morgan Stanley Principal Strategies and is CEO of Bonanza Creek Energy. It highlights concerns that these digital assets, which operate outside traditional regulatory frameworks, could disrupt the existing greenback-based settlement system and challenge the pre-eminence of the U.S. dollar in international transactions. The article suggests that if these crypto stablecoins gain widespread acceptance, they could be used for both legitimate and illegitimate activities, allowing criminals to conduct business in dollars while bypassing regulatory oversight. Additionally, it points out that such digital assets could weaken the effectiveness of U.S. economic sanctions and restrictions imposed on countries and individuals, as transactions in these currencies would operate outside traditional regulatory controls. Overall, the article raises concerns about the potential geopolitical and economic implications of the growing use of crypto stablecoins controlled by entities like the CCP.

— European Commission has fined Dutch lender Rabobank €26.6 million ($28.9 million) for its involvement in a bond trading cartel. Traders at Rabobank and Germany’s Deutsche Bank were found to have exchanged commercially sensitive information on counterparties’ identities and trading intentions for euro-denominated sovereign, quasi-sovereign, and government agency bonds between 2006 and 2016. The commission noted that traders adjusted their trading strategies and price levels based on this information. Deutsche Bank avoided a larger fine of nearly €156 million ($169.7 million) after disclosing its role in the cartel through the commission’s leniency program. Rabobank expressed disappointment and may consider an appeal. The commission’s investigation began in May 2017, and both banks were informed of the preliminary view that they had breached EU antitrust rules in December 2022.

— USDA daily export sales:

• 129,000 MT to China & 323,400 MT to unknown destinations — for 2023-24 MY

— Holiday demand news: China purchased 66,000 MT of Ukrainian corn. South Korea purchased 52,000 MT of corn expected to be sourced from Brazil and tendered to buy up to 20,000 MT of optional origin non-GMO soybeans. Iran purchased 120,000 MT of corn from unspecified origins.

— Pork stocks fall more than average; beef stocks rise more than normal. USDA’s Cold Storage Report showed 444.3 million lbs. of beef in frozen storage at the end of October, up 23.5 million lbs. (5.6%) from September. The five-year average was a 12.2-million-lb. increase in beef stocks during the month. Beef inventories dropped 65.9 million lbs. (12.9%) from last year and were 48.8 million lbs. (9.9%) under the five-year average. Pork stocks stood at 435.9 million lbs., down 25.7 million lbs. (5.6%) from September. The five-year average was a 15.7-million-lb. decrease during the month. Pork inventories fell 73.8 million lbs. (14.5%) from year-ago and were 80.5 million lbs. (15.6%) below the five-year average.

— Argentine grain trade ‘paralyzed’. Argentina’s grain trade is largely “paralyzed” by a lack of soybeans due to drought and farmers holding onto produce, anticipating a devaluation of the peso under President-elect Javier Milei, the head of the main export chamber told Reuters. The comments were the first from the crushing and export body CIARA-CEC, which represents major grains firms in Argentina, including Cargill and Bunge, since the election of Milei on Nov. 19. He takes office on Dec. 10. While the government has rolled out preferential exchange rates for farmers, many are waiting to see what Milei does when he takes office. He has pledged to scrap the currency controls and cut taxes.

— Exchange: Argentine soybean crop one-third planted and in generally good shape. The Buenos Aires Grain Exchange estimated 34.8% of Argentina’s soybean crop was planted as of Thursday, with “good emergence and growth” noted. Corn planting stood at 26.2%, with the exchange rating the crop 29% excellent, 67% good and 4% poor.

— NWS weather outlook: Heavy snow and gusty winds will foster hazardous travel conditions for portions of the northern and central Rockies into the central Plains this holiday weekend... ...Temperatures will be below average for most of the country this weekend, with the greatest anomalies and some frigid conditions in the central Plains.

— First truce since the war between Israel and Hamas erupted last month went into effect on Friday morning. The deal came after complex talks brokered by Qatar, the U.S. and Egypt. The halt in fighting is intended to last for four days. Hamas, an Iran-backed militant group, is meant to return 50 of the almost 240 hostages it captured from Israel, while the Israelis will release 150 jailed Palestinians and allow more aid into Gaza.

Meanwhile the Financial Times reported that Israeli intelligence had ignored a detailed warning of the Oct. 7 attack weeks before it took place.

— Russian bank seeks U.S. license for UN climate payments. Sovcombank, a Russian private lender, has sought approval from the U.S. Treasury for a license that would enable them to contribute membership payments to a United Nations climate funding program, according to Reuters (link). This request comes as the bank faces sanctions from the United States that restrict its activities.

— Finland decided to close all but one of its border crossings with Russia to stop an increase in asylum-seekers. The Finnish government has accused Russia of directing migrants towards the border as a part of what they describe as “hybrid warfare” against Finland, particularly since Finland joined NATO in April. However, the Kremlin denies these allegations. Over 600 people, including many from Somalia and Syria, have entered Finland through Russia this month, a significant increase compared to the few dozen who did so in September and October.

— Russian and Chinese executives held secret talks on building a tunnel to Crimea, the Washington Post reports (link), citing emails intercepted by Ukraine. They indicate business executives were negotiating plans for an underwater tunnel connecting Russia to Crimea. Why? Ukraine has twice bombed the existing bridge from Russia to Crimea. These talks underscore Russia’s determination to keep hold of the territory it annexed in 2014.

— Plans to again change Ukrainian grain trading rules concerning to exporters. Ukrainian traders’ union UGA said parliament’s “ill-considered” plans to change grain trading rules could completely halt Ukraine’s key grain exports. On Nov. 21, a bill passed its first reading in parliament that would change rules on the taxation of grain export transactions and could also introduce minimum export prices for grain. The bill is designed to minimize tax evasion on certain agricultural products, such as grain and oilseeds. UGA noted that some of the new requirements are impossible to fulfil and others may result in significant losses for both traders and farmers. UGA said the bill proposed that minimum export prices should not be lower than the average grain prices quoted on international exchanges for the previous 10 days, which the group called “unenforceable, as at some point the minimum export price from Ukraine set by this mechanism will exceed the real prices on the world market.”

— Russia cuts wheat export tax. Russia’s wheat export tax for Nov. 29-Dec. 5 will be 3,820.2 rubles ($42.94) per metric ton based on an indicative price of $253.70. That’s down from a rate of 4,395.4 rubles per metric ton the previous week and the second straight weekly decline.

— Beijing unveils plan to enhance public services in its key agricultural regions to support food security. The National Development and Reform Commission (NDRC) recently published an action plan aimed at increasing the capacity of public services, such as education and healthcare, in “major grain-producing counties,” says Trivium China.

Background: Every year, Beijing designates approximately 800 “major grain-producing counties” and provides them with additional fiscal funds as incentives. The new action plan has a specific goal: to ensure that these counties, which play a crucial role in national food security, have sufficient public service infrastructure and staff to operate them. The plan emphasizes that residents should not have to leave their counties to access education or healthcare services.

Pilot initiatives are scheduled to commence in Inner Mongolia, Heilongjiang, Jilin, Anhui, and Henan provinces in 2024. By 2030, all major grain-producing counties across China are expected to benefit from these improvements in public services.

One of the key objectives of this initiative is to counteract the issue of “brain drain,” which is a common problem in rural areas worldwide, including China. By offering better public services, China aims to incentivize talented individuals to stay in these regions rather than moving away in pursuit of better opportunities. This retention of skilled workers can lead to the availability of experienced managers and technicians, which in turn can support the growth of larger agribusinesses in these areas.

— China’s Zhongzhi firm reveals severe insolvency issues. Zhongzhi, a major private-wealth management firm in China, informed its investors that it is facing severe insolvency issues. The shadow bank disclosed liabilities amounting to approximately 460 billion yuan ($64.8 billion) and a shortfall of as much as $36.4 billion, but possesses tangible assets totaling only 200 billion yuan ($28.2 billion). This financial imbalance is a result of Zhongzhi’s exposure to the troubled Chinese property sector and comes amidst a wider regulatory crackdown on shadow banking activities in China. The company blamed the shortfall on the departure of “multiple senior executives and key personnel” and the 2021 death of founder Xie Zhikun.

— China imports Canadian durum wheat for first time. China’s state-run food company COFCO Group said it had imported Canadian durum wheat for the first time, which it would process into flour. China mainly imports finished pasta or flour processed from durum wheat. China has already imported almost 2 MMT of durum wheat from Canada this year, according to customs data.

— China to buy third batch of pork for state stockpiles. China will buy a third batch of pork for its state reserves this year to support declining pig prices, state planner the National Development and Reform Commission (NDRC) said, with specifying an amount. To ensure a stable supply of the pork market and promote a reasonable recovery in pig prices, NDRC will start the purchase and storage of the third batch of central pork reserves within the year.

— Hong Kong finds second recent case of ASF near mainland China. Hong Kong has ordered the culling of around 1,900 pigs after confirming a second case of African swine fever (ASF) in a month. The licensed pig farm at Lau Fau Shan, in the rural Yuen Long area near the border with mainland China, tested positive for the ASF virus. Earlier this month, authorities ordered the culling of around 5,600 pigs after detecting an ASF outbreak at a farm in Yuen Long. It was not immediately clear if the second case was found at the same farm or a different one.

— Xi tolerance for property pain nears limit as rescue emerges. China is ramping up pressure on banks to support struggling real estate developers, signaling President Xi Jinping’s tolerance for property sector pain is nearing its limit. Link to more via Bloomberg.

— U.S. complaint over Canadian dairy access rejected by USMCA panel. A trade dispute settlement panel established under the United States-Mexico-Canada Agreement (USMCA) has rejected a complaint filed by the United States against Canada. The complaint pertained to Canada’s alleged improper limitation of access to its dairy market. Highlights:

• U.S. Complaint: The United States had accused Canada of not fulfilling its obligations under the 2020 USMCA to open its dairy market to foreign producers. The U.S. claimed that Canada was not providing adequate access to its market.
• Panel’s Decision: A three-person independent panel was convened to address this dispute. The panel ruled that Canada had not acted unreasonably in its handling of dairy market access, effectively dismissing the U.S. complaint. Their report was released on Friday (Nov. 24).
• U.S. Response: U.S. Trade Representative (USTR) Katherine Tai expressed disappointment with the ruling, emphasizing the U.S.’ continued concerns regarding Canada’s implementation of dairy market access commitments under the agreement. She stated that the U.S. would use all available tools to enforce trade agreements.
• Canada’s Response: Canada’s Trade Minister Mary Ng expressed satisfaction with the dispute settlement panel’s findings, noting that all outcomes were in favor of Canada. She welcomed the decision.
• House Ag leaders’ statement: House Agriculture Committee Chairman G. T. Thompson (R-Pa.) and Ranking Member David Scott (D-Ga.) said: “We are disappointed in today’s announcement and the decision of the dispute panel. It is critical the U.S. encourage and enforce USMCA, and this decision allows Canada to continue their questionable protectionist practices that disallow fair access to Canadian markets. We appreciate Ambassador Tai and the Biden Administration’s continued pursuit to ensure fair market access for U.S. dairy producers.”

Background: In a previous USMCA panel decision in January 2022, Canada was found to have violated the agreement by not opening its domestic market enough. Following that decision, Canada amended its policies. The USMCA retained Canada’s supply management system, which limits domestic production of dairy, eggs, and poultry to support dairy farmers and protect them from import competition through high tariffs.

Bottom line: Before taking the role of USTR, Tai was a major writer of the USMCA enforcement action language. The most recent U.S. trade policy loss again signals that the U.S. trade lawyers were again found wanting.

Of note: The dairy sector is politically influential in Canada, with many farmers operating in Quebec and Ontario, provinces with a significant number of parliamentary seats.

— U.S./EU trade meeting set for next month likely postponed to early next year. The scheduled trade meeting between the U.S. and EU, which was set to occur next month, is likely to be postponed to early next year. The delay is primarily due to an ongoing deadlock in negotiations concerning steel and critical minerals trade. Key developments:

• Trade Meeting Delay: The trade meeting, originally planned for the upcoming month, is now expected to be pushed to the early months of the following year.
• Steel and Critical Minerals Dispute: The main point of contention in these trade talks revolves around steel and critical minerals. Both sides have differing views on how to handle these issues.
• U.S. Position: The United States is seeking to maintain the existing trade arrangements for steel and aluminum for an additional two years. Essentially, they want to continue the current trade status without significant changes.
• EU Position: The European Union is advocating for changes to the existing trade arrangement, asserting that it is unfair and cumbersome. The EU is looking for modifications that it believes will address these perceived issues.

— IEA urges oil and gas companies to boost investment in energy transition. The International Energy Agency (IEA) released a new report (link) emphasizing the need for oil and gas companies to increase their financial commitment to the energy transition or risk falling behind in the journey toward net-zero emissions. The report dismisses the idea that relying solely on carbon capture is a viable solution, labeling it as an “illusion.” IEA’s executive director, Fatih Birol, highlights the necessity of acknowledging that successful transitions to clean energy entail a significant reduction in the demand for oil and gas. Consequently, oil and gas operations will need to be scaled back over time.

Of note: The report underscores that less than 1% of investments in clean energy currently come from oil and gas companies. The report comes ahead of next week’s UN COP28 summit in Dubai, where the phaseout of fossil fuels will be a key issue among world leaders.

— Biden administration set to regulate Chinese EV components. The Biden administration is on the verge of issuing crucial regulations regarding the sourcing of Chinese components for electric vehicles (EVs). These regulations are related to the Inflation Reduction Act (Climate Bill), a key climate law signed by President Biden, which extends tax credits for EVs to help the U.S. reach its goal of having 50% of all new vehicle sales as electric by the end of the decade.

However, these tax credits come with conditions. Beginning in January 2024, to qualify for the full tax credit, EVs cannot contain battery parts sourced from a “foreign entity of concern,” which includes China.

The rule will also encompass critical minerals the following year.

Striking the right balance is crucial, as overly lenient rules could risk domestic industry and supply chain vulnerabilities, while overly strict ones might hinder the U.S. electric vehicle rollout. There is a debate between proponents of stringent requirements and those favoring a more flexible approach.

Supporters of strict regulations, including some domestic manufacturers and Sen. Joe Manchin (D-W.Va.), argue for the strictest metrics possible, citing recent Commerce Dept. rules for semiconductor subsidies as a model. However, others, advocate for strict enforcement but believe that projects should be evaluated on a case-by-case basis.

A strict ruling could impact Chinese licensing agreements, U.S. subsidiaries of Chinese companies, and Chinese joint ventures, potentially disqualifying them from the tax credit. This includes projects like Ford’s factory in Michigan and Chinese battery company Gotion’s Midwest factories, which have been contentious in U.S./China relations.

Some say a hardline stance on China might impede the U.S. electric vehicle rollout and that collaboration between U.S. and Chinese industry players can facilitate technology and knowledge transfer.

Bottom line: This move is part of the Biden administration’s strategy to compete with China’s technological and manufacturing dominance in the EV sector.

— White House stalls E15 expansion plans. The White House is stalling action on requests by Farm Belt states to allow regional sales of gasoline blended with higher volumes of ethanol after oil industry warnings that the move could cause regional supply disruptions and price spikes, two sources familiar with the matter told Reuters. Governors from eight Midwestern states — Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin — petitioned EPA last year to let them sell E15 gasoline year-round. The sources said the White House decided to delay action on the matter following the oil industry’s warnings in part because of concern that higher pump prices in certain states could hurt President Joe Biden’s re-election chances.

— Trump’s potential climate and energy policy shifts if re-elected. Donald Trump is reportedly planning significant changes to U.S. climate and energy policy if he is re-elected as president. His agenda includes dismantling President Joe Biden’s climate law, boosting investment in fossil fuels, and rolling back regulations aimed at promoting the transition to electric vehicles. Trump’s senior campaign officials and advisers have outlined his intention to prioritize fossil fuel production in his second term. Additionally, Trump aims to target the Inflation Reduction Act (IRA/Climate Bill), a key component of Biden’s economic strategy that offers around $370 billion in tax incentives and subsidies for clean energy. The former president has criticized this act, referring to it as the “biggest tax hike in history.” He has blamed Biden’s climate policies for increasing gasoline prices and undermining what he perceives as his prior achievement of achieving U.S. “energy independence.”

— USDA raised its forecast for food and grocery prices in 2024, with all food prices expected to increase by 2.9%, restaurant prices by 4.3%, and grocery store prices by 1.6%. While these increases are lower than those seen in 2023, they remain above the 20-year averages for all food and restaurant prices.

In 2023, USDA forecasts food price inflation to be at 5.8%, with restaurant prices rising 7.1% and grocery prices increasing by 5.2%.

Food categories: USDA’s forecast for 2013 indicates that only pork prices will decrease by 0.4%, following an 8.7% rise in 2022. The outlook for pork prices started at a 0.4% increase in 2023, and decreases have been expected since the USDA’s October 2022 outlook. The 20-year average for pork prices shows an increase of 2.6%.

In 2023, the largest price increases were observed in beef at 4%, other meats at 4.6%, fats and oils at 9.3%, processed fruits and vegetables at 8.5%, sugar and sweets at 8.9%, cereals and bakery products at 8.5%, non-alcoholic beverages at 7.2%, and other foods at 6.8%. All of these 2023 increases surpass their respective 20-year averages.

Looking ahead to 2024, egg prices are projected to fall by 14.7% after a 0.4% increase in 2023 and a significant 32.2% rise in 2022. Dairy products are also expected to decline by 0.6% in 2024, following a 4% increase in 2023 and a 12% increase in 2022. The 20-year average for eggs is 4.7%, while dairy products have an average increase of 2.3%.

Fresh vegetables are the only other food category in the current forecast expected to see a decrease, with a decline of 0.5% in the outlook for 2024, following a 0.9% increase in 2023 and a 7% increase in 2022.

Bottom line: The data suggests that consumers are still paying considerably more for food than they were before the pandemic, which could lead to changes in consumer behavior if sustained over a lengthy period.

— Iowa confirms another case of HPAI. Iowa’s Department of Agriculture confirmed an outbreak of highly pathogenic avian influenza (HPAI) in a commercial layer flock in Sioux County. Since October, this was the 15th outbreak of HPAI in either commercial or backyard flocks impacting 11 counties in Iowa.

— China provides WHO requested info on child pneumonia surge. The World Health Organization (WHO) formally asked China for information regarding a surge in reported clusters of pneumonia cases in children. There have been reports indicating that hospitals in northern China are experiencing a high number of cases. Chinese authorities have attributed this increase in respiratory illnesses to the relaxation of strict Covid-19 measures. It’s worth noting that the SARS-CoV-2 virus, responsible for Covid-19, was initially identified in China.

Chinese health authorities arranged a teleconference with the WHO on Thursday to provide the requested data, the U.N. agency said in a subsequent statement, indicating that the clusters came from known pathogens. Chinese authorities said they have neither detected “any unusual or novel pathogens” or unusual symptoms in patients, nor experienced patient numbers that exceed hospital capacities, according to WHO.

— Argentina’s radical new pro-U.S. leader Javier Milei could be a major game-ganger for the country… and its farmers. For a start, the new president wants Argentina out of trade blocs such as BRICS and Mercosur, and to cut ties with socialist or communist states including China. Milei’s campaign included several significant promises that could reshape Argentina’s foreign relations and impact the global geopolitical landscape. Here are some key positions according to Abishur Prakash, founder of The Geopolitical Business, an advisory firm in Toronto:

• Change in Argentina’s Relations with China: Milei pledged to cut ties with “socialist countries” such as China. This move could create a significant roadblock for China’s efforts to deepen its influence in the region.
• Exit from Mercosur: Milei called for Argentina to exit Mercosur, a regional trade bloc with Brazil, Uruguay, and Paraguay. This decision, if implemented, could strain Argentina’s relationship with Brazil, the region’s largest economy, and risk dividing Latin America as other nations may need to choose sides or adopt a similar approach.
• Closer Relations with the United States: Milei pledged closer relations with the United States. This shift could move Argentina closer to the Western world and align it with like-minded nations, potentially making Argentina a new beachhead of the West in Latin America.
• Argentina’s Changing Attitudes Towards Common Approaches: Milei’s government believes in unilateral deals over common approaches. This mindset is reflected in Argentina’s rejection of BRICS membership, potentially affecting the dynamics of this emerging global grouping.
• Impact on Global Consensus: Milei’s election is seen as part of a global shift in questioning the effectiveness of the current geopolitical status quo. His ideas could inspire other nations to challenge the existing order, creating a domino effect of dissatisfaction with the world’s functioning.
• Fragmentation of the Region: Milei’s push to reassert Argentina’s sovereignty and national borders may fragment an already fragile region, with China potentially being excluded, and the United States becoming more involved.
• Rapid Redesign of Trajectories: The article emphasizes that global changes are happening at an accelerated pace, with new national politics reshaping the alignment, allegiances, and attitudes of countries in unexpected ways.

Of note: Other analysts say some of Milei’s ideas have constitutional problems. Others, they say, will likely face challenges via the country’s Supreme Court.

Also: Union leaders in Argentina’s aviation industry said they will fiercely resist Milei’s plans to privatize state airline Aerolíneas Argentinas. The hard-left Unidad Piquetera social movement announced plans to lead a march through downtown Buenos Aires to oppose Milei’s austerity plans.

— Dutch far-right leader Geert Wilders wins election. Geert Wilders, the Dutch far-right leader known for his strict anti-immigration and anti-Islam policies, secured a significant electoral victory in the Netherlands. His party, the Freedom Party (PVV), is projected to win 37 out of 150 seats in the Dutch parliament, putting him in contention for leadership and the position of prime minister. The PVV has vowed to halt all immigration to the Netherlands and has advocated for closing mosques and banning the Quran. The influx of migrants has caused concerns over housing shortages and strained resources in the Netherlands, prompting more conservative voters to call for stricter immigration controls.

Of note: Geert Wilders’ electoral success may reshape the Netherlands’ approach to the European Union (EU) and other EU member states. Under outgoing Prime Minister Mark Rutte, the Netherlands moved away from its traditional stance of opposing deeper EU integration. However, a government led by Wilders could pose challenges to the EU and fellow member states. Also, Wilders’ victory has implications for European policies towards Ukraine, as he has expressed opposition to sending more weapons to Ukraine, diverging from the Rutte government’s position and potentially challenging the pro-Ukraine policies of the continent.

— North Korea deploys more troops and scraps tension-reducing pact with South Korea. North Korea declared its intention to deploy additional troops along the border with South Korea and announced that it will no longer consider itself bound by a military agreement aimed at reducing tensions between the two nations. South Korea partially suspended this agreement, which included measures such as ending military exercises near the border, in response to North Korea’s assertion of launching a spy satellite. This development raises concerns about escalating tensions on the Korean Peninsula.

— An iceberg more twice the size of London is on the move after more than 30 years stuck to the ocean floor. The world’s largest iceberg, which at around 4000-square-kilometres (1,544 square miles) is on the move again. The A23a iceberg broke off the Antarctic in 1986, but was promptly grounded. Scientists expect the iceberg to drift to the South Atlantic Ocean, where it will melt away.

— Flags to be lowered to honor Rosalynn Carter. President Biden’s order calls for flags to fly half-staff from Saturday through sunset on Wednesday, Nov. 29, the day Carter will be buried in Plains, Ga., the hometown she shared with former president Jimmy Carter.

— The day after Thanksgiving is the busiest day of the year for plumbers. “For many of us, the day after Thanksgiving is primarily known as Black Friday — the kick-start to the winter holiday shopping season. But for workers in one industry, it goes by a slightly different moniker: Brown Friday. The nickname comes from the high number of service calls plumbers receive the day after a holiday that strains people’s waistbands and kitchen sinks. Many plumbers say that Friday following Thanksgiving is twice as busy as any other day of the year.” Link for more via Interesting Facts.

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