Trump, Schumer Near Deal to Avert Shutdown, But House Issues Surface
Refiners and year-round E15 | Klobuchar enters Minn. Gov race | U.S. food aid | U.S. trade gap widens
| LINKS |
Link: Video: Wiesemeyer’s Perspectives, Jan. 23
Link: Audio: Wiesemeyer’s Perspectives, Jan. 23
| Updates: Policy/News/Markets, Jan. 29, 2026 |
| UP FRONT |
TOP STORIES
— Trump, Schumer near deal to avert shutdown
White House and Senate Democrats explore splitting DHS funding from a broader spending package to avoid a shutdown, though House resistance and timing risks remain high.
— House math tightens as DHS funding stalemate deepens
A one-vote GOP House margin magnifies internal divisions on DHS funding, leaving Republicans dependent on direct Trump intervention to break the impasse.
— Refiners signal conditional support for year-round E15 as RFS fight resurfaces
Refiners say E15 can move only if paired with Renewable Fuel Standard cost relief, reviving a long-running ethanol-versus-RFS standoff.
— U.S. trade deficit jumps in November amid tariff-driven volatility
The trade gap widens sharply as imports surge and exports fall, highlighting month-to-month instability tied to shifting tariff policy.
— U.S., Mexico open talks on potential USMCA reforms
Washington and Mexico formally launch early-stage USMCA review talks, focusing on rules of origin, critical minerals, and supply-chain security.
— Klobuchar enters Minnesota governor’s race
Sen. Amy Klobuchar launches a gubernatorial bid, potentially opening a Senate vacancy and reshaping Democratic leadership dynamics, including on Senate Ag.
— Canada CEOs warn Carney risks U.S. trade ties
Canadian business leaders caution that confrontational rhetoric toward Trump could jeopardize USMCA stability ahead of the review.
FINANCIAL MARKETS
— Equities today
U.S. Dow was up and then down slightly on easing shutdown fears; mixed but modest gains across Asia and Europe.
— Equities yesterday
Major U.S. indices finished little changed, reflecting investor caution ahead of policy clarity.
— Tyson Foods to pay $48 million to settle pork price-fixing claims
Tyson agrees to settle food-service buyer claims tied to alleged pork supply coordination, without admitting wrongdoing.
— Fed holds rates steady, offers few signals on next move
The Fed keeps rates unchanged amid a split vote, stressing data dependence as Powell defends Fed independence and keeps post-May plans unclear.
AG MARKETS
— U.S. ag export sales to China appear to be slowing
Weekly USDA data show continued but uneven Chinese buying across soybeans, sorghum, cotton, and pork.
— Deep freeze threatens Ukraine’s winter wheat crop
Severe cold risks damage to winter wheat across much of Ukraine, especially where snow cover is thin.
— Agriculture markets yesterday
Grains mostly higher, livestock mixed, with wheat and cattle leading gains.
FOOD AID
— USDA steps in to stabilize Food for Peace shipments
USDA and WFP plan over 200,000 MT in food aid purchases beginning in March, providing modest cash-market support for U.S. grains and rice.
PERMITTING POLICY
— Environmental groups challenge USDA’s NEPA permitting overhaul
Lawsuit seeks to block USDA’s interim NEPA rule, arguing it unlawfully bypassed public input and APA requirements.
ENERGY MARKETS & POLICY
— Thursday: Brent crude jumps to five-month high
Trump’s Iran warnings inject fresh geopolitical premium, lifting Brent to $70 and accelerating bullish positioning.
— Wednesday: Oil prices hit four-month high
Crude rises on Iran tensions, a surprise U.S. inventory draw, storm-related supply losses, and a weaker dollar.
TRADE POLICY
— World trade volumes plateau as prices and currency effects push values higher
Trade volumes flatten while nominal trade hits record highs, driven by AI goods, tariff front-loading, and a weaker dollar.
POLITICS & ELECTIONS
— Senate ratings edge slightly toward Democrats, but GOP still holds the map advantage
Sabato’s tweaks favor Democrats in Georgia and Florida, but structural factors keep Republicans favored to hold the Senate.
WEATHER
— NWS outlook
Winter storms threaten the Mid-Atlantic and Plains, with lake-effect snow continuing near the Great Lakes.
| TOP STORIES — Trump, Schumer near deal to avert shutdownDHS funding could be split off as talks turn to a short-term fix President Donald Trump and Senate Minority Leader Chuck Schumer (D-N.Y.) are nearing an agreement to avoid a partial government shutdown by pulling the Department of Homeland Security (DHS) funding bill out of a six-bill FY2026 spending package, according to the New York Times. The approach would allow the remaining five appropriations bills to move together, while lawmakers advance a short-term continuing resolution to keep DHS funded and prevent disruptions at agencies such as TSA, the Coast Guard, and FEMA. The report stressed that no final deal has been reached. Senate Majority Leader John Thune (R-S.D.) has indicated he is not yet willing to strip DHS from the minibus, with a procedural vote planned for today that is expected to fail — potentially setting the stage for a Trump/Schumer agreement that could include Democratic-sought changes tied to federal immigration enforcement. Even with a deal, a brief funding lapse remains likely, since the House does not return until Monday. Democrats’ willingness to risk another shutdown has hardened following recent deadly shootings involving federal agents in Minnesota, while Republicans warn they will not accept changes that constrain President Trump’s immigration crackdown. — House math tightens as DHS funding stalemate deepensGOP faces one-vote margin and internal resistance as immigration demands collide with Democratic red lines Voters in Houston will elect a successor this weekend to the late Rep. Sylvester Turner (D-Texas). If Speaker Mike Johnson (R-La.) swears in a new Democrat as expected, the House will stand at 218 Republicans and 214 Democrats — a one-vote margin for the GOP on any bill, with no room for defections. That fragile math is amplifying concerns inside the House Republican Conference as the Senate works to avert a shutdown and pressure mounts over Department of Homeland Security funding, particularly for Immigration and Customs Enforcement. House GOP leaders privately say they see no clear path to passing a revised DHS funding bill. Any chance of success would likely require direct involvement from President Donald Trump to personally whip skeptical Republicans. The House Freedom Caucus is already signaling resistance. Rep. Chip Roy (R-Texas), who is running for Texas attorney general, has warned that reopening the DHS bill would prompt him to push for cutting all funding for sanctuary cities. Rep. Andy Harris (R-Maryland), the Freedom Caucus chair, would likely seek to add provisions expanding H-2B visas — a long-standing priority. More broadly, most House Republicans reject core Democratic demands led by Senate Minority Leader Chuck Schumer (D-New York) and House Minority Leader Hakeem Jeffries (D-New York). Chief among them is a proposal requiring ICE to obtain judicial warrants for arrests. House GOP leaders oppose the idea, and the White House has privately called it a non-starter. Democrats, however, consider it a red line, leaving negotiations far apart. For now, Republican leaders see only one possible off-ramp: deep engagement from Trump to bring reluctant House Republicans on board. House Democrats, meanwhile, appear confident in a prolonged standoff. They believe a DHS funding fight will keep attention on the fatal shooting of two people by federal agents in Minneapolis and on Republicans’ refusal to take legislative action in response. — Refiners signal conditional support for year-round E15 as RFS fight resurfacesTrump’s backing revives momentum for higher-ethanol gasoline, but refiners warn that any deal must include Renewable Fuel Standard cost relief to move through Congress President Donald Trump’s renewed push for year-round sales of E15 gasoline has reopened a familiar fault line on Capitol Hill: ethanol expansion versus Renewable Fuel Standard (RFS) compliance costs for refiners. Independent refiners, through the Fueling American Jobs Coalition, said they could back a legislative package allowing E15 sales in all seasons — but only if Congress also revisits the RFS to curb what they describe as punishing compliance expenses. In a statement to Politico, the coalition argued that any E15 bill should include provisions to grant exemptions when RFS costs become excessive, a clear reference to the volatile price of Renewable Identification Numbers (RINs). That position puts refiners on a collision course with ethanol advocates and many farm-state lawmakers, who have long treated year-round E15 as a standalone priority tied to corn demand, rural investment, and consumer fuel choice. Ethanol supporters generally oppose reopening the RFS statute, warning that doing so could weaken the mandate’s core blending requirements. The standoff is not new. Agricultural lawmakers and corn and biofuel lobbyists previously negotiated a compromise with the American Petroleum Institute that paired year-round E15 with limited refiners’ relief. That agreement unraveled late last year amid broader spending talks, leaving E15 out of the final January funding package. What’s changed now is the political backdrop. Trump’s public endorsement has raised expectations among Midwest Republicans and Democrats that E15 could ride a larger legislative vehicle this year — potentially an energy, tax, or must-pass budget/supplemental spending measure. But refiners’ insistence on RFS reforms suggests the same structural hurdle remains: ethanol backers want E15 without reopening the law, while refiners see E15 as leverage to finally extract statutory relief from compliance costs they say threaten refinery viability. Bottom Line: Trump’s support gives E15 new momentum, but without a carefully balanced RFS compromise that both farm-state lawmakers and refiners can live with, the policy risks stalling once again — just as it has in multiple Congresses before. — U.S. trade deficit jumps in November amid tariff-driven volatilityGap widens to a four-month high as imports surge and exports slide, underscoring sharp month-to-month swings under shifting Trump administration trade policy The U.S. trade deficit widened sharply in November 2025 to $56.8 billion, the largest gap in four months, rebounding from an unusually narrow $29.2 billion deficit in October — the smallest since 2009. The November figure also came in well above market expectations for a $40.5 billion shortfall, highlighting pronounced volatility tied to the Trump administration’s frequently changing tariff stance. Imports climbed 5% to $348.9 billion, driven largely by a $6.7 billion jump in pharmaceutical preparations following a steep decline the prior month. Computer imports also rose sharply, up $6.6 billion, pointing to renewed demand for tech-related goods. Exports, by contrast, fell 3.6% to $292.1 billion, weighed down by declines in nonmonetary gold, pharmaceutical preparations, and crude oil. On a bilateral basis, the trade gap widened with Vietnam ($16.2 billion vs. $15.0 billion in October), China ($14.7 billion vs. $13.7 billion), and the European Union ($14.5 billion vs. $6.3 billion). The deficit narrowed slightly with Mexico ($17.8 billion vs. $17.9 billion) and Taiwan ($15.6 billion vs. $15.7 billion). Overall, the November data reinforce how sensitive U.S. trade flows have become to policy uncertainty, with tariff signals continuing to drive sharp, and sometimes abrupt, monthly swings in both imports and exports. — U.S., Mexico open talks on potential USMCA reformsOfficials signal early start to review process, with focus on rules of origin, critical minerals, and supply-chain security The United States and Mexico have agreed to begin formal discussions on possible reforms to the U.S.-Mexico-Canada Agreement, marking an initial step in the first USMCA Joint Review. U.S. Trade Representative Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard met in Washington on Wednesday, where they agreed to launch talks on “structural and strategic reforms,” according to a USTR readout. Areas under consideration include stronger rules of origin for key industrial goods, enhanced cooperation on critical minerals, and closer alignment of external trade policy to counter dumping and protect workers and producers in both countries. Ebrard described the meeting as a “very good conversation,” saying progress was made on several issues to ensure the USMCA review process moves “as quickly as possible.” He added that the discussions also covered Section 232 tariffs, the auto industry, critical minerals, and broader supply-chain security. While the meeting was widely viewed as a procedural step, it formally opens the door to more complex and potentially contentious negotiations as the two countries move from signaling intent to working through the substance of potential USMCA changes. Washington has already outlined a slate of bilateral trade issues it wants Mexico to resolve ahead of the USMCA review, ranging from stronger intellectual property protections to adequate funding for trade, labor, and environmental enforcement. In December, Greer said progress had been made on those talks and told lawmakers he hoped to unveil the “fruits” of that work “in short order.” Greer made clear that while the U.S. plans to pursue bilateral tracks with Mexico — and separately with Canada — some priorities will likely require a trilateral approach. Those include rules of origin, critical minerals, and broader economic security alignment. On rules of origin, Greer said Washington wants tougher standards for non-automotive industrial goods so that the benefits of trade “flow substantially to the Parties.” For critical minerals, USTR is considering a “Critical Minerals Marketplace” aimed at incentivizing mining, processing, recycling, reuse, and manufacturing across North America. And on economic security, the U.S. is pushing for closer alignment on tariffs, export controls, and investment screening. USTR has not issued a comparable notice signaling the start of talks with Canada. Still, Canadian Prime Minister Mark Carney said Tuesday that he recently discussed trade with President Donald Trump and expects formal negotiations on the review to begin within weeks. Carney earlier characterized Trump’s recent threat to raise tariffs on Canada if it strikes a trade deal with China as “positioning” ahead of the review. Both Canada and Mexico are already subject to U.S. national-security tariffs imposed by Trump on a range of sectors, as well as emergency-powers duties on goods traded outside the USMCA framework. During the review, set for July, the U.S., Mexico and Canada can negotiate changes to the pact and must decide whether to extend it for another 16 years or let it sunset after 10 years. If the parties don’t come to an agreement, they could continue negotiations to try to reach a deal ahead of the 10-year deadline. — Klobuchar enters Minnesota governor’s raceDemocratic senator launches bid after Gov. Tim Walz exits, as immigration enforcement and fraud scrutiny roil state politics Democratic Sen. Amy Klobuchar (D-Minn.) announced Thursday that she will run for governor of Minnesota, moving quickly into the race after Tim Walz (D-Minn.) dropped his bid for a third term earlier this month. Klobuchar’s decision further reshapes Democratic politics in the blue-leaning state at a moment of heightened tension, driven by expanded federal immigration enforcement and renewed scrutiny of an alleged nonprofit fraud scheme. With Walz out and Keith Ellison (D-Minn.) declining to run, her entry is expected to keep the Democratic field largely clear. The campaign launches amid backlash over Immigration and Customs Enforcement activity in Minneapolis following two fatal shootings involving federal agents. Klobuchar has sharply criticized ICE operations, saying they are making Minnesota “less safe,” and said she plans to vote against a government funding package that includes money for the Department of Homeland Security. Walz cited fallout from the Feeding Our Future child care fraud case as a key factor in his decision not to seek re-election, an issue the Trump administration has pointed to in defending its stepped-up ICE presence in the state. If Klobuchar wins the governorship, she would create a Senate vacancy that Minnesota law allows the governor to fill temporarily until a special election. In her launch video, Klobuchar draws on the uproar over ICE’s crackdown in the state and two deadly shootings by federal agents. “These times call for grit and resilience,” she says. Klobuchar’s Senate seat is not up again until 2030. Republicans, meanwhile, are facing a crowded primary in a state that has not elected a GOP governor in nearly two decades. Klobuchar, first elected to the Senate in 2006, has won all four of her Senate races by wide margins and previously ran for the Democratic presidential nomination in 2020. If Klobuchar wins the governor’s race, as would be expected, that would open the lead Democratic spot on the Senate Ag Committee. That likely would be Sen. Cory Booker (D-N.J.). Beyond seniority, Booker is a logical fit:• Longstanding focus on nutrition, food access, and equity• Strong interest in urban/rural ag policy bridges• Already deeply engaged on farm bill–adjacent issues, even if not a traditional production-ag profile — Canada CEOs warn Carney risks U.S. trade tiesBusiness leaders urge focus on preserving USMCA as rhetoric with Trump raises concerns The head of Canada’s top business lobby is questioning Mark Carney’s strategy toward Donald Trump, warning that confrontational rhetoric could undermine Canada’s core economic interests ahead of crucial trade talks. Business Council of Canada CEO Goldy Hyder said Carney’s recent World Economic Forum speech — which framed global trade as a tool of great-power coercion — left Canada isolated, with few allies willing to publicly back Ottawa. Hyder argued the message clashes with Carney’s past warnings during Brexit about the dangers of distancing from a country’s largest trading partner. Tensions escalated after Trump criticized Carney’s remarks, while senior U.S. officials also took verbal shots at the Canadian leader. Scott Bessent said Carney came to power on an “anti-American” message — a risky posture given Canada’s dependence on U.S. trade. Canada sends roughly 70% of its goods exports to the U.S., most of them tariff-free under the U.S.-Mexico-Canada Agreement. Hyder said Canada’s top priority should be ensuring this year’s USMCA review goes smoothly, especially as Washington signals progress in talks with Mexico and Claudia Sheinbaum.While Carney has pledged to diversify exports and double non-U.S. trade over a decade, business leaders stress that preserving the continental supply chain — strongly supported by U.S. manufacturers — remains essential to investment and economic stability. |
| FINANCIAL MARKETS |
— Equities today: U.S. Dow has seen both gains and losses in early trading. U.S. gov’t shutdown risks fell on reports that President Trump and Senate Minority leader Schumer were close to a deal to extend government funding. In Asia, Japan flat. Hong Kong +0.5%. China +0.2%. India +0.3%. In Europe, at midday, London +0.5%. Paris +0.6%. Frankfurt -0.9%.
— Equities yesterday:
| Equity Index | Closing Price Jan. 28 | Point Difference from Jan. 27 | % Difference from Jan. 27 |
| Dow | 49,015.60 | +12.19 | +0.02% |
| Nasdaq | 23,857.45 | +40.35 | +0.17% |
| S&P 500 | 6,978.03 | -0.57 | -0.01% |
— Tyson Foods to pay $48 million to settle pork price-fixing claims
Agreement resolves allegations from food service buyers over pork purchases between 2014 and 2019
Tyson Foods has agreed to pay $48 million to settle a long-running class action lawsuit brought by U.S. food service companies alleging the meat processor conspired with competitors to restrict pork supply and inflate prices.
The settlement covers restaurant and food service operators that purchased pork products between 2014 and 2019. Plaintiffs argued that coordinated production cuts and information-sharing across the industry drove up the prices they paid for pork.
Tyson’s agreement marks the sixth settlement in the broader pork pricing litigation, which has already resulted in hundreds of millions of dollars in combined payouts from major producers. Tyson did not admit wrongdoing as part of the settlement, which still requires court approval.
— Fed holds rates steady, offers few signals on next move
Split vote underscores caution as Powell stresses data dependence, easing tariff pressures, and a stabilizing labor market
The Federal Reserve kept its benchmark federal funds rate unchanged at 3.5% – 3.75% at its Jan. 28 meeting, offering little forward guidance on when — or whether — the next policy move will come. The decision by the Federal Open Market Committee again exposed divisions within the Fed, with Governors Christopher Waller and Stephen Miran dissenting in favor of a 25-basis-point rate cut.
In its post-meeting statement, the Fed subtly upgraded its view of the economy, describing growth as “solid” rather than “moderate,” and revised its assessment of the labor market. Officials said job gains have “remained low” and unemployment is showing “some signs of stabilization,” while removing earlier language about rising downside risks to employment. Inflation was again characterized as “elevated,” but without the sharper concern expressed late last year.
Fed Chair Jerome Powell emphasized that the central bank is “well positioned” after cutting rates three times in late 2025 and will continue to decide policy “meeting by meeting.” He pushed back on expectations of near-term action, saying no decisions have been made about future meetings and that officials are letting incoming data “light the way.”
Powell also signaled that tariff-related inflation pressures may be peaking. Assuming no new major tariff increases, he said those effects should fade over the course of 2026 — potentially opening the door to easier policy later. At the same time, he stressed that renewed labor-market weakness would also factor heavily into future decisions.
While Powell reiterated that a rate hike is not anyone’s base case, the meeting reinforced the Fed’s cautious stance: inflation risks and employment risks both appear to have eased somewhat, but not enough to justify immediate action.
The forthcoming minutes are expected to shed more light on how close the committee came to cutting rates — and how firmly entrenched opposing views have become — as the Fed navigates an economy emerging from shutdown-distorted data and lingering policy uncertainty.
Powell declined to say whether he plans to remain at the Federal Reserve beyond May. He is eligible to stay on as a Fed governor through January 2028 — a move that could limit President Trump’s ability to appoint a loyalist to the rate-setting committee. By keeping his intentions unclear, Powell is preserving what the Wall Street Journal describes as his “last and only card” in dealing with the administration.
Powell explained why he attended last week’s Supreme Court hearing involving another embattled Fed official, Lisa Cook. The administration is seeking to remove the Fed governor over allegations of mortgage fraud, which she denies. During the hearing, the justices appeared inclined to rule against the administration in a case that legal experts say could fundamentally reshape Federal Reserve independence. “That case is perhaps the most important legal case in the Fed’s 113-year history,” Powell said yesterday, adding, “I thought it might be hard to explain why I didn’t attend.” Powell later warned that Fed independence would be difficult to restore once lost, but said he remains confident it will endure. “I don’t believe we will lose it,” he said.
Of note: Most economists and investors still expect the Federal Reserve’s next move to be a rate cut, not a hike, reflecting cooling inflation trends, tighter financial conditions, and a Fed that has signaled it is closer to restrictive enough than at risk of falling behind the curve. While leadership uncertainty around a post-Powell Fed adds noise to the outlook, the dominant view is that any successor would be more likely to inherit — and cautiously extend — an easing bias rather than pivot quickly back toward tightening absent a clear reacceleration in inflation or a sharp rebound in growth.
| AG MARKETS |
— U.S. ag export sales to China appear to be slowing. USDA weekly Export Sales data for the week ended Jan. 22 showed activity for China that included net sales of 129,549 MT of sorghum, 233,460 MT of soybeans, and 38,744 running bales of upland cotton. There were also net sales of 15,897 MT of pork reported for 2026. The data shows that as of Jan. 22, U.S. soybean export commitments to China were at 9,653,592 MT with 3,514,592 MT already shipped.
— Deep freeze threatens Ukraine’s winter wheat crop
Analysts warn temperatures plunging to as low as –22°F (–30°C) could damage crops, especially where snow cover is thin
Extremely cold weather forecast for early next week could pose a serious risk to Ukraine’s winter crops, analysts and emergency officials warned, as temperatures are expected to fall as low as –22°F (–30°C) across much of the country, according to Reuters.
The cold snap is set to begin around Feb. 1 and affect nearly all regions of Ukraine, with only the southern areas largely spared from the worst frosts. Temperatures are expected to ease slightly starting February 4, the national emergency service said.
Analysts at Barva Invest described the conditions as “extremely dangerous” for winter crops, particularly winter wheat, which accounts for roughly 95% of Ukraine’s total wheat harvest. Winter wheat is planted in the fall and typically delivers higher yields than spring wheat but is vulnerable to severe cold without adequate snow cover.
Barva Invest cautioned that the combination of deep freezes and limited snow protection could damage crops in central, northeastern, and eastern regions. While southern Ukraine is likely to see milder temperatures, the lack of snow there still leaves crops exposed.
Ukraine experienced a similar cold spell earlier in January, when temperatures dropped to about –4°F (–20°C) before briefly rising above freezing this week — offering little recovery time ahead of the next freeze.
— Agriculture markets yesterday:
| Commodity | Contract Month | Closing Price Jan. 28 | Difference vs Jan. 27 |
| Corn | March | $4.30 | +3.5¢ |
| Soybeans | March | $10.75 | +7.75¢ |
| Soybean Meal | March | $297.80 | +$3.80 |
| Soybean Oil | March | 54.31¢ | -10 pts |
| Wheat (SRW) | March | $5.36 | +12.75¢ |
| Wheat (HRW) | March | $5.42 1/4 | +9.5¢ |
| Spring Wheat | March | $5.74 | +2.25¢ |
| Cotton | March | 63.73¢ | -10 pts |
| Live Cattle | April | $238.725 | +$1.325 |
| Feeder Cattle | March | $365.85 | +$3.85 |
| Lean Hogs | April | $95.15 | -$1.675 |
| FOOD AID |
— USDA steps in to stabilize Food for Peace shipments, with U.S. commodity purchases expected by March
Partnership with the World Food Program would move more than 200,000 metric tons of food aid, offering modest support for U.S. grain and rice markets during a seasonally soft export window
USDA, which has temporarily assumed management of the Food for Peace, is working with the World Food Program to distribute more than 200,000 metric tons of international food aid. Purchases of U.S.-origin commodities are anticipated to begin as early as March, helping ensure continuity in humanitarian flows as administrative responsibility shifts.
The arrangement is designed to avoid near-term disruptions to U.S. in-kind food aid and to keep U.S.-sourced commodities moving through established procurement and logistics channels. For agricultural markets, the significance is less about futures prices and more about cash demand, export inspections, and basis support at a time when commercial export visibility can be uneven.
Likely commodity mix
Based on historical Food for Peace Title II procurement patterns and standard WFP ration requirements, the bulk of the aid is expected to consist of traditional U.S. staples rather than specialty products. A plausible breakdown of the 200,000+ metric tons includes:
Wheat and wheat products (45% – 55%)
Primarily Hard Red Winter wheat and milled flour, with shipments moving through Gulf and Pacific Northwest ports.
Rice (20% – 30%)
Long-grain milled rice sourced largely from Arkansas and Louisiana.
Corn or sorghum (10% – 15%)
Often used in fortified blends for general food distributions.
Pulses and blended products, including CSB+ (10% – 15%; Corn-Soy Blend Plus)
Typically containerized and shipped through West Coast ports for nutrition programs.
This composition points to demand that shows up relatively quickly in export loadings and inspections rather than being absorbed quietly into domestic channels.
Destination regions and timing
Shipments are expected to be concentrated in regions where WFP already has large-scale emergency operations, including East and Southern Africa, parts of the Middle East, and selected countries in South and Southeast Asia. Smaller volumes may also move to the Caribbean and Central America.
Procurement mechanics suggest contract awards in late February, followed by physical loadings in March and April. Most wheat and corn volumes would move through the U.S. Gulf, with additional wheat shipments from the Pacific Northwest and containerized rice and blended products moving from the West Coast.
Market implications
The program is unlikely to materially move futures markets, but it does provide targeted support for cash markets:
Wheat: Most supportive for Gulf HRW basis, with secondary benefits for PNW wheat depending on destination mix.
Rice: Modest but meaningful support for cash bids in Arkansas and Louisiana.
Corn and blends: Limited price impact, but helpful for maintaining export throughput and logistics utilization.
More broadly, the expected March purchases reduce downside risk during a seasonally soft export period and help stabilize weekly inspection totals if commercial demand slows.
Policy significance: Beyond near-term market effects, USDA’s move underscores Washington’s intent to preserve continuity in U.S. in-kind food aid amid program restructuring. By keeping domestic sourcing central, the approach aligns with longstanding Congressional preferences while giving exporters and producers a clearer line of sight on demand during the first half of the year.
Estimated U.S. Food Aid Commodity Volumes
| Commodity | Estimated Share of Total | Estimated Volume (Metric Tons) | Market Notes |
| Wheat / Wheat Products | 45% – 55% | 90,000 – 110,000 | HRW focus; Gulf and PNW loadings |
| Rice | 20% – 30% | 40,000 – 60,000 | Arkansas and Louisiana cash markets |
| Corn / Sorghum | 10% – 15% | 20,000 – 30,000 | Primarily for fortified blends |
| Pulses / CSB+ | 10% – 15% | 20,000 – 30,000 | Containerized; nutrition programs |
Sources and methodology: USDA; Food for Peace (Title II) program materials; World Food Program operational reports; USDA Foreign Agricultural Service export inspection data; USDA Economic Research Service analyses. Commodity shares and volumes are illustrative ranges scaled to the 200,000+ metric ton figure cited by USDA and WFP and reflect historical procurement patterns and standard WFP ration requirements.
| PERMITTING POLICY |
— Environmental groups challenge USDA’s NEPA permitting overhaul
Lawsuit argues interim final rule unlawfully bypassed public input and violated federal rulemaking requirements
Environmental organizations escalated their fight with USDA on permitting policy this week, filing suit to block recent changes to how the agency implements the National Environmental Policy Act (NEPA).
The Center for Biological Diversity and Sierra Club sued USDA in the U.S. District Court for the Northern District of California, targeting an interim final rule that revised USDA’s NEPA procedures without first going through a full notice-and-comment process.
At the core of the complaint is USDA’s decision to publish the rule on an interim basis — meaning it took effect immediately — rather than as a proposed rule open to public review. The groups argue the changes improperly eliminated opportunities for public comment on draft environmental impact statements and removed public input requirements tied to certain categorical exclusions.
According to the filing, those moves violate the Administrative Procedure Act (APA), which generally requires agencies to seek and consider public feedback before finalizing substantive regulatory changes. The plaintiffs contend USDA failed to demonstrate the “good cause” necessary to bypass those steps.
The groups are asking the court to declare the interim final rule unlawful, vacate it, and order USDA to revert to its prior NEPA procedures until the agency fully complies with APA rulemaking requirements.
A key near-term issue will be whether the court grants an injunction that pauses implementation of the new permitting framework while the case proceeds. Such a ruling could have immediate implications for infrastructure, conservation, and agricultural projects that rely on USDA approvals, potentially forcing a return to the agency’s previous, more participatory NEPA review process — at least temporarily.
| ENERGY MARKETS & POLICY |
— Thursday: Brent crude jumps to five-month high as Trump threats add geopolitical premium
Oil markets price in Iran risk, pushing Brent to $70 and lifting bullish bets
Brent crude futures climbed to $70 a barrel for the first time since September, rising as much as 2.7%, after Donald Trump warned Iran to strike a nuclear deal or face possible military action.
U.S. benchmark West Texas Intermediate also advanced, topping $65.
Trump said in a social media post that U.S. naval assets in the region were prepared to act “with speed and violence, if necessary,” injecting fresh geopolitical risk into a market that had begun the year expecting oversupply. Instead, crude has rallied in early 2026, supported by tensions spanning Iran and Venezuela and supply disruptions in Kazakhstan.
Options markets reflect the shift. Bullish call options on Brent have outpaced bearish puts for the longest stretch in about 14 months, and additions to bullish positions are rising at the fastest pace in at least six years, as traders hedge against the risk of a U.S./Iran confrontation.
Citigroup analysts estimate the latest threats have added $3 to $4 a barrel in geopolitical premium. A direct U.S. strike could threaten flows from the Middle East — roughly a third of global supply — while retaliation risks disruptions through the Strait of Hormuz, a critical chokepoint for oil and LNG shipments.
Iran says it is open to dialogue but warns it would respond forcefully if attacked, even as it steps up diplomacy with regional powers to prevent escalation.
— Wednesday: Oil prices hit four-month high on Iran tensions, U.S. inventory draw
Geopolitics, storm-related supply losses and a weaker dollar combine to lift crude markets
Oil prices climbed Wednesday to their highest levels since late September, supported by mounting geopolitical risk, a surprise draw in U.S. crude inventories and a softer U.S. dollar.
Brent crude settled up 83 cents, 1.2%, at $68.40 a barrel, while U.S. West Texas Intermediate rose 82 cents, or 1.3%, to $63.21.
Geopolitical concerns centered on Iran after Donald Trump urged Tehran to negotiate over its nuclear program, warning that any future U.S. military action would be more severe. Iranian officials said the country would retaliate if attacked, while the arrival of a U.S. aircraft carrier and supporting warships in the Middle East added to worries about potential supply disruptions. Some of that risk premium was tempered by renewed diplomatic optimism, with Russia-Ukraine-U.S. talks set to resume in Abu Dhabi on Feb. 1, though analysts said Middle East tensions continue to underpin prices.
Fundamentally, oil markets were boosted by a larger-than-expected draw in U.S. crude inventories. The Energy Information Administration reported crude stockpiles fell by 2.3 million barrels last week to 423.8 million barrels, defying expectations for a build. Strong exports and lower imports drove the draw, even as gasoline and distillate inventories posted modest increases.
Weather impacts also lingered. U.S. producers continued restoring output after last weekend’s winter storm, but crude production was still estimated to be down about 600,000 barrels per day — roughly 4% of total output — as infrastructure recovered from freezing conditions.
A weaker U.S. dollar, hovering near four-year lows against a basket of major currencies, added support by making oil cheaper for non-U.S. buyers. Meanwhile, the Federal Reserve held interest rates steady, citing persistent inflation and solid economic growth, offering little guidance on when borrowing costs might begin to fall.
Supply risks were reinforced by disruptions in Kazakhstan, where production losses at the Tengiz oilfield have tightened markets. While authorities hope output will resume gradually within a week, industry sources cautioned the recovery could take longer, keeping prices sensitive to further outages.
| TRADE POLICY |
— World trade volumes plateau as prices and currency effects push values higher
AI-driven demand, tariff front-loading, and a weaker dollar widen the gap between real and nominal trade growth
World merchandise trade volume flattened in the third quarter of 2025 after a strong first half of the year, but the dollar value of global trade surged to a record high, according to new international trade statistics released in late January 2026. The divergence reflects rising prices, currency effects, and a powerful surge in AI-related goods rather than a collapse in underlying demand.
On a volume basis, global merchandise trade rose just 0.5% quarter-on-quarter in Q3 and 3.6% year-on-year. By contrast, the nominal (U.S. dollar) value of trade jumped 7.5% year-on-year, underscoring a widening gap between real and nominal growth. A weaker U.S. dollar — down about 1.9% year-on-year against a broad currency basket — amplified the dollar value of trade flows, particularly those denominated in non-dollar currencies such as intra-EU trade.
For the first nine months of 2025, global trade volume was up 4.5% compared with the same period in 2024, well above the WTO Secretariat’s earlier 2.5% forecast. Trade value rose 6.5% over the same period, driven less by currency effects than by import front-loading ahead of expected tariff hikes and a boom in AI-related products.
AI-related goods — including chips, semiconductors, and data-transmission equipment — were the standout driver. Their trade value rose nearly 20% year-on-year in the first three quarters of 2025. While these goods accounted for roughly 15% of global merchandise trade, they contributed an outsized 42% of total year-on-year trade growth, reflecting both surging demand and tariff exemptions.
Non-AI trade also expanded, up 4.4% in value terms, supported by sharply higher gold prices as investors sought safe havens amid economic uncertainty, and by strong pharmaceutical trade — particularly anti-obesity drugs and vaccine inputs — boosted by pre-tariff stockpiling in North America.
Regionally, Asia led export volume growth in the first nine months of 2025 at 9.5%, followed by Africa (6.1%) and South and Central America and the Caribbean (5.7%). Export volumes declined slightly in Europe and more noticeably in the CIS region. On the import side, South and Central America and the Caribbean and Africa posted double-digit growth, while North America and Europe saw more moderate increases.
Recent monthly data show especially strong trade value growth among high-tech exporters and small open economies. Chinese Taipei, Switzerland, Egypt, Costa Rica, Slovenia, Ireland, and Viet Nam recorded some of the fastest export gains, while larger economies such as the United States, the European Union, China, and Japan posted steadier mid-single-digit growth. Commodity-dependent economies, including Russia and Kazakhstan, saw declines. Import growth patterns broadly mirrored these trends, signaling robust investment demand in high-growth economies and more uneven momentum elsewhere.
| POLITICS & ELECTIONS |
— Senate ratings edge slightly toward Democrats, but GOP still holds the map advantage
Sabato’s Crystal Ball upgrades Georgia and downgrades Florida for Republicans, yet structural hurdles keep the Senate leaning GOP
Sabato’s Crystal Ball made a pair of notable Senate rating adjustments this week — one helping Democrats, one trimming Republican strength — while concluding that Republicans remain favored to retain control of the chamber in the 2026 midterms.
The biggest shift comes in Georgia, where Sen. Jon Ossoff (D-Ga.) moves from Toss-up to Leans Democratic, reflecting Democrats’ improving position in the state and uncertainty around the eventual GOP nominee. At the same time, Florida drops from Safe Republican to Likely Republican, acknowledging Democrats’ ability to mount a credible — though still uphill — challenge.
Despite those changes, the overall Senate landscape continues to favor Republicans. The core problem for Democrats is the structure of the map: nearly all remaining competitive races are in states that lean whiter and redder than the national average, limiting how much even a strong national environment can help.
Key takeaways from the update:
• Republicans are still favored to hold the Senate majority, even if the 2026 midterms resemble a “blue wave” year similar to 2018.
• President Donald Trump’s approval has weakened among young and nonwhite voters, but that erosion matters less in Senate races concentrated in states such as Iowa and Ohio.
• Democrats must defend vulnerable turf — notably Michigan and Georgia — while also flipping Republican-held seats in places where the GOP retains a durable baseline advantage.
Georgia: Sabato’s moves Ossoff (D-Ga.) into Leans Democratic, citing Democrats’ track record of winning recent statewide races and the lack of a dominant Republican challenger. Potential GOP contenders include Rep. Buddy Carter (R-Ga., Rep. Mike Collins (R-Ga.), and Derek Dooley, with a Gov. Brian Kemp (R-Ga.) staying out of the race. The outlet expects a close contest decided by only a few points.
Michigan: The open Democratic-held seat remains a Toss-up. Democrats face a crowded primary featuring Rep. Haley Stevens (D-Mich., state Sen. Mallory McMorrow (D-Mich., and Abdul El-Sayed, while former Rep. Mike Rogers (R-Mich.) is favored for the GOP nomination. A messy Democratic primary keeps this race highly competitive.
North Carolina and Maine: Both remain Toss-ups. In North Carolina, former Gov. Roy Cooper (D-N.C.) leads early polling against Michael Whatley (R-N.C.), but margins remain narrow. In Maine, Sen. Susan Collins (R-Maine) continues to defy easy categorization thanks to her crossover appeal, while Democrats face a contentious primary.
Florida: Sen. Ashley Moody (R-Fla.), an appointed incumbent, now sits in Likely Republican. Democrats gained a high-profile challenger in Alexander Vindman, but Sabato’s sees Florida’s rightward drift as a major obstacle.
Big picture: Democrats could get close in several red or red-leaning states — including Iowa, Ohio, and Alaska — but Sabato’s argues the party still faces a “red wall” that may be difficult to breach even under favorable national conditions. Incremental gains are possible, but the path to a Democratic Senate majority remains narrow and structurally challenging.
| WEATHER |
— NWS outlook: Winter Storm for the Southern Mid-Atlantic… …Lake-effect snow downwind from the Great Lakes… …Snow over the Northern/Central Plains.
