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Brent Crude Hits $100 Per Barrel as Houthi Militants Claim Attacks on Two Saudi Tankers in Red Sea
Rubio/Wang talks keep Xi’s September Washington visit on track
| LINKS |
Link: Houthis Open a Second Front at Sea, Squeezing World Oil
Through a Closing Vise
Link: Screwworm Case Count Climbs to 42 as a New Sutton County
Detection Keeps the Summer Front Alive
Link: Greer Defends Trump Tariff Strategy as Senate Presses
on USMCA, Prices and Farm Trade
Link: GOP Balks at Canada Tariffs as Trump Expands Trade Leverage
Link: Renewable Diesel’s New Math: Record Mandates,
Tightening Carbon Markets and a Feedstock Squeeze
Link: NSP Welcomes Sorghum Futures Plan but Presses CME
on Contract Design
Link: Video: Wiesemeyer’s Perspectives, July 19
Video show is now on You Tube,Spotify & Apple
Link: Audio: Wiesemeyer’s Perspectives, July 19
| UP FRONT |
TOP STORIES
— Rubio/Wang talks keep Xi’s September Washington visit on track: The two officials advanced preparations for Xi’s expected visit despite persistent tensions over trade, Taiwan and maritime security.
— STB warns Union Pacific over shipper intimidation claims: Regulators warned against pressuring shippers as captive customers consider whether to support Union Pacific’s proposed Norfolk Southern acquisition.
— NovoFly could double screwworm firepower — but not yet: USDA’s male-only strain could nearly double useful sterile-fly output, but testing and regulatory hurdles may delay large-scale deployment until 2027.
FINANCIAL MARKETS
— Equities today: Global markets were mostly lower as Alphabet’s results pressured technology shares and investors monitored the Middle East conflict. The U.S. Dow opened around 500 points lower.
— Equities yesterday: The Nasdaq declined 0.57%, while the Dow and S&P 500 finished close to unchanged.
— Union Pacific lifts 2026 outlook after record second-quarter results: Higher volumes, pricing and improved operations lifted earnings and prompted the railroad to raise its full-year outlook.
AG MARKETS
— USDA daily export sale: USDA reported the sale of 126,000 metric tons of 2026/27 soybeans to unknown destinations.
— USDA confirms soybean sales to China in weekly update: Outstanding new-crop soybean sales to China reached about 2.53 million metric tons, alongside smaller sales of other agricultural products.
— Grains extend midweek surge overnight; soybeans carve fresh contract highs: Heat, limited rainfall, Black Sea disruptions and Chinese demand pushed soybeans to new highs and corn closer to $5.
— European grains firm as weak dollar inflates U.S. equivalents; palm oil extends rally: European grain premiums remained strong while palm oil advanced on higher energy prices, biofuel mandates and improving demand.
— Shipowners halt vessel calls at Ukraine’s Black Sea ports as Russia targets grain trade: Russian attacks have suspended ship arrivals and sharply reduced Ukrainian export capacity, adding risk premiums to world wheat prices.
— Report suggests cattle herd may be near a turning point: The U.S. herd may be stabilizing, although beef-on-dairy production is making traditional rebuilding indicators harder to interpret.
— Agriculture markets yesterday: Grain, soybean-product, wheat and cotton futures advanced, while live and feeder cattle posted sharp losses.
ENERGY MARKETS & POLICY
— Thursday: Brent oil hits $100 as tanker attacks deepen Middle East supply fears: Brent topped $100 and WTI approached $92 as tanker attacks and U.S./Iran threats raised fears of broader shipping and infrastructure disruptions.
— Wednesday: Middle East conflict pushes oil to highest level since June: Oil gained more than 3% as threats to the Strait of Hormuz and Bab el-Mandeb outweighed a 2-million-barrel increase in U.S. inventories.
TRADE POLICY
— Trump’s Canada tariffs set Aug. 19 deadline, with farm input carveouts: New 50% tariffs exempt potash, fertilizer, energy and Canadian weaner pigs, but possible retaliation threatens U.S. agricultural exports.
— Palm oil trade relief collides with new fatty acid duties: New Indonesian and Malaysian fatty-acid duties could combine with other tariffs and raise costs for manufacturers, livestock producers and consumers.
— Brazil tariffs reveal limits of Trump trade strategy: Broad exemptions shield U.S. buyers but leave much of Brazil’s trade untouched, reducing Washington’s negotiating leverage.
FOOD POLICY & INDUSTRY
— FDA revokes dormant Orange B approval, targets Citrus Red No. 2: Removing two largely unused dyes will have little immediate commercial effect but advances the administration’s broader food-color phaseout.
CONGRESS
— House heads home as Senate inherits a crowded pre-recess agenda: Senators will focus on government funding and another NDAA vote before their Aug. 10 recess, while reconciliation likely waits until September.
WEATHER
— NWS outlook: Tropical Storm Bertha threatens Gulf Coast flooding as flash-flood risks, monsoonal storms and hazardous heat affect several other regions.
— Corn Belt faces whiplash from record cool to dangerous heat: Beneficial rain and cool conditions will give way to triple-digit heat and volatile thunderstorms, keeping crop-yield risks elevated.
| TOP STORIES |
| — Rubio/Wang talks keep Xi’s September Washington visit on trackBoth sides stress stability while trade, Taiwan and maritime tensions persist U.S. Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi used a roughly 90-minute meeting in Manila on Wednesday to advance preparations for Chinese President Xi Jinping’s expected Sept. 24 visit to Washington, offering one of the clearest indications yet that both governments remain committed to holding the summit despite renewed strains. Rubio said the discussions focused heavily on creating the conditions for what he expects to be a “very positive” visit. The unusually similar tone of the two governments’ accounts was notable. China’s Foreign Ministry described the meeting as “pragmatic, positive and constructive” and said the two sides agreed to implement understandings reached by President Donald Trump and Xi, use diplomatic channels more effectively and prepare for the next stage of high-level exchanges. Wang, however, paired that cooperative language with familiar warnings. He called on Washington to respect China’s “core interests,” adhere to the one-China principle, manage disagreements and respond to what Beijing considers legitimate concerns. The Chinese statement also referred broadly to recent “negative remarks and actions” by the U.S. without identifying them. Rubio’s message was more direct: The U.S. and China are too economically and strategically important to allow their relationship to break down. He acknowledged that major differences will remain for the foreseeable future but said the responsibility of both governments is to prevent those disputes from spiraling out of control. Of note: The two also discussed trade, Taiwan and the bilateral Board of Trade established through earlier Trump-Xi negotiations. Perspective: The Manila meeting did not produce a major policy breakthrough, but that was not its primary purpose. Its significance lies in keeping senior-level communication open and preventing individual disputes from derailing Xi’s visit. Both governments appear to be compartmentalizing tensions long enough to build a summit agenda and possibly assemble several limited agreements that the leaders can announce in September. That compartmentalization was evident in Rubio’s disclosure that Trump’s recent allegations of Chinese interference in U.S. elections were not discussed. Avoiding the issue suggests Washington did not want a politically explosive dispute to overwhelm preparations for the visit. It also shows that the administration still sees value in protecting the diplomatic track even while Trump publicly pressures Beijing. The same restraint may be harder to maintain over Taiwan and the South China Sea. Rubio said Chinese coast guard activity around Taiwan runs counter to the “strategic stability” both sides are trying to establish. He also called a recent confrontation between Chinese and Philippine forces escalatory and reaffirmed that the U.S. intends to honor its defense commitments to Manila. That creates a fundamental contradiction heading into September: Washington wants a stable working relationship with Beijing while simultaneously strengthening alliances and resisting Chinese pressure in the Indo-Pacific. Beijing, meanwhile, wants economic and diplomatic stability but expects the U.S. to reduce activity that China views as interference in its sovereignty claims. Bottom line: The September visit therefore appears on track, but it is not yet insulated from disruption. The next two months will determine whether officials can turn broad language about “constructive strategic stability” into concrete outcomes on trade and other areas — or whether Taiwan, maritime confrontations or another political dispute again places the relationship in crisis.— STB warns Union Pacific over shipper intimidation claimsRegulator protects merger testimony as captive customers fear retaliation The Surface Transportation Board (STB) has delivered an unusually direct warning (link) to Union Pacific and other participants in the railroad’s proposed acquisition of Norfolk Southern: Efforts to pressure or punish shippers for their positions on the merger will not be tolerated. The warning followed a July 16 letter (link) from Sen. Tammy Baldwin (D-Wis.), who alleged that Union Pacific CEO Jim Vena made a “thinly veiled threat” at a March shipper conference to raise rates on customers that declined to publicly support the merger. Union Pacific has said Vena’s comments were made jokingly and taken out of context. The STB did not find that Union Pacific had retaliated against anyone. Instead, it warned all parties to avoid statements or conduct that could discourage participation or influence stakeholders to express views that do not reflect their own judgment. The board also invited Union Pacific and Norfolk Southern to address the reports in supplemental merger materials due July 27. Shippers may confidentially report potentially threatening conduct to the STB’s Office of Public Assistance, Government Affairs and Compliance. That channel is especially important for “captive” customers — businesses served by only one practical railroad — which may fear that public opposition could affect contract rates, car availability, service levels, demurrage charges or future embargo decisions. The warning was included in a broader decision granting rail unions access to detailed information on where jobs would be created, eliminated or transferred under the merger. The STB ordered Union Pacific and Norfolk Southern to remove “highly confidential” designations from that employment data and make it public by July 27, reinforcing the board’s insistence on a transparent record. Perspective: The dispute goes to the integrity of the merger review rather than merely the appropriateness of Vena’s remarks. The STB must rely heavily on shippers to determine whether a coast-to-coast railroad would increase competition and improve service or give the combined company greater power to raise rates. If customers believe their testimony could produce commercial consequences, the board’s record could be skewed toward supportive comments. Baldwin said stakeholders had raised concerns about possible retaliation through rate increases, service reductions, demurrage penalties and “weaponized embargoes.” Those allegations remain unproven, but they are particularly sensitive given the bargaining imbalance between a railroad and a customer without another practical transportation option. The development also complicates Union Pacific’s attempt to portray the transaction as broadly supported by customers. The company says the merger would eliminate interchange delays, save shippers an estimated $3.5 billion annually and shift roughly 2.1 million truckloads to rail. Opponents argue that further consolidation could instead reduce routing choices and increase the merged railroad’s pricing leverage. The warning does not indicate that the STB is preparing to reject the deal. But it adds another layer of scrutiny to a proceeding that is already paused while the applicants provide more information on competitive benefits, service guarantees, market shares, captive shippers and the possibility that the transaction could trigger additional rail mergers. Bottom line: The immediate effect is to place Union Pacific on notice that the STB is watching not only the economic merits of the merger but also how the company builds its public case. The longer-term risk is that concerns about shipper pressure could weaken the credibility of supportive testimony and strengthen arguments for tougher merger conditions, including rate protections, reciprocal switching or expanded regulatory oversight.— NovoFly could double screwworm firepower—but not yetMale-only strain offers a capacity breakthrough, but field risks remain USDA researchers are preparing the first outdoor tests of NovoFly, a genetically engineered New World screwworm fly that could sharply increase the supply of sterile males needed to combat the spreading livestock pest. Reuters reporters Tom Polansek and Heather Schlitz said the initial work will be conducted at the U.S./Panama screwworm facility, where flies will be confined in mesh cages and exposed to Panama’s heat and humidity while researchers measure their survival outside laboratory conditions. Link to our special report today on the screwworm situation. NovoFly carries a genetic trait that kills female flies during the embryonic stage, allowing production facilities to raise only males. Those males must still be sterilized through irradiation before release. Because the existing production process generates roughly equal numbers of males and females—and only sterile males suppress reproduction—the technology could nearly double the useful output of a facility without immediately expanding its physical capacity. That potential is significant because the Panama plant is already operating at capacity, producing about 100 million sterile flies per week. Experts estimate approximately 500 million per week may be required to push the screwworm population back toward the Darién Gap between Panama and Colombia. NovoFly would not close that gap by itself, but it could turn nearly all production into usable sterile males instead of devoting feed, space and labor to females that provide no eradication benefit. If the cage tests succeed, researchers expect to begin larger trials at a nearby ranch within nine to 12 weeks. About 50,000 NovoFly males would be released every few days, marked with fluorescent dyes and tracked through traps to determine how long they survive and how effectively they disperse. Such trials generally last six to eight weeks. The central question is whether the laboratory-bred strain can fly far enough, survive long enough and compete successfully with wild males for mates. The largest near-term risk is operational. Introducing a new strain into the Panama facility would require different diets, temperatures and production procedures. A mistake could cause a brood collapse and disrupt the world’s largest existing source of sterile screwworm flies just as demand is surging. That argues for initially scaling NovoFly at a separate facility rather than converting Panama’s production line while it remains essential to the current campaign. Regulatory and production hurdles also remain. EPA has been reviewing USDA’s request to authorize NovoFly as a biopesticide, while outdoor testing requires approval from Panamanian biosecurity officials. A Mexican animal-health official told Reuters that production could potentially begin at Mexico’s reopened facility by the end of 2026, but meaningful deployment across the eradication zone appears more likely in 2027 after field performance, regulatory approvals and mass-rearing protocols are established. Perspective: NovoFly is best viewed as a force multiplier rather than an immediate solution. Its male-only design could improve the economics and efficiency of every future production plant, but it cannot substitute for additional physical capacity, surveillance, animal treatment and movement controls. The technology’s value will ultimately depend not merely on producing more males, but on producing males that survive, disperse and mate as effectively as wild flies. Until those questions are answered, conventional sterile flies—and the strained Panama supply chain — will remain the backbone of the screwworm response. |
| FINANCIAL MARKETS |
— Equities today: Global markets were mostly lower, weighed down by technology stocks following quarterly results from U.S. giant Alphabet, while markets assessed developments in the Middle East conflict. The U.S. Dow opened around 500 points lower ahead of another heavy corporate earnings day.
In Asia, Japan +0.5%. Hong Kong +1.3%. China +0.3%. India -0.5%.
In Europe, at midday, London flat. Paris -1.1%. Frankfurt -0.6%.
— Equities yesterday:
| Equity Index | Closing Price July 22 | Point Difference from July 21 | % Difference from July 21 |
| Dow | 52,218.58 | -6.06 | -0.01% |
| Nasdaq | 25,690.90 | -146.30 | -0.57% |
| S&P 500 | 7,498.96 | 10.24 | -0.14% |
— Union Pacific lifts 2026 outlook after record second-quarter results
Higher volumes and pricing drove earnings gains despite fuel-related cost pressure
Union Pacific reported record second-quarter revenue, operating income and net income as higher freight volumes, core pricing gains and fuel-surcharge revenue strengthened results.
The Omaha, Nebraska-based railroad earned $2 billion, up 6% from a year earlier, while diluted earnings increased 7% to $3.36 per share. Excluding special items, net income rose 12% and adjusted earnings climbed 13% to $3.41 per share.
Operating revenue advanced 12% to $6.9 billion. Freight revenue also increased 12%, although growth excluding fuel surcharges was a more moderate 4%, reflecting the effect of higher energy prices on reported revenue.
The railroad’s reported operating ratio, which measures expenses as a share of revenue, weakened 70 basis points to 59.7%. The adjusted ratio deteriorated 110 basis points to 59.2%, but Union Pacific said higher fuel prices alone added 120 basis points. That suggests underlying operating efficiency remained relatively firm despite the headline increase in costs.
Operational performance improved across several measures. Freight-car velocity rose 5% to 231 miles per day, while average terminal dwell declined 7% to 19.7 hours. Workforce productivity improved 5%, and the railroad also reported gains in train length, fuel efficiency and safety, including lower personal-injury and derailment rates.
Chief Executive Officer Jim Vena said the company is prepared to handle increasing customer demand while advancing through the regulatory process for what Union Pacific describes as the nation’s first transcontinental railroad. The statement refers to its proposed combination with Norfolk Southern, which would create a coast-to-coast freight network but faces extensive regulatory and shipper scrutiny.
Union Pacific raised its 2026 earnings outlook to high-single-digit growth, consistent with its target for a high-single- to low-double-digit annual growth rate through 2027. The railroad reaffirmed expectations for pricing gains above inflation, operating-ratio improvement, strong cash generation and a $3.3 billion capital plan.
Upshot: The results show Union Pacific benefiting from stronger demand and disciplined operations even as fuel costs obscure some of the underlying efficiency gains. The improved outlook indicates management expects volume and pricing momentum to outweigh a mixed economic environment, although the railroad’s longer-term strategy increasingly depends on winning approval for its proposed transcontinental network.
| AG MARKETS |
— USDA daily export sale: 126,000 MT soybeans to unknown for 2026/27.
— USDA confirms soybean sales to China in weekly update. USDA Export Sales data for the week ending July 16 included more new-crop soybean sales to China along with old-crop sorghum and cotton sales plus small amounts of beef and pork. Sales activity for 2026/27 to China included 1.006 MMT of soybeans, of which 476,000 MT were already known via daily sales announcements. The report listed 2.262 MMT of soybean export sales so far for 2026/27 to China. Combined with daily sales since the week ended July 16, there are another 264,000 MT of sales not yet accounted for in the weekly business which put outstanding sales to China at 2.526 MMT. For 2025/26, activity included net sales of 60,480 MT of sorghum (2,200 MT new sales), 70,628 MT of (5,000 MT new sales) and 15,475 running bales of upland cotton (14,513 running bales of new sales). Activity for 2026 included net sales of 531 MT of beef (541 MT new sales) and 266 MT of pork (362 MT new sales).
— Grains extend midweek surge overnight; soybeans carve fresh contract highs
Corn, beans firm on hot-and-dry forecasts, Black Sea jitters and China’s buying streak, while KC wheat pauses after Wednesday’s 30-cent romp; traders parse this morning’s export sales for proof Beijing’s appetite has legs
Grain and soy futures pushed higher again in overnight trade Thursday, building on Wednesday’s broad-based rally as weather premium, war premium and demand optimism continued to stack on top of one another. September corn added 2 cents to $4.64, August soybeans gained 8 1/2 cents to $12.415, August meal firmed $2.40 to $334.00 and August soyoil rose 0.72 to 76.20 cents. September SRW wheat edged up 1 1/2 cents to $7.0725, while September HRW slipped a penny to $7.625 — a breather after Kansas City led Wednesday’s wheat surge with gains of more than 30 cents.
The overnight action extended a remarkable run. November soybeans notched a new contract high overnight, capping a rally of roughly 75 cents since July 4, when China began booking new-crop U.S. beans in earnest. Corn has tacked on roughly 60 cents since June 30, and December corn — which settled Wednesday at $4.84 3/4 after a 9 1/2-cent gain — is beginning to flirt with the psychologically important $5.00 level. Both corn and soybeans are trading solidly above their 100- and 200-day moving averages, a technical posture that has kept fund money flowing into the long side of the grains even as the specs exit livestock positions.
Three forces are driving the move.
First, weather: the brief midweek cool-down across the central Corn Belt is expected to give way to renewed heat, with the western belt still running dry and forecasts showing above-normal temperatures and stingy rainfall potentially through month-end — prime pollination-to-grain-fill stress territory. Analysts are increasingly open in their view that USDA’s corn yield could be trimmed in the August 12 WASDE, and that soybean ending stocks could shrink if export demand keeps pace.
Second, geopolitics: Russia has restricted shipping access at certain ports while continuing strikes on Ukrainian export infrastructure (see details below), reviving Black Sea supply concerns in a corridor that handles nearly a third of world wheat trade, while expanded U.S. airstrikes on Iran have kept crude — up more than $3 overnight — and the entire biofuels-linked veg oil complex well bid.
Third, demand: China’s string of new-crop soybean purchases, which traders attribute to competitive U.S. pricing against Brazil and a thawing trade relationship ahead of the September 28 presidential meeting, has fundamentally changed the tone of a market that spent early summer worried about an absent buyer.
Wheat is the complex’s cautionary tale. Wednesday’s explosion — SRW up 27 3/4, KC up 30 1/2, Minneapolis up 24 3/4 — had traders openly warning the market is overbought, and overnight consolidation in HRW and spring wheat reflected that plus early crop-tour results out of North Dakota showing improved spring wheat yields near 48 bushels per acre. Bulls counter that the Wheat Quality Council’s winter wheat findings ran below USDA’s estimates and that drought already carved into 2026 winter wheat production, leaving the U.S. well positioned if Black Sea flows are further disrupted.
Bottom line: with funds long and getting longer, weather threatening the crop’s home stretch, and two war fronts menacing competitor export corridors, the burden of proof overnight remained on the bears — and they didn’t meet it.
— European grains firm as weak dollar inflates U.S. equivalents; palm oil extends rally to one-month high
Paris wheat now near $7.64 per bushel and French corn at $7.55 — both at hefty premiums to Chicago — while Malaysian palm futures top MYR 4,700 on biodiesel mandates, Mideast-driven crude strength and Indian demand
Paris wheat futures edged up €0.50 per metric ton this morning to €244.75. At the euro’s current level around $1.1475, that works out to roughly $280.90 per metric ton, or about $7.64 per bushel — a gain of only a penny and a half in U.S. terms, but still nearly a 60-cent premium to Chicago September wheat, which settled Wednesday at $7.05¾ after a 27¾-cent surge. The premium underscores how much of the world wheat market’s firmness is being carried by tight European exportable supplies and a euro that keeps ratcheting dollar-denominated equivalents higher even on quiet Paris sessions.
The corn side of the ledger is more striking. Paris August corn futures were unchanged at €259 per metric ton, which converts to about $297.25 per metric ton — $7.55 per bushel. That is nearly a $3-per-bushel premium over Chicago September corn ($4.62 at Wednesday’s close), a spread that ordinarily would be pulling U.S. corn into European channels as fast as logistics allow. The wider the gap persists, the stronger the pull on U.S. export demand into late summer, and the more support it lends beneath a Chicago market that has been leaning on old-crop tightness and weather premiums of its own.
Malaysian palm oil futures surged about 1.8% Thursday to slightly above MYR 4,700 per metric ton, a one-month peak. At roughly 4.08 ringgit to the dollar, that is about $1,152 per metric ton, or 52.3 cents per pound — still a discount of more than 23 cents to Chicago soybean oil, which closed Tuesday at 75.48 cents ($1,664 per metric ton). That discount is palm’s ace card: it keeps the world’s cheapest major vegetable oil competitive into price-sensitive markets even as the rally extends.
The palm advance rests on a stack of mutually reinforcing supports. Strength in rival edible oils on the Dalian and Chicago exchanges lifted sentiment, as did surging crude oil prices amid persistent Middle East tensions — higher crude improves biodiesel economics across the board. The feedstock outlook tightened further with Indonesia’s B50 blending mandate, which took effect July 1, and Malaysia’s own higher blending requirements curbing export availability from the world’s two dominant suppliers. Demand prospects brightened as well: Indian industry officials project higher edible oil imports between July and October, with tight domestic supplies ahead of festival season expected to boost palm purchases in the top-consuming country. Weather added a longer-dated kicker after Malaysia’s meteorological agency warned that record-high temperatures could dent output next year. The lone soft spot was mixed July 1–20 export data from the cargo surveyors — AmSpec pegged Malaysian shipments down 0.9% from June while Intertek estimated a 4.1% increase — leaving the near-term export picture ambiguous even as the structural story tightens.
Bottom line: The common thread across the board: a softer dollar, firmer energy, and biofuel policy are doing as much work as crop fundamentals in setting world price floors right now. For U.S. producers, the European grain premiums are an export invitation; for U.S. soybean oil, palm’s rally narrows the competitive gap from below and reinforces the bullish biofuel-demand backdrop on both sides of the Pacific.
— Shipowners halt vessel calls at Ukraine’s Black Sea ports as Russia targets grain trade
Strikes on ships and port infrastructure — at the peak of harvest — choke off one-third of Ukraine’s seaborne export capacity and put fresh risk premium into world wheat markets
Commercial shipowners have temporarily suspended vessel arrivals at Ukraine’s Black Sea ports after weeks of escalating Russian missile and drone attacks on port infrastructure and merchant shipping, Ukrainian Agriculture Minister Taras Vysotskyi confirmed. “As of today, the entry of ships has been suspended. This is a decision taken by the shipowners. Ukraine, as a state, has not imposed any restrictions,” he said, per Interfax-Ukraine. Acting Foreign Minister Andrii Sybiha underscored the stakes on X: “Zero vessels passed through Ukraine’s Black Sea maritime corridor — right at the peak of harvest. This is deliberate economic and humanitarian terror.” Kyiv has requested a UN Security Council meeting for Monday.
The tipping point. The suspension follows the deadliest single attack on commercial shipping of the war: on July 19, three Russian cruise missiles struck the Turkish-owned, Guinea-Bissau-flagged bulker Golden Leo as it departed Odesa loaded with corn, killing 10 — Syrian and Indian crew members plus a Ukrainian harbor pilot. Drone strikes earlier this month hit vessels at Chornomorsk, where Maersk has suspended service and rerouted cargo to Constanta, Romania, and where Kernel — Ukraine’s largest grain exporter — halted terminal operations after losing an estimated 45,000 tonnes of wheat and 9,000 tonnes of sunflower oil to strikes. Shipowners are now invoking force majeure. Russia insists it is targeting only port infrastructure and vessels supporting the Ukrainian military; the crews killed were civilian merchant sailors.
The math doesn’t work without the deepwater ports. Ukraine’s Odesa-area deepwater ports (Odesa, Chornomorsk, Pivdennyi) handle over 90% of its farm exports. The strikes have cut deepwater capacity from roughly 7 million tonnes a month to 4–5 million, and the fallback routes can’t come close to covering the gap:
| Ukraine Export Capacity: Black Sea Losses vs. Alternatives (tonnes/month) | |
| Deepwater Black Sea ports | |
| Deepwater port capacity, pre-escalation | ~7 million |
| Deepwater capacity now | ~4–5 million |
| Monthly shortfall | ~2.5 million |
| Alternative routes | |
| Danube river barges | ~100,000 |
| Truck via western border | ~100,000 |
| Rail via EU crossings | ~300,000–400,000 |
| Total alternative capacity | ~500,000–600,000 |
Note: Alternative routes cover roughly one-fifth to one-quarter of the monthly shortfall.
Vysotskyi’s remark that alternative routes are “underutilized” is technically true but cold comfort — even at full throttle they replace only a fraction of lost seaborne volume, at sharply higher cost. Turkey raised Bosphorus transit fees about 15% on July 1, and Ukrainian railways have proposed a 30% tariff hike from August 1, adding $5–6 per tonne. Those costs land on Ukrainian farmers: interior bids dropped within days of the strikes, with rapeseed bids down about $24/tonne and Kernel cutting terminal bids $5/tonne in a single day. Four of thirteen large export terminals have suspended purchasing altogether.
Russia’s exports are no longer a safe haven either. The new wrinkle in this round of escalation is that both Black Sea grain origins are now impaired. Ukraine has stepped up drone and naval strikes on Russian vessels and infrastructure in the Sea of Azov, the Kerch Strait and the Black Sea, prompting Russia to impose a nighttime navigation ban at Novorossiysk — its largest cargo port, handling up to one-third of Russian grain exports. Daytime grain loading continues for now, but the restriction was delivered verbally to shippers with no official notice, and war-risk insurance and freight premiums for Russian ports are climbing. Analysts at PKO Bank Polski attribute the bulk of this month’s wheat rally to Russian shipping disruption specifically — a notable shift, since Russian exports had flowed largely unimpeded through four years of war.
Market reaction. Wheat has responded the way it always does to Black Sea headlines — fast:
| Price Scoreboard: Market Reaction to Black Sea Escalation | ||
| Market | Move | Detail |
| Matif (Euronext) milling wheat | +7% to €231.75 (~$265/tonne); further +4.5% | Jumped July 15 after the port strikes; added 4.5% on the Novorossiysk night ban |
| CBOT wheat | Near $6.70/bu | Mid-July level is the best since mid-May; holding near two-month highs |
| Corn | Two-month high | Pulled up in sympathy; Ukraine supplied ~11% of world corn exports pre-war (~6% of wheat) |
The geography, in brief. Everything at issue sits in a tight arc around the northwest Black Sea:
| Black Sea Grain Chokepoints | ||
| Location | Role in grain trade | Current status |
| Odesa / Chornomorsk / Pivdennyi (Ukraine) | 90%+ of Ukraine farm exports | Under missile/drone attack; vessel calls suspended |
| Danube ports — Reni, Izmail (Ukraine) | Shallow-draft fallback, ~100,000 t/month | Operating; limited capacity |
| Constanta (Romania) | NATO-flag relief valve | Absorbing Maersk and Kernel diversions |
| Novorossiysk (Russia) | Up to one-third of Russian grain exports | Nighttime navigation banned |
| Kerch Strait / Sea of Azov | Russian export lanes | Under Ukrainian drone and naval attack |
Perspective: what to watch:
First, duration is everything. A pause of days is a freight-rate story; a pause of weeks at peak harvest becomes a storage crisis inside Ukraine — the 2022 playbook of trapped grain, collapsing farmgate prices and reduced planted area for the next crop.
Second, watch insurers, not diplomats. The corridor Ukraine built after Russia abandoned the grain deal in 2023 worked because underwriters priced the risk; a sustained campaign of lethal strikes on foreign-crewed, foreign-flagged vessels — Turkish-owned, with Indian and Syrian crews — is precisely what makes that coverage evaporate.
Third, the dual-disruption dynamic is the real bull story. Global wheat markets shrugged off Ukrainian losses for two years because record-large, cheap Russian supplies filled the gap. If Novorossiysk restrictions widen or Ukrainian strikes intensify, that shock absorber is gone — and with world wheat stocks already tight, the market would have to ration demand through price.
Fourth, the diplomatic angle: Turkey, whose shipowner and crews just took casualties, has leverage over both Bosphorus transit and any revived corridor arrangement, and Monday’s UN Security Council session will test whether importing nations — India lost crew members too — begin applying real pressure.
Of note: For U.S. wheat, sustained Black Sea risk premium is the first meaningful export-competitiveness tailwind in several seasons, though it arrives alongside harvest pressure on hard red winter supplies.
— Report suggests cattle herd may be near a turning point
Beef-on-dairy growth clouds traditional signals of herd rebuilding
Jason Franken of the University of Missouri, writing in farmdoc daily (link), says USDA’s July 24 midyear Cattle Inventory report could offer the first meaningful indication that the long contraction in the U.S. cattle herd is approaching an end—although changes in dairy breeding practices are making the conventional indicators increasingly difficult to interpret.
A model using cow slaughter and the share of heifers in feedlots projects the July 1 U.S. cattle inventory at 93.88 million head, essentially unchanged from a year earlier. Through June, slaughter represented about 6.4% of the January cow inventory, while heifers accounted for an elevated 37.3% of cattle on feed. Historically, high cow slaughter and a large heifer share have been associated with continued herd contraction because producers are removing breeding animals rather than retaining them for expansion.
But Franken cautions that the heifer statistic may now overstate liquidation. Dairy farms are increasingly using sexed semen to produce replacement females while breeding other cows to beef bulls, creating more beef-on-dairy calves for feedlots. Beef-on-dairy animals are estimated to represent about 10% of feeder cattle. Adjusting the reported heifer share for that structural change would place the indicator closer to levels historically associated with herd rebuilding—and could point to a larger cattle inventory than the model’s unadjusted estimate.
Meanwhile, cattle feeders are partially offsetting limited animal numbers by feeding cattle longer and marketing them at heavier weights. Favorable cattle prices relative to feed costs are encouraging that strategy, while USDA’s projected corn price of about $4.40 per bushel suggests feed costs may remain manageable enough to support elevated slaughter weights.
That weight-driven production response is expected to soften — but not eliminate — the effect of historically tight cattle supplies. Franken anticipates U.S. beef production declining only about 3% during the next two years. Exports could fall closer to 10%, leaving more limited supplies available to satisfy domestic consumption of roughly 59 pounds per person. Beef cold stocks are already near seasonal lows and about 1% below a year earlier, reinforcing the outlook for persistently high retail and wholesale prices.
The report forecasts slaughter-steer prices averaging $251.60 per hundredweight during the third quarter and $245.68 during the fourth quarter of 2026, before rising to $250.42 and $258.44 in the first two quarters of 2027. Prices for 600- to 700-pound feeder steers are projected near $420.59 and $410.13 during the final two quarters of 2026, followed by $439.14 and $450.17 during the first half of 2027. Those projections rest on low inventories, moderate feed costs and resilient domestic beef demand.
Perspective: The most important conclusion may not be whether the July inventory is fractionally higher or lower than last year, but whether the industry’s underlying breeding herd is stabilizing. A nearly unchanged total inventory would suggest liquidation is losing momentum, but it would not necessarily confirm that a sustained expansion has begun.
Beef-on-dairy production is also weakening the usefulness of the traditional heifer-on-feed measure. A high heifer share once offered a relatively direct signal that females were being sent to slaughter instead of retained for breeding. Today, more of those heifers may never have been intended for the breeding herd. Analysts may therefore need to place greater weight on beef-cow numbers, replacement-heifer inventories, cow slaughter and eventual calf-crop data.
Even when rebuilding begins, beef supplies could tighten further before they expand. Retaining more heifers removes animals from near-term slaughter and reduces beef production before the resulting calves reach market. That means the first convincing signs of herd expansion could initially be supportive—not bearish—for cattle prices.
Of note: The principal downside risk is demand. Current price forecasts assume consumers continue paying historically high beef prices. If economic conditions weaken or consumers shift more aggressively toward pork and poultry, cattle prices could retreat even without a rapid increase in herd size. Conversely, continued strong demand combined with delayed rebuilding would leave the market vulnerable to another period of exceptionally tight supplies and elevated prices.
— Agriculture markets yesterday:
| Commodity | Contract month | Closing price July 22 | Difference from July 21 |
| Corn | December | $4.84 3/4 | +9 1/2 cents |
| Soybeans | November | $12.39 | +16 1/4 cents |
| Soybean meal | September | $329.60 | +$5.30 |
| Soybean oil | September | 74.53 cents | +112 points |
| SRW wheat | September | $7.05 3/4 | +27 3/4 cents |
| HRW wheat | September | $7.63 1/2 | +30 1/2 cents |
| Spring wheat | September | $7.29 | +24 3/4 cents |
| Cotton | December | 81.11 cents | +69 points |
| Live cattle | August | $223.20 | -$3.475 |
| Feeder cattle | August | $341.175 | -$8.375 |
| Lean hogs | August | $101.45 | -$0.05 |
| ENERGY MARKETS & POLICY |
— Thursday: Brent oil hits $100 as tanker attacks deepen Middle East supply fears
Escalating U.S./Iran threats raise risks to shipping and regional energy assets
WTI Crude oil surged over 5% to around $92 per barrel Thursday, rising for a fifth consecutive session to its highest level since June 10 as another tanker attack near Saudi Arabia intensified fears of a broader disruption to Middle East energy supplies. Brent crude oil surged over 6% to just over $100 per barrel.
The UK Maritime Trade Operations agency said a tanker caught fire after being struck roughly 70 nautical miles southwest of Al Shuqaiq. Yemen’s Houthi rebels claimed they attacked two Saudi tankers with drones and missiles, alleging the vessels had violated the group’s maritime blockade.
The attack followed President Donald Trump’s warning that the U.S. would strike an Iranian bridge or power plant each time Tehran attacked a vessel in the Strait of Hormuz. The threat signaled a new escalation after the collapse of the U.S.-Iran ceasefire. Iran responded that it would target U.S.-linked infrastructure and energy assets across the region if Washington carried out those strikes.
Perspective: The oil rally increasingly reflects the risk of a self-reinforcing cycle of attacks and retaliation rather than a confirmed large-scale loss of crude production. Markets are pricing in the possibility that violence could spread from individual tankers to Saudi export facilities, regional pipelines, refineries or other infrastructure critical to global supply.
The Houthi involvement also broadens the threat beyond the Strait of Hormuz by keeping shipping risks elevated near the Red Sea and Bab el-Mandeb (see next item for details). Any simultaneous disruption at multiple maritime chokepoints would complicate tanker routing, raise insurance and freight costs and delay deliveries even if production itself remained intact.
Bottom line: Oil prices could remain supported as long as the attacks continue and Washington and Tehran exchange threats against infrastructure. However, without a measurable reduction in exports, part of the nearly five-session advance remains a geopolitical risk premium that could retreat sharply if diplomacy resumes or shipping continues largely uninterrupted.
— Wednesday: Middle East conflict pushes oil to highest level since June
Threats to two major shipping chokepoints deepen supply concerns despite a U.S. inventory increase
Oil prices jumped more than 3% Wednesday as intensifying conflict between the United States and Iran increased fears of disruptions to Middle East crude production and shipping. Brent crude settled at $94.07 per barrel, up 3.36%, while West Texas Intermediate rose 2.95% to $86.83, with both benchmarks reaching their highest levels since mid-June.
The market’s risk premium is expanding because commercial traffic could be disrupted simultaneously through the Strait of Hormuz and the Bab el-Mandeb Strait — two vital routes for global oil and fuel shipments. Shipping companies are rerouting vessels away from high-risk areas, while refiners are seeking alternative supply channels, adding costs and potentially delaying deliveries.
Prompt crude prices remain above later-dated contracts, signaling that traders see the greatest supply risk in the near term. A 2-million-barrel increase in U.S. crude inventories limited the rally but did not fundamentally ease concerns. With refinery activity slowing, exports declining and imports increasing, the build was viewed as less important than the possibility that prolonged fighting could restrict global energy flows and keep prices elevated.
| TRADE POLICY |
— Trump’s Canada tariffs set Aug. 19 deadline, with farm input carveouts
Potash and fertilizer exemptions ease risks, but retaliation could hit exports
The Trump administration published three proclamations Thursday imposing additional 50% tariffs on nearly $20 billion in Canadian imports, opening a 27-day window for Washington and Ottawa to resolve disputes involving U.S. alcohol, dairy products and motor vehicles before the duties take effect at 12:01 a.m. ET Aug. 19. Here are the links in response to Canadian actions on imports of U.S. alcohol (link), dairy (link) and motor vehicles (link).
President Donald Trump signed the proclamations July 20 under Section 338 of the Tariff Act of 1930, a provision allowing tariffs of up to 50% against countries found to discriminate against U.S. commerce. The action is the first known presidential use of Section 338 and gives Trump authority to suspend, modify or revoke the tariffs if Canada changes the policies at issue.
Despite being organized around disputes over alcohol, dairy and autos, the duties extend well beyond those products. More than 550 tariff classifications cover Canadian goods including natural honey, planting seeds, flowers, hops, animal-derived products, dairy goods, cement, chemicals, plastics, wood products, machinery, furniture and sporting equipment. The duties will apply even when a product otherwise qualifies for preferential treatment under the U.S.-Mexico-Canada Agreement.
The administration argues that Canadian provinces have discriminated against U.S. alcoholic beverages by removing them from government-controlled distribution systems; that Canada provides European cheese exporters more favorable access to its tariff-rate quotas than U.S. suppliers; and that Canadian tariffs and company-specific quotas penalize U.S. automakers, particularly companies shifting production from Canada to the United States. U.S. alcohol exports to Canada fell approximately 81% after the provincial restrictions began, while U.S. vehicle exports declined about 22%, according to the proclamations.
Canadian Prime Minister Mark Carney said he and Trump agreed to accelerate negotiations during the weeks before the tariffs take effect. U.S. Trade Representative Jamieson Greer told the Senate Finance Committee Wednesday that the countries have not yet resolved their differences and that a complete USMCA renegotiation could stretch into 2027, although the administration hopes to develop interim arrangements with Canada and Mexico by the end of 2026.
Key farm exemptions. The most important detail for U.S. farmers is what the administration left out. Energy products, potash, fish, critical minerals, products already covered by Section 232 tariffs and qualifying civil aircraft are exempt from the new 50% duties. Fertilizer products including potash, sulfur and sulfuric acid do not appear on the tariff lists. Canadian weaner pigs and other live swine remain excluded from the new tariff coverage, avoiding disruption to the integrated U.S.-Canadian hog supply chain.
The potash exemption avoids an immediate and potentially severe increase in fertilizer costs for U.S. crop producers. Exempting Canadian energy also limits direct tariff exposure for critical supplies such as crude oil, natural gas and electricity. Those carveouts indicate that the administration constructed the product lists partly to avoid disrupting essential U.S. input markets while retaining leverage over Ottawa.
The protection is not complete. Canadian honey, planting seeds, horticultural products, hops, animal-derived ingredients and some processed agricultural products are included, potentially increasing costs or reducing competition in specialized U.S. agricultural markets.
The larger danger for farmers is Canadian retaliation. Canada received $28.2 billion in U.S. agricultural exports during 2025 and accounted for 16.7% of total U.S. farm exports. Leading shipments included ethanol, pet food, beef, live cattle and pork. A Canadian response targeting politically sensitive U.S. commodities could therefore outweigh the direct effect of the relatively narrow U.S. tariff lists.
Perspective: The structure of the action suggests that Aug. 19 is intended primarily as a negotiating deadline rather than the beginning of a comprehensive economic break with Canada. Only about 5% of Canadian exports to the United States are covered, while energy, fertilizer and other difficult-to-replace supplies have been shielded. At the same time, the 50% rate is high enough to halt much of the affected trade if it is actually collected.
A settlement would likely require movement on all three complaints. Ottawa could modify eligibility rules for its cheese quotas and alter its auto tariff and quota system. The alcohol dispute may be harder because provincial governments — not Carney’s federal government — control most liquor purchasing and retailing. Several premiers remain strongly opposed to returning U.S. products to provincial shelves, limiting Carney’s ability to deliver a nationwide concession.
For agriculture, the outcome is mixed. The tariff threat could give U.S. dairy exporters additional access to Canada if Ottawa changes its quota administration. But that potential gain could be overwhelmed if the dispute broadens and Canada retaliates against U.S. meat, ethanol, grain or processed-food exports. The fertilizer exemptions reduce the immediate production-cost risk, but they do not insulate farm income from a wider deterioration in North American trade.
The narrow tariff coverage, farm input exemptions and statutory power to modify the proclamations provide a clear off-ramp. Whether it is used will depend on whether Carney can coordinate concessions with Canada’s provinces and whether the Trump administration is prepared to accept an interim package rather than a broader USMCA agreement.
— Palmoil trade relief collides with new fatty acid duties
Import relief promised to palm oil suppliers may be overtaken by new trade cases
The Commerce Department has preliminarily imposed countervailing duties of 16.48% on certain fatty acids from Indonesia and 4.32% on imports from Malaysia, opening another tariff front for widely used ingredients derived largely from palm oil. The duties respond to a petition from U.S. producer Vantage Specialty Chemicals, which alleges that government subsidies give foreign suppliers an unfair advantage.
The decision illustrates the increasingly complicated — and potentially contradictory — nature of the Trump administration’s trade policy. Washington previously agreed to exempt palm oil and some fatty acids from tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Those duties were later overturned by the Supreme Court, however, and the promised exemptions were never implemented.
The same products now could face several overlapping trade actions. In addition to Commerce’s countervailing-duty investigation, preliminary antidumping duties are expected in mid-September. Palm oil and fatty acids also remain subject to temporary 10% Section 122 tariffs that expire later this week and could be replaced by duties resulting from the Office of the U.S. Trade Representative’s Section 301 investigations.
That stacking of tariffs is the central concern for U.S. manufacturers. Fatty acids are used in soaps, cosmetics, cleaning products, animal feed, food additives, lubricants and other industrial goods. Higher import costs therefore would spread well beyond palm-oil processors, potentially raising expenses for consumer-product companies, livestock producers and manufacturers that may have limited alternative supplies.
The dispute also highlights a disagreement over whether Vantage’s difficulties reflect foreign subsidies or changing market conditions. Vantage produces fatty acids from tallow and vegetable oils, while opponents contend the company depends heavily on beef tallow at a time when some customers prefer plant-based ingredients. They also argue that biofuel incentives have increased demand and prices for tallow, weakening its competitiveness against palm-oil-based feedstocks.
That argument could become important in the antidumping phase. Commerce will examine whether imports are sold below fair value, but downstream users are likely to contend that price differences stem from feedstock economics and consumer preferences rather than unfair foreign pricing.
Indonesia and Malaysia are separately seeking exemptions from USTR’s proposed 10% Section 301 tariffs. Palm-oil interests argue that the products meet USTR’s stated criteria for excluding raw materials that are unavailable or cannot be produced in sufficient quantities domestically. Because commercial palm trees grow in equatorial climates, the U.S. has little ability to replace Indonesian and Malaysian supplies with domestic palm oil.
USTR, however, has cited Labor Department findings linking palm oil production in Indonesia and Malaysia to forced-labor risks. That creates a broader policy conflict: tariff exclusions could protect U.S. manufacturers from ingredient shortages, while duties could be used to pressure suppliers and governments over labor practices. The proposed tariff list does not consistently apply that rationale across all goods associated with forced labor, potentially strengthening industry arguments that palm-oil derivatives should be reconsidered.
Perspective: The preliminary duties are less significant individually than as part of a cumulative tariff burden. A 16.48% countervailing duty on Indonesian fatty acids, combined with possible antidumping and Section 301 tariffs, could materially alter sourcing decisions and raise costs throughout U.S. manufacturing and agriculture. It also undercuts the certainty Indonesia and Malaysia believed they had secured through earlier tariff negotiations.
The administration ultimately must decide whether fatty acids are strategic imports that should remain affordable and available, or trade-sensitive goods that warrant protection and leverage. Unless Commerce and USTR coordinate their actions, the result could be multiple tariffs imposed on products the administration previously agreed should receive preferential treatment. Final antidumping and countervailing-duty decisions could arrive in the first quarter of next year, but the more immediate test will be whether USTR excludes palm oil and its derivatives from the next round of Section 301 tariffs.
— Brazil tariffs reveal limits of Trump trade strategy
Broad exemptions protect U.S. buyers but weaken Washington’s leverage
Monica de Bolle, senior fellow at the Peterson Institute for International Economics (PIIE), writing in the institute’s RealTime Economics blog, notes the Trump administration’s new 25% tariff on selected Brazilian goods demonstrates the limits of using import duties as negotiating leverage. Although the headline rate is steep, exemptions and existing trade provisions leave roughly two-thirds of Brazilian exports to the United States outside the new tariff.
USTR exempted products including coffee, orange juice, beef, cocoa, iron ore, petroleum, wood pulp and civilian aircraft, while steel, aluminum, automobiles and other products are already covered by separate Section 232 tariffs. The carve-outs reflect U.S. dependence on Brazilian supplies and concerns that broader duties would raise prices or disrupt domestic manufacturers.
De Bolle also argues that some U.S. demands would be difficult for Brazil to accept because of its obligations within Mercosur and other regional trade arrangements. Washington has criticized Brazilian tariff preferences for countries including Mexico and India, but Brazil cannot easily grant the United States exclusive concessions without involving its trading partners.
The action is an important test of the administration’s post-emergency-powers tariff strategy. Section 301 provides a stronger legal foundation, but it requires investigations, public comment and findings tied to specific trade practices. That process gives U.S. industries more opportunity to seek exemptions, making tariffs narrower and less economically disruptive—but also less powerful as leverage.
Perspective: The Brazil case exposes the central contradiction in Trump’s tariff strategy. The administration wants duties strong enough to force concessions but limited enough to avoid harming U.S. consumers and companies. The more products Washington exempts, the less pressure Brazil faces.
The United States also ran a sizable goods trade surplus with Brazil in 2025, weakening the argument that tariffs are needed to correct an imbalanced relationship. Brazil could respond by expanding trade with China, India and other markets rather than accepting U.S. demands.
For agriculture, exemptions for beef, coffee, fruit and cocoa reduce immediate food-price risks. Ethanol remains a potential negotiating opportunity for U.S. producers, but progress is more likely to come through talks than escalating tariffs.
Upshot: The broader lesson is that Section 301 may be legally more durable than emergency tariff powers, but it is slower, more targeted and more vulnerable to exclusions. Brazil may therefore become a model for future U.S. trade actions: aggressive headline tariffs followed by extensive carve-outs and prolonged product-by-product negotiations.
| FOOD POLICY & FOOD INDUSTRY |
— FDA revokes dormant Orange B approval, targets Citrus Red No. 2
Actions remove little-used dyes while advancing the broader MAHA phaseout
The Food and Drug Administration (FDA) is formally removing Orange B from the U.S. food rulebook and beginning the same process for Citrus Red No. 2, giving the Trump administration two concrete regulatory victories in its campaign against petroleum-based food colors. Orange B’s revocation becomes effective Sept. 8, while comments on the proposed Citrus Red No. 2 action are due Aug. 24.
The practical effect on food manufacturers should be minimal because both dyes had largely disappeared from commerce. Orange B was authorized only for coloring the casings or surfaces of frankfurters and sausages, and FDA records show that no batch has been certified since 1978. Because every batch required FDA certification before it could legally be used, the absence of certification for nearly five decades effectively confirms that the dye was already out of the market.
FDA received 16 comments on its Orange B proposal (link), with all but one supporting revocation and none providing evidence that the dye or any certified batches remained in use. The agency noted that potential health implications were evaluated by the manufacturer and others in the late 1970s, contributing to the end of production, but emphasized that the final order is based on abandonment rather than a new determination that Orange B is unsafe.
Citrus Red No. 2 has an equally narrow authorization. It may be applied only to the skins of mature oranges generally intended for the fresh market, not oranges destined for processing, and the finished fruit may contain no more than 2 parts per million. FDA says it has not certified a batch since 2020, leading the agency to tentatively conclude that the industry has abandoned the colorant.
The Citrus Red No. 2 action is not yet final (link). FDA is proposing that a final order take effect 90 days after publication, while potentially allowing one additional year of enforcement discretion for domestically produced and imported food products so any remaining certified supplies can be depleted. That extended transition suggests FDA is leaving room for the possibility that limited inventories or products remain in international commerce, even though no new batch-certification requests have been filed in six years.
Perspective: The immediate public-health and commercial consequences are limited because the two approvals were essentially regulatory relics. Their greater importance is political and procedural: FDA is converting parts of the administration’s food-dye agenda into binding regulatory actions rather than relying solely on voluntary company pledges.
Orange B and Citrus Red No. 2 are also the easiest dyes to remove because they are narrowly authorized and apparently unused. The more consequential test will be the transition away from the six colors still common in foods—Blue Nos. 1 and 2, Green No. 3, Red No. 40 and Yellow Nos. 5 and 6. FDA is working with manufacturers and retailers to eliminate those dyes by the end of 2027, but substitutions can involve higher costs, supply constraints and difficulties reproducing certain shades, particularly blue.
| CONGRESS |
— House heads home as Senate inherits a crowded pre-recess agenda
Senate eyes a funding deal and NDAA retry before its Aug. 10 recess
The House is poised to begin its extended August recess after a brief Thursday morning session that includes final action on a resolution from Rep. Pramila Jayapal (D-Wash.) directing President Donald Trump to remove U.S. forces from unauthorized hostilities with Iran. The House convenes at 9 a.m. ET, with its first and last votes expected around 10:15 a.m.
The departure caps a compressed week in which House Republicans approved a fiscal 2027 stopgap spending bill, a $1.15 trillion National Defense Authorization Act (NDAA) and a budget resolution intended to begin a third reconciliation effort. But all three measures face substantial revision — or no immediate action at all — in the Senate.
Of note: The House-approved budget framework would eventually authorize reconciliation legislation containing roughly $60 billion for the Pentagon, $13 billion for other national security needs, $12 billion in farm assistance and $10 billion for voting-law incentives. The resolution passed 216-214, underscoring how little room Speaker Mike Johnson (R-La.) has for defections even before the Senate begins rewriting the proposal.
The Senate’s first priority is likely to be government funding. The House continuing resolution would keep agencies operating through Dec. 4, but Senate Majority Leader John Thune (R-S.D.) is not expected simply to take up the House bill. Senate Republicans are negotiating their own version with Democrats, and Thune has said he hopes to consider a bipartisan agreement before the chamber leaves Washington in early August. Government funding otherwise expires at midnight Sept. 30.
Senators from both parties appear increasingly interested in clearing a stopgap before the midterm campaign intensifies. Senate Appropriations Committee Chair Susan Collins (R-Maine) is discussing a measure that could include additional defense money, although attaching funding for the Iran conflict could jeopardize Democratic support. The Senate’s scheduled state work period runs from Aug. 10 through Sept. 11, giving negotiators roughly two weeks to act before leaving Washington.
If the Senate passes a revised funding bill before departing, the House’s Aug. 31-Sept. 3 session would become the first opportunity to accept the changes. That brief return is therefore more than a calendar formality: It could be the principal window for sending a stopgap measure to Trump before both chambers enter their final September sprint. The Senate is not scheduled to return until Sept. 14.
The Senate also is expected to make another attempt to advance the NDAA before its recess. Democrats blocked debate on the Senate bill July 14 in a 50-46 cloture vote, objecting to the unauthorized Iran war, the defense spending level and other provisions. Republican leaders have pledged to try again before leaving Washington.
The House complicated that process by attaching elements of the SAVE America Act to its defense bill. Those voting provisions lack the 60 Senate votes normally required to overcome a filibuster and are likely to be removed or substantially altered. Even if the Senate advances its own NDAA before Aug. 7, the two chambers would still have to negotiate a compromise later in the year.
The reconciliation resolution is the least likely of the major House measures to receive immediate Senate action. Thune has indicated the chamber could hold the resolution until September as a backup vehicle in case bipartisan funding negotiations collapse. Senate Budget Committee Chair Ron Johnson (R-Wis.) has acknowledged that senators have not developed the package in detail, while Republican concerns remain divided between members demanding more defense spending and fiscal conservatives demanding offsets.
The budget resolution also would expose senators to a lengthy vote-a-rama and require the House and Senate to adopt identical instructions before committees could begin drafting the actual reconciliation bill. Any Senate changes would force another House vote. Provisions tied to voting policy also could run afoul of the Senate’s Byrd Rule, which limits reconciliation to measures with a sufficient budgetary impact.
Meanwhile, the Senate has its own Iran war-powers vote scheduled Thursday. At approximately 11:30 a.m., senators are expected to decide whether to discharge a resolution from Sen. Chris Van Hollen (D-Md.) directing the removal of U.S. forces from unauthorized hostilities with Iran.
Perspective: The House is leaving Washington after passing an ambitious package but without resolving the central disagreements that will determine whether any of it becomes law. The Senate’s more immediate objective is likely to be a bipartisan continuing resolution, followed by another attempt to start debate on the NDAA. Reconciliation will remain in reserve as leverage—and as a potential partisan shutdown escape route—rather than moving quickly.
The election calendar strengthens the case for a relatively clean funding extension because neither party wants a shutdown dominating the final weeks before Nov. 3. But that same political pressure makes agreement on Iran funding, voting rules and an unoffset $95 billion reconciliation package more difficult. The result is a familiar congressional pattern: The House has completed its opening moves, but the decisive negotiations will occur in the Senate, with only a four-day House session around Labor Day available to process whatever senators send back.
| WEATHER |
— NWS outlook: Tropical Storm Bertha may lead to isolated flash flooding, tropical storm conditions, and coastal flooding along the Gulf Coast and into
southern Texas… …Risk of flash flooding expected across portions of the southern Mid-Atlantic/Carolinas, Tennessee Valley, and the Southeast through Friday… …Monsoonal thunderstorms continue over the Southwest, Great Basin and parts of the Plains… …Hazardous heat continues over parts of the Southern Tier; builds over the Great Basin and Northern Plains Friday.
— Corn Belt faces whiplash from record cool to dangerous heat
Rain offers brief relief before triple-digit heat and storm volatility return
The central U.S. crop belt is entering a sharp weather transition, with near-record cooling and beneficial rainfall offering only a temporary reprieve before intense heat returns this weekend. High temperatures will remain largely in the 70s across the Corn Belt during the next 48 to 72 hours, following record-low readings in some areas. A heavy thunderstorm system is also expected to deliver more than an inch of rain to drought-stressed portions of Nebraska, northern Kansas and southwestern Iowa.
That rainfall should stabilize corn and soybean yield prospects in the hardest-hit western areas, but it will not fully replenish depleted soil moisture reserves. The benefit could prove short-lived as temperatures rapidly climb above 100 degrees across the Plains and western Corn Belt during the July 26-30 period. Crop stress is expected to peak Monday as extreme heat accelerates moisture losses and raises concerns about corn grain fill, soybean pod development and declining yield potential in fields that miss the heaviest rainfall.
The forecast becomes more volatile as the upper-air ridge weakens during the 11- to 15-day period. Multiple rounds of “ridge-rider” thunderstorms are projected to target the northeastern Corn Belt around July 26-27 before spreading into central production areas through early August. These storms could provide additional moisture, but their scattered nature means coverage will be uneven. Strong winds, hail and excessive rainfall may also create localized crop damage and complicate early harvest preparations.
The northern Plains face the most persistent threat. Continued heat and a largely dry 10-day forecast are expected to further reduce spring wheat condition ratings and trim yield expectations. Meanwhile, Tropical Storm Bertha’s second landfall in southeastern Texas is not expected to deliver enough inland rainfall to materially improve low Mid-South river levels.
Upshot: The broader outlook is supportive for grain-market weather risk premiums. Near-term rain may limit immediate buying, but the return of triple-digit heat, deteriorating spring wheat conditions and uncertainty over thunderstorm coverage should keep traders focused on yield losses and regional crop variability. The key question is whether late-July storms provide broad, soaking rainfall or merely reinforce a pattern of sharply divided crop prospects.
