Will ‘Paper Agreement’ to Unleash 18 MMT Ukraine Grain Shipments be Implemented?

Australia finds traces of FMD, ASF

Turkish officials said a deal had been reached between Ukraine and Russia that would allow millions of tons of Ukrainian grain to be exported, alleviating a global food shortage. The agreement will reportedly be signed this morning. But as we noted in Thursday’s Policy Updates, there are several lingering questions even if an agreement is signed. Substantial differences had remained in recent days over providing safe passage for cargo vessels, including how to determine ports and assure that private vessels aren’t carrying military equipment. Enforcement will also be key, as well as how to prevent threats of further attacks. Update is in Russia/Ukraine section.

Impact: An agreement on Ukraine grain could potentially free up about 18 million tons of wheat, corn and other supplies that war has prevented Ukraine from exporting. Meanwhile, wheat prices dropped to pre-war levels after news about the deal to unblock shipments. Also, besides freeing up grain that is currently trapped in Ukraine, there is a challenge of how to store or export the country’s coming summer harvest of an estimated 65 million tons. An agreement will also have to be strong enough to convince sea crews, privately owned freighters and their insurers who may be fearful to wade into the current environment.

Australia finds traces of FMD, ASF. Australia found viral fragments of food-and-mouth disease (FMD) and African swine fever (ASF) on imported food products from China, officials said, according to a Bloomberg account. While tests did not indicate a live virus, authorities are concerned about potential outbreaks that could devastate the country’s livestock industry. Australia comprises 13% of world beef trade. If the products were indeed from China, it would indicate the country has FMD, which could lead to even more Chinese imports of U.S. beef.

Biden tested positive for Covid after trip to the Middle East. He has mild symptoms and will isolate in the White House while continuing to work. White House Press Secretary Karine Jean-Pierre told reporters Thursday that it doesn’t matter where President Joe Biden contracted Covid-19, but instead that the White House was “prepared for this moment.”

Russia’s Ukraine war effort is running “out of steam” and Russia has lost its ability to spy in Europe “by half,” according to the chief of Britain’s foreign intelligence service. “I think our assessment is that the Russians will increasingly find it difficult to supply manpower material over the next few weeks,” Richard Moore, the head of MI6, told CNN. “They will have to pause some way and that will give the Ukrainians opportunities to strike back.”

U.S. mortgage rates rose for the second straight week to 5.54% for a 30-year fixed-rate mortgage.

Germany’s economy is shrinking for the first time this year as inflation squeezes businesses and households and the war in Ukraine destroys confidence. A gauge of private-sector activity by S&P Global dropped to the lowest in 25 months in July.

The impasse at the Port of Oakland is deepening as shippers warn their businesses are starting to feel the pain. California is holding firm against truckers protesting a new employment law, who this week shut down most operations at the Port of Oakland. Meanwhile, freight rail service is deteriorating as the sector’s labor tensions simmer.

Warehouses may have to do double-duty as power providers as the push toward electric vehicles picks up. Meanwhile, Rivian Automotive began delivering the first of 100,000 electric cargo vans that Amazon has ordered.

European researchers formulated a fossil fuel-free synthetic jet fuel from carbon dioxide, solar energy and water in a technological advancement that could significantly alleviate air travel’s 4% contribution to global warming.

Commerce Dept. is probing Huawei towers near U.S. military sites. Meanwhile, a group of Republican senators wrote to the heads of the U.S. Treasury and Defense departments last week requesting they review a Chinese subsidiary’s purchase of farmland in North Dakota.

Chinese scientists have found a rice gene that can boost yield and shorten the growth cycle. Details below.

Mexico could be hit with as much as $30 billion in tariffs if it loses a trade spat with the U.S. and Canada, according to Bloomberg, who cited two former officials who negotiated the pact under which the dispute was raised.

WRDA is on the Senate agenda next week. Details in Congress section.

How hot is it in London? On the outskirts of London, a portion of an airport runway melted after the U.K. capital saw its hottest day on record Tuesday with temperatures breaching 104 degrees Fahrenheit. Officials in London are also wrapping the famous Hammersmith Bridge in foil to reflect sunlight and keep the bridge from overheating.

Former President Donald Trump pushed senators to delay certifying election results on Jan. 6 and refused to say “the election is over” in his speech the next day, the January 6 committee revealed. More in Congress section.

Election Day 2022 is 109 days away. Election Day 2024 is 837 days away.

Equities today: Global stock markets were mixed to flat overnight. U.S. Dow opened around 130 points higher, but the Nasdaq opened slightly lower. American Express, Verizon Communications and Twitter are among the companies reporting earnings today. In Asia, Japan +0.4%. Hong Kong +0.2%. China -0.1%. India +0.7%. In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.2%.

U.S. equities yesterday: The Dow advanced 162.06 points, 0.5%, to 32,036.90. The S&P 500 added 39.05 points, 1%, to close at 3,998.95, near its high of the day. The Nasdaq rose 161.96 points, 1.4%, to 12m059.61.

Agriculture markets yesterday:

• Corn: December corn futures fell 16 1/2 cents to $5.73 1/2, the contract’s lowest close since $5.68 1/4 on Feb. 3.
• Soy complex: November soybeans plunged 30 3/4 cents to $13.01 1/2, the contract’s lowest closing price since $12.84 on Jan. 18. August soymeal fell $2.10 to $434.40 and August soyoil fell 143 points to 58.60 cents.
• Wheat: September SRW wheat fell 13 1/4 cents to $8.06 1/4 and September HRW wheat fell 10 cents to $8.67 3/4. September spring wheat fell 11 3/4 cents to $9.12 1/2. Cotton: December cotton futures fell 121 points to 91.60 cents per pound.
• Cattle: August live cattle fell 2.5 cents to $135.725. August feeder futures rose 45 cents to $178.275.
• Hogs: August lean hogs rose $1.425 at $116.30, the contract’s highest closing price since April 22. The CME lean hog index rose 46 cents to $116.37 (as of July 19), the highest level since June 2021, and is expected to rise another 58 cents Friday.
  

Ag markets today: Wheat futures faced heavy selling overnight, while corn extended this week’s sharp losses amid reports a deal to restart Ukrainian grain exports will be signed today (see related item in Russia/Ukraine section). Soybeans traded lower for much of the overnight session but are mixed and near session highs this morning. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents lower, soybeans were 4 cents lower to fractionally higher and wheat futures were 17 to 25 cents lower. Front-month crude oil futures were around $1.50 lower and the U.S. dollar index was around 175 points higher this morning.

Technical viewpoints from Jim Wyckoff:

On tap today:

• S&P Global’s U.S. manufacturing index is expected to fall to 52.2 in the opening weeks of July from 52.7 at the end of June. The services index is forecast to rise to 53 from 52.7. (9:45 a.m. ET)
• Baker Hughes rig count is out at 1 p.m. ET.
• CFTC Commitments of Traders report, 3:30 p.m. ET.

The Economist’s Big Mac index returns with the weekly publication saying its interactive currency comparison tool “looks at happy meals in unhappy places.” Link for details.

Background: “The Big Mac index was invented by the Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services (in this case, a burger) in any two countries. Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of academic studies. For those who take their fast food more seriously, we also calculate a gourmet version of the index.”

Mortgage rates continue rise to 5.54% for 30-year and 4.67% for 15-year fixed rate. Freddie Mac reported Thursday that the average 30-year mortgage in the U.S. rose to 5.54%, up from 5.51% last week, and up from 2.88% one year ago. The average for a 15-year fixed rate mortgage also rose to 4.75%, from 4.67% last week, up from 2.12% one year ago.

U.S. fuel makers are poised to generate historic levels of cash from refining oil into gasoline and other products after fuel prices have surged nationwide. Valero Energy, Marathon Petroleum and Phillips 66, the largest three independent refiners, are set to collectively bring in about $14 billion in cash from operations this quarter, analysts estimate, the highest combined level on record according to S&P Capital IQ data. The huge cash flows from their core business will translate into headline-grabbing profits as the companies report their results beginning next week.

New applications for unemployment benefits last week reached their highest point since late last year, a sign the tight labor market is slowly loosening. Initial jobless claims, a proxy for layoffs, rose to a seasonally adjusted 251,000 in the week ended July 16 from 244,000 the week before, the Labor Department said Thursday. Last week’s claims were above the 2019 prepandemic weekly average of 218,000, when the labor market was also strong, and at their highest since last November.

Eurozone business activity went into reverse in July for the first time since February 2021. S&P Global’s flash composite purchasing managers’ index, which measures both service sector and manufacturing companies in the eurozone, dropped to a 17-month low of 49.4 in July, a fall from 52 in June. Economists had expected a slight decline to 51, but the drop below 50, which indicates contraction, was unexpected.

Japan’s overall consumer inflation rose 2.4% from a year earlier in June, exceeding the Bank of Japan’s 2% target for three straight months, government data showed Friday.

Market perspectives:

• Outside markets: The U.S. dollar index is slightly up in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.823%. U.S crude was around $95.45 per barrel and Brent around $98.55 per barrel. Gold and silver futures were higher, with gold around $1,727 per troy ounce and silver around $18.80 per troy ounce.

• Some of the hottest weather on record is lifting natural gas prices, reversing last month’s plunge and reviving a key driver of inflation. Natural-gas futures have jumped about 48% this month.

• Palm oil prices have plummeted almost 50% since closing at a record high in April and could fall a further 20% by September to levels not seen since 2020, according to veteran analyst Dorab Mistry.

• IGC trims global corn crop, raises wheat estimate. The International Grains Council (IGC) trimmed its forecast for this year’s global corn output, largely driven by drought stress in the European Union. IGC cut its global corn production forecast by 1 MMT to 1.189 billion MT, which would be down 31 MMT (2.5%) from last year.

IGC raised its 2022 global wheat production forecast by 1 MMT to 770 MMT, which would be down 11 MMT (1.4%) from last year.

IGC cut its global soybean production forecast for this year by 4 MMT to 386 MMT, due mostly to reduced prospects for the U.S. crop amid lower planted acreage. Global soybean production in 2022-23 is still expected to rise 35 MMT (10%) from last year.

• Impasse at the Port of Oakland is deepening as shippers warn their businesses are starting to feel the pain. California Gov. Gavin Newsom says the state is proceeding with the transition toward a new law aimed at “gig economy” work, the Wall Street Journal reports (link), and his administration is effectively digging in against truckers who have said they will keep blocking gates at the West Coast’s third-busiest port without some action to minimize the impact of the law known as AB5. For now, the protesters are preventing trucks from reaching the West Coast’s third-busiest container port. They are also stopping dockworkers from reaching their posts loading and unloading ships. One state agriculture exporter says two of her shipments for overseas buyers have been tied up in the congestion and that her ability to sell her produce is being undercut by the blockade.

• Freight rail service is deteriorating as the sector’s labor tensions simmer. Containers are piling up around the country and trains are waiting for longer stretches at depots, the Wall Street Journal reports (link), frustrating industrial shippers and exacerbating delays across U.S. supply chains. Railroad executives are citing the tight labor market while existing employees say they are overworked and that wage increases are long overdue. Shippers say they started to suffer substandard service levels last fall and complained to federal regulators about delays disrupting the production and delivery of everything from ethanol to grain and livestock feed. The railroads are reporting higher profits (see below) under the leaner operations known as precision scheduled railroading. But some shippers say their service is getting worse and their costs are increasing, as bunching goods into one shipment rather than multiple loads to meet the rail requirements complicates their operations.

• • Union Pacific’s second-quarter operating revenue rose 14% despite a 1% decline in carload volume. (Progressive Railroading)
  • Second-quarter revenue at CSX rose 28% on pricing and fuel surcharge gains along with the addition of trucker Quality Carriers. (MarketWatch)
  • Maersk Line is warning customers that rail congestion is delaying shipments from Canada’s West Coast to inland destinations. (Financial Post)

• Blue Diamond Almond Growers is shifting some 400 containers per week of exports from the Port of Oakland to the ports of Los Angeles and Long Beach.

• Ag trade: South Korea purchased 128,000 MT of corn expected to be sourced from South America or South Africa and 65,000 MT of optional origin corn.

• NWS weather: Searing heat wave to engulf much of the Heartland, Mid-South, and East Coast this weekend.... ...Rounds of severe weather to traverse the Midwest & Northeast today; Enhanced Risk for severe storms in the Midwest on Saturday... ...Monsoonal moisture to bring locally heavy rains and isolated flash flooding across portions of the Southwest into the southern Rockies; strong thunderstorms & heavy rain possible across the South today… ...Critical Fire Weather Risk in eastern Idaho today.

Items in Pro Farmer’s First Thing Today include:

• Wheat leads overnight price pressure
• Ukraine warns of military response to any Russian ‘provocations’ over grain export deal
• Indonesia considers scrapping domestic sales requirement for palm exports
• China to auction more soybean reserves
• Big report day for cattle market
• Cold Storage Report out this afternoon, too
• Limited packer demand for cash cattle
• August lean hog futures remain supported

— Summary: Ukrainian officials said their forces used long-range missiles and artillery to attack more than 200 Russian targets in the south on Thursday. The strikes destroyed six ammunition depots, the military said. Russian forces will most likely need to suspend their offensive in Ukraine in the weeks to come, Britain concluded. “I think they are about to run out of steam,” Richard Moore, the head of British foreign intelligence, said.

• Ukraine’s grain breakthrough. A deal to allow Ukraine to resume exporting grain through the Black Sea is expected to be signed today in Istanbul following U.N.-brokered talks between Russian, Ukrainian, and Turkish officials. Turkish President Recep Tayyip Erdogan and United Nations Secretary General António Guterres will attend the signing, according to a statement from Erdogan’s spokesman (Guterres landed in Istanbul on Thursday evening, a U.N. official said). Under the terms of the deal, Ukraine will escort ships through mined waters to reach its ports, while Russia has agreed not to target vessels involved in grain shipment. As a confidence measure, Turkish officials have agreed to inspect the ships to allay any smuggling concerns. The accord is due to be signed at the Dolmabahce Palace offices this morning. Ukraine’s Deputy Ag Minister Taras Vysotskiy said, “The majority of the infrastructure of ports of wider Odesa — there are three of them — remains, so it is a question of several weeks in the event there are proper security guarantees.” That seems like a quick timeframe for resumption of grain exports. Thursday’s Policy Updates raised further questions regarding the coming agreement.

  Impact: An agreement could potentially free up about 18 million tons of wheat, corn and other supplies that war has prevented Ukraine from exporting. Meanwhile, wheat prices dropped to pre-war levels after news about the deal to unblock shipments. Also, besides freeing up grain that is currently trapped in Ukraine, there is a challenge of how to store or export the country’s coming summer harvest of an estimated 65 million tons. An agreement will also have to be strong enough to convince sea crews, privately owned freighters and their insurers who may be fearful to wade into the current environment.

  Ukraine comments. Ukraine’s foreign ministry confirmed that negotiations would resume in Turkey on Friday and that a document could be signed following the talks. “The Ukrainian delegation will support only those decisions that will guarantee the security of the southern regions of Ukraine, the strong positions of the Ukrainian Armed Forces in the Black Sea, and the safe export of Ukrainian agricultural products to the world markets,” the ministry said in a statement.

  Meanwhile, Ukraine warned of military response to any Russian ‘provocations’ over grain export deal. Ukrainian presidential adviser Mykhailo Podolyak wrote on Twitter before the expected signing ceremony for the grain export deal: “1. Ukraine does not sign any documents with Russia. We sign an agreement with Turkey and the U.N. and undertake obligations to them. Russia signs a mirror agreement with Turkey and the U.N. 2. No escorting of transport by Russian ships and the presence of Russian representatives in our ports. In case of provocations, an immediate military response. 3. All inspections of transport ships will be carried out by joint teams in Turkish waters should the need arise.”

  Russia comments. “We can confirm that the signing is being prepared today,” Kremlin Spokesman Dmitri Peskov told reporters. “But let’s wait — let’s not get ahead of ourselves.”

  U.S. responds. The U.S. National Security Council said in a statement that “we are hopeful though realistic about the prospects for re-opening Ukraine’s agricultural exports given how Russia has been blocking exports throughout the war, exacerbating global food insecurity. Success in ending Russia’s blockade will of course depend not only on Russia agreeing to a deal, but on Russia actually implementing it.”

  A potential impact for the U.S. ag sector. Looking to get the talks over the finish line, the U.S. has clarified that financial sanctions against Russia don’t apply to agricultural trade. That could clear a path for Russia’s food and fertilizer exports to get back on the market following an economic war against the Kremlin that has been waged by the West.

  Bottom line: Risks remain. Removing the underwater minefields that protect the ports Kyiv still controls may expose them to attack. Ukraine has increased the number of mines near its ports in recent weeks to defend against possible Russian attacks Bloomberg notes there is also the question of “why Russia would relinquish a major point of leverage as it pushes to annex more Ukrainian territory, since it’s unlikely to win its demand that economic sanctions ease.” Since Putin annexed Crimea in 2014 and fueled the separatist conflict in Ukraine’s east, Kyiv has complained that Russia has repeatedly violated pacts over cease-fires and humanitarian corridors. Moscow accuses Kyiv of the same. Also, a U.N. official cautioned that last-minute problems could still arise before they sign off on the deal. Meanwhile, should the governments reach a deal, enforcement will be key, and privately owned freighters, insurers and sea crews might be reluctant to handle cargoes from Odessa and other war-zone ports, given the threat of further attacks.

• European Council hit Russia with new restrictive measures today, preventing another major Russian bank from conducting transactions outside of the country. Separately, the Russian government today expanded its list of “unfriendly foreign states,” adding Greece, Denmark, Slovenia, Croatia and Slovakia.

— Nominations. President Biden Thursday sent to the Senate the nominations of Jeff Marootian to be assistant secretary for energy efficiency and renewable energy at the Department of Energy, and Stephen A. Owens for chairman of the Chemical Safety and Hazard Investigation Board.

— Commerce Dept. probing Huawei towers near U.S. military sites. Reuters reports that the Biden administration is “investigating Chinese telecoms equipment maker Huawei over concerns that U.S. cell towers fitted with its gear could capture sensitive information from military bases and missile silos that the company could then transmit to China. ... Authorities are concerned Huawei could obtain sensitive data on military drills and the readiness status of bases and personnel via the equipment.” According to Reuters, “The previously unreported probe was opened by the Commerce Department shortly after Joe Biden took office early last year...following the implementation of rules to flesh out a May 2019 executive order that gave the agency the investigative authority.”

Meanwhile, a group of Republican senators wrote to the heads of the U.S. Treasury and Defense departments last week requesting they review a Chinese subsidiary’s purchase of farmland in North Dakota. The move by Florida Senator Marco Rubio and North Dakota Senators Kevin Cramer and John Hoeven was the latest unexpected development in response to the agribusiness’s investment plan, which is coming under national scrutiny because of tentative ties to Beijing. Fufeng USA, a subsidiary of Hong Kong-listed Fufeng Group, purchased a parcel of farmland in Grand Forks for $2.6 million this year for the construction of a wet corn mill, which will extract ingredients for animal feed sold in North America. In their July 14 letter, the lawmakers urged Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin to ensure the purchase was screened by the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments with national security implications. Among the top issues is the farmland’s relative proximity to a U.S. Air Force base. “We believe that a full CFIUS review would clarify whether the purchase of this land, by Fufeng Group, carries national security implications,” the senators wrote. “This property is approximately 12 miles from Grand Forks Air Force Base, which has led to concern that Fufeng operations could provide cover for [People’s Republic of China] surveillance or interference with the missions located at that installation, given Fufeng Group’s reported ties to the Chinese Communist Party [CCP],” the letter read.

Facts and figures. Last July, a Politico report, citing USDA statistics for 2020, said Chinese companies controlled about $1.9 billion worth of agricultural land. It amounted to about 192,000 of the nearly 900 million acres of total American farmland.

— Chinese President Xi Jinping wished Joe Biden a speedy recovery from Covid-19. Biden tested positive on Thursday and experienced what the White House said were mild symptoms (see related item). Xi’s get-well-soon message comes ahead of expected talks between the US and Chinese leaders in the coming days. While Biden earlier said he and Xi would talk within the next week and a half, the Chinese Foreign Ministry declined to say when the talk would happen, saying only that the two leaders maintain various forms of communication.

— Chinese scientists have found a rice gene that can boost yield and shorten the growth cycle. Researchers in Beijing say they have found a gene in rice that can significantly increase yield and reduce the growth period, a discovery that could be a step towards improving food security, the South China Morning Post reports (link). Over-expressing the gene in a common rice species could increase the yield by more than 50% while moving the harvest time forward by over two weeks. The team’s findings were published in Science magazine on Friday.

Impact on other crops. Wan Jianmin, a professor at Nanjing Agricultural University and a leading Chinese expert on rice who was not involved in the study, said it was a “breakthrough.” “The discovery that a single gene can regulate multiple important physiological pathways at the same time tackles the long-standing conflict between high yield and early maturity in agricultural production,” Wan said. “The gene can also be used in different crops,” he said, adding that it had development potential and was “of great significance to promote sustainable agricultural intensive production.”

— Indonesian President Joko Widodo is set for the first visit to China by a foreign leader since the Olympics in February, a sign the diplomatic isolation of the world’s No. 2 economy due to its Covid Zero strategy may be easing.

— Mexico could be hit with as much as $30 billion in tariffs if it loses a trade spat with the U.S. and Canada, according to Bloomberg, who cited two former officials who negotiated the pact under which the dispute was raised. Washington and Ottawa have requested dispute settlement talks under the U.S.-Mexico-Canada Agreement, arguing that Mexico is violating the North American free trade deal with its moves to prioritize energy from its state utility over private renewables companies. Mexico will defend itself if sanctioned over its energy policy, President Andrés Manuel López Obrador, said.

— Warehouses may have to do double-duty as power providers as the push toward electric vehicles picks up. Companies with growing fleets of electric trucks and cargo vans are starting to ask industrial real-estate developers to install chargers at their distribution centers. The Wall Street Journal reports (link) the requests signal that logistics operators are preparing for a shift in the power behind transport as the new technology gets a foothold in commercial operations. Businesses and governments are starting to pay more attention to the relatively scant charging infrastructure that’s available along highways. But much of the investment so far has been aimed at passenger cars. The high stakes in shipping operations have companies looking at natural logistics nodes like distribution centers. Still, adding charging capability adds costs and complications as warehouses need to ensure they have the space and energy to plug in.

Meanwhile, Rivian Automotive began delivering the first of 100,000 electric cargo vans that Amazon has ordered. Link for details via the New York Times.

— European researchers formulated a fossil fuel-free synthetic jet fuel from carbon dioxide, solar energy and water in a technological advancement that could significantly alleviate air travel’s 4% contribution to global warming. The carbon-neutral fuel, part of the European Union’s solar fuel technology-focused SUNlight-to-Liquid project, would also translate to cars, trucks and ships. Link for details via Forbes.

— Energy company bailout in Germany. The German government today agreed to a $15.24 billion bailout of energy giant Uniper. The company’s difficulties are related to Russia’s invasion of Ukraine and the subsequent energy crunch. Uniper, which is majority-owned by a Finnish company, is Germany’s biggest importer of Russian gas. Earlier this month Uniper sought government help after it warned of rising energy bills. The German government is taking a 30% stake in the company.

— Australia, a major beef exporter, has found traces of foot-and-mouth disease on imported food products, deepening fears over a potential outbreak that could devastate the nation’s livestock industry. Viral fragments were found in a sample of pork floss offered for sale in Melbourne. Authorities have ramped up surveillance to prevent an incursion and are set to deploy sanitation foot mats at international airports this week. A widespread outbreak could have a direct economic impact of A$80 billion ($55 billion). It would also hurt global beef supplies as the country is one of the top shippers, comprising 13% of world trade. Link for more via Bloomberg item.

— Egg supplies in the U.S. are likely to remain tight in the U.S. even as one of the worst-ever bird flu outbreaks shows signs of slowing, according to Cal-Maine Foods Inc., the biggest producer.

— A brewery and pub in Germany is offering beer in exchange for cooking oil, as the country faces a shortage of sunflower and rapeseed oil due to the war in Ukraine and Russia sanctions. The Giesinger Brewery in Munich is offering a liter (around 33 ounces) of beer for a liter of oil and has so far received 400 liters of oil as part of the deal. “The whole thing came up because we simply ran out of oil in the kitchen and that’s why we have to be inventive,” the pub manager, Erik Hoffmann, told Reuters TV. “Getting oil is very difficult … if you need 30 liters a week and only get 15 instead, at some point you won’t be able to fry a schnitzel any longer,” Hoffmann said.

— Summary:

• Global Covid-19 cases at 567,951,340 with 6,380,835 deaths.
• U.S. case count is at 90,200,438 with 1,026,294 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 597,666,442 doses administered, 222,950,194 have been fully vaccinated, or 67.67% of the U.S. population.

— Biden tests positive for Covid, the White House announced, adding that he was “experiencing very mild symptoms.” While he is fully vaccinated and twice boosted, the positive test raises health concerns for the 79-year-old president. He is receiving Paxlovid, an antiviral drug used to minimize the severity of Covid-19, and will isolate at the White House. Biden will “continue to carry out all of his duties fully during that time,” his press secretary said.

— Brazil’s presidential race. On Thursday, Brazil’s Workers Party officially nominated former President Luiz Inácio Lula da Silva as its candidate in the Oct. 2 presidential election. Even though he leads incumbent President Jair Bolsonaro by a healthy margin in polls, Lula has chosen former São Paulo Governor Geraldo Alckmin, a centrist, as his running mate to widen his appeal outside his left-wing base.

— Italy will hold an early election on Sept. 25, with a bloc led by Giorgia Meloni’s nationalist Brothers of Italy currently leading in the polls. President Sergio Mattarella officially dissolved parliament yesterday after Mario Draghi resigned as prime minister. “The Russians are right now celebrating having made another western government fall,” Italian Foreign Minister Luigi Di Maio told Politico last week. “Now I doubt we can send arms [to Ukraine]. It is one of the many serious problems.” Polls indicate that snap elections in the fall will favor a far-right government, a political bloc that has traditionally been more sympathetic toward Russia across Europe. Among Europeans, when it comes to Ukraine, Italians are the least likely to blame Russia for the war and in a June poll, about half of respondents opposed sending defensive weapons to Ukraine.

— Rep. Lee Zeldin, the Republican candidate for New York governor, was assaulted by a man who apparently tried to stab him at an upstate event Thursday, but the congressman escaped serious injury. Zeldin is challenging incumbent Democratic Gov. Kathy Hochul in November. “I’m OK,” Zeldin said in a statement. “Fortunately, I was able to grab his wrist and stop him for a few moments until others tackled him.”

— Georgia governor race. The Cook Political Report with Amy Walter shifted the rating in the Georgia Governor race from Toss Up to Lean R. The race pits GOP incumbent Gov. Brian Kemp versus Stacey Abrams, a Democrat he narrowly defeated in 2018.

— WRDA on Senate agenda before recess. The Senate as soon as next week is expected to consider the 2022 Water Resources Development Act (WRDA). Environment and Public Works Chairman Tom Carper (D-Del.) and ranking member Shelley Moore Capito (R-W.Va.), as well as Transportation and Infrastructure Subcommittee leaders Ben Cardin (D-Md.) and Kevin Cramer (R-N.D.) have offered a substitute amendment to the House-passed WRDA bill (HR 7776), since the chambers’ two versions are different. The plan to pass the measure by unanimous consent means that the expected absence of Carper, who in a statement Thursday said he’s tested positive for Covid, wouldn’t impact the vote. After the Senate passes its measure, which is expected before it leaves for August recess, the House and Senate will go to a conference committee to iron out remaining differences. The measure would authorize improvements to the nation’s waterways and investments in flood control and coastal resiliency projects in nearly every congressional district in the country.

The Senate version of WRDA amends the cost share for inland waterway projects to 75% general Treasury funds and 25% from the Inland Waterways Trust Fund. The National Grain & Feed Assn. says “this permanent policy change will bolster investments for U.S. inland waterways and expedite the modernization of locks and dams.” It notes the House WRDA bill does not include this language.

— Former President Donald Trump declined to say “the election is over” during a taped Jan. 7, 2021, address; terrified members of former Vice President Mike Pence’s Secret Service detail requested over radio on Jan. 6 that goodbyes be passed along to their families; and Trump called unknown senators while watching Fox News coverage of the Capitol insurrection to urge them to delay certifying the presidential election, the Jan. 6 committee revealed Thursday night while piecing together a “minute-by-minute” account of Trump’s actions that afternoon.

Rep. Liz Cheney (R-Wyo.), vice chairwoman of the committee, said the panel would spend August continuing its investigation before convening in September for additional hearings. After Thursday’s hearing, Trump posted messages on his social-media network challenging the testimony.

— Supreme Court on Thursday refused the Biden administration’s request to reinstate a policy limiting immigration arrests, after a Texas district judge said the guidance to immigration officers violated federal laws. The court instead said it will hear the merits of the case in December. Four justices — Sonia Sotomayor, Elena Kagan, Amy Coney Barrett and Ketanji Brown Jackson — said they would have granted the administration’s request to put a lower court ruling on hold. It was Jackson’s first vote since joining the court. The court’s 5-4 vote is a loss for the Biden administration, which is trying to return to Obama-era policies that limit immigration arrests to focus on security risks instead of the more aggressive approach taken by the Trump administration.

— More high-school seniors are applying for college financial aid. About 92,000 more students in the class of 2022 filled out the Free Application for Federal Student Aid, or Fafsa, as of July 1, up 4.6% from last year, according to a National College Attainment Network analysis of Federal Student Aid data. That’s just shy of prepandemic completion rates. Still, analysts warn it might not translate to an immediate rise in college enrollment.

— New York state confirmed the first polio case in the U.S. since 2013, with experts working to understand how and where the person was infected.

— Cotton AWP falls again. The Adjusted World Price (AWP) for cotton fell to 103.96 cents per pound, effective today (July 22), down from 109.10 cents per pound and the lowest since it was 105.58 cents per pound the week of Jan. 14. Meanwhile, USDA said that Special Import Quota #14 will be established July 28 for 55,798 bales of upland cotton, applying to supplies purchased not later than Oct. 25 and imported into the U.S. not later than Jan. 23.