Many Markets Sharply Higher Amid Signs Washington Moving Toward Broad De-escalation of Trade Tensions
Trump hints at dropping China Phase One trade deal probe
Link: U.S. Offers Tariff Relief as China Signals Return to U.S. Soybeans
— Broader Farm Buys Possible
Link: The Week Ahead: Gov’t Shutdown: Back to the Brink
Link: Trump’s Asia Trade Blitz: U.S./China Deal Spurs Wave of Regional Accords
Link: Bessent: Soybean Farmers to Benefit from U.S./China Trade Deal Finalized
Alongside TikTok Agreement
Link: Trump Boosts Canada Tariffs After Ontario Ad
Link: Weekend Updates, Oct. 25: Trump to Offer Concessions to China
Link: Video: Wiesemeyer’s Perspectives, Oct. 24
Link: Audio: Wiesemeyer’s Perspectives, Oct. 24
Today’s Updates:
UP FRONT
— U.S. and China reach framework ahead of Trump/Xi summit
— What is China getting from backing off its rare earth threats?
— Trump hints at dropping China Phase One trade deal probe
— Trump seals major Southeast Asia trade deals, offers tariff carrots
to ASEAN exporters
— USMEF welcomes new U.S. trade deals with Southeast Asia
— U.S./South Korea trade deal faces delay ahead of Trump visit
— Lula predicts swift breakthrough in U.S./Brazil disputes
— Takaichi makes diplomatic debut as Trump arrives in Japan
— Canada’s Carney seeks to calm markets amid tariff tensions
— USDA to resume data flow after shutdown ends
FINANCIAL MARKETS
— Equities today: Trade policy progress lifts Asian and European stocks to records
— Global economy enters uncertain week as central banks tread carefully
— Markets see smooth 2026 Fed cuts, but officials signal a bumpier road ahead
— Bessent names Fed Chair finalists as Trump eyes end-of-year pick
AG MARKETS
— China slows soybean purchases as Trump/Xi summit looms
— Farm machinery market faces deep contraction as credit quality deteriorates
RULES AND REGULATIONS
— USDA advances two key rules to OMB despite shutdown
ENERGY MARKETS & POLICY
— Oil prices dip as U.S./China trade framework eases market anxiety
— Perspective: API pulls back support for year-round E15 sales, citing regulatory
and market concerns
TRADE POLICY
— Senate Democrats again move to cancel Trump’s emergency tariff declarations
CHINA
— China industrial profits keep up strong growth
POLITICS & ELECTIONS
— Milei’s party scores major comeback in Argentina’s midterm elections
RURAL HEALTH CARE
— Why many farmers rely on ObamaCare/Affordable Care Act coverage
NEW WORLD SCREWWORM
— FDA grants emergency use for Elanco’s flea and tick drug to treat New World
Screwworm in dogs
WEATHER
— NWS outlook: Unsettled weather and cool temperatures continue through
Southeast and Appalachians
Updates: Policy/News/Markets, Oct. 27, 2025
Up frontGlobal markets opened sharply higher Monday amid signs that Washington is moving toward a broad de-escalation of trade tensions. Stocks, cryptocurrencies, and oil all rallied as investors digested reports of multiple potential trade breakthroughs — most notably between the United States and China. Check the links above to several special reports we released over the newsy weekend. Treasury Secretary Scott Bessent said over the weekend that Beijing had agreed in principle to resume large-scale U.S. soybean purchases, a major relief for farm-state producers hit hard by the recent pullback in Chinese demand. The two sides also made progress on several contentious issues, including rare earth export curbs, shipping taxes, fentanyl, and TikTok’s U.S. operations. President Donald Trump and China’s President Xi Jinping are slated to meet Thursday during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea — potentially sealing a framework agreement before new tariffs take effect. “I think we’re gonna have a successful transaction for both countries,” Trump said as he departed for Japan. The market reaction was immediate:• Nvidia shares surged in premarket trading, reflecting optimism that eased tech export barriers could boost chip sales.• U.S.-listed rare earth miners, including Critical Metals and USA Rare Earth, fell after recent gains as traders bet that normalized trade with China could cool domestic supply-chain protectionism. Beyond China, the White House announced additional progress on regional trade deals:• A Vietnam agreement is nearly finalized, imposing a 20% tariff on most Vietnamese exports.• Malaysia, Cambodia, and Thailand secured tariff caps at 19%, a move analysts see as part of Washington’s selective tariff alignment strategy.• In the Americas, Trump said his weekend meeting with Brazil’s President Luiz Inácio Lula da Silva went “very well,” fueling speculation that Washington may roll back steep levies on Brazilian goods. Still, questions remain about the durability and economic impact of these deals — particularly their influence on global inflation and trade flows. Investors are betting that, at least for now, the world’s two largest economies are edging closer to a fragile but market-friendly truce. Meanwhile, President Javier Milei scored a decisive midterm victory in Argentina, strengthening his mandate to push sweeping free-market reforms and marking a foreign-policy win for President Trump, whose Treasury Secretary Scott Bessent extended a $20 billion lifeline to Buenos Aires before the vote. Milei’s La Libertad Avanza party captured more than 40% of the vote, giving him congressional leverage to overhaul tax, pension, and labor systems. Markets responded favorably, with Argentine bonds and bank stocks rallying on expectations of economic stabilization. Yet the nation’s depleted dollar reserves and looming debts to the IMF and China threaten to rekindle inflation, even as analysts urge a more realistic exchange rate. Trump hailed Milei’s success as vindication of U.S. support, but critics warn Washington’s costly bid to counter China’s influence and secure access to Argentina’s lithium and copper could backfire politically amid a government shutdown and domestic backlash over the bailout.—U.S. and China reach framework ahead of Trump/Xi summitTalks in Malaysia set stage for easing tensions as Beijing signals initial consensus on key issues Talks between the U.S. and China in Malaysia over the weekend produced a framework paving the way for Thursday’s meeting between President Donald Trump and President Xi Jinping. Beijing said the two sides reached an initial consensus on several critical matters, including export controls, fentanyl, and shipping levies. U.S. Treasury Secretary Scott Bessent told CBS that Trump’s threat of 100% tariffs is “effectively off the table,” adding that he expects China to make “substantial” purchases of U.S. soybeans (and hopefully other commodities) and postpone implementation of planned rare earth export curbs. —What is China getting from backing off its rare earth threats? U.S. Trade Representative Jamieson Greer told Fox News Sunday that the two sides found “a path forward where we can have more access to rare earths from China” by trying to “balance out our trade deficit with sales from the United States.” The Washington Post says “that sounds like an allusion to further loosening restrictions on the sale of high-end chips needed to power artificial intelligence.” —Trump hints at dropping China Phase One trade deal probePresident says Xi meeting could convince him to forgo Section 301 investigation into Beijing’s compliance with 2020 accord President Donald Trump suggested he may abandon an investigation into whether China violated the terms of his first-term trade deal, depending on the outcome of his upcoming talks with Chinese President Xi Jinping. “If it all works out well, I’m sure they’ll be able to talk us out of it,” Trump said Monday aboard Air Force One. “I have a feeling they’ll talk us out of it.” U.S. Trade Representative Jamieson Greer told reporters that the decision to continue or drop the probe ultimately rests with the president. The investigation, launched ahead of Trump’s meeting with Xi, was initiated under Section 301 of the Trade Act of 1974, which gives the administration authority to impose tariffs on nations engaged in unfair trade practices. While such investigations typically last several months, they serve as the legal foundation for the president to act unilaterally on tariffs. Trump indicated optimism that talks with Xi will yield a framework to reduce tensions. “I think we’re gonna have a successful transaction for both countries,” he said of the planned meeting Thursday. Trump also said he expects Xi to approve the sale of ByteDance Ltd.’s U.S. TikTok operations, and that he has “pretty much agreed” to visit China early next year, with Xi expected to make a reciprocal visit to Washington or Mar-a-Lago later in 2026. —Trump seals major Southeast Asia trade deals, offers tariff carrots to ASEAN exportersWhile maintaining a general 19–20% U.S. tariff rate on exports from Thailand, Cambodia, Vietnam and Malaysia, the administration dangled exemptions and special treatment for key goods as part of a flurry of trade and critical-minerals deals with Southeast Asian governments Trade deals and supply-chain pacts. In recent days at the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur, President Donald Trump signed trade and supply-chain pacts with Thailand, Cambodia, Vietnam and Malaysia, tying exports from those countries to selective tariff relief. Key deal elements include:•Framework agreements with Thailand and Vietnam and reciprocal agreements with Malaysia and Cambodia, under which the U.S. will keep most products at a ~19–20% tariff rate but may eliminate levies for specific exports.• Thailand agreed to drop barriers on about 99% of goods for U.S. exporters — while the U.S. retains the 19% tariff on Thai exports but will explore item-by-item exemptions.• Malaysia pledged not to impose bans or quotas on critical-minerals exports to the U.S., and simultaneously secured exemptions for commodities such as palm oil, cacao and rubber.• Southeast Asian governments committed to facilitate U.S. investment, enhance digital-trade cooperation, and align vehicle-safety/emissions standards to benefit U.S. exports of both industrial and agricultural goods. Why the moves matter:•These deals reflect the U.S. strategy of balanced and reciprocal trade, i.e., using tariffs as leverage to re-shape supply chains and extract commitments from export-reliant countries.•For Southeast Asia, whose economies are highly exposed to U.S. demand and reliant on supply-chain relocation away from China, the offer of tariff carve-outs provides a way to navigate Washington’s broader tariff regime without suffering the full force of the levies.• The U.S. is signaling that access to its market hinges on deeper cooperation: removing export barriers, aligning regulatory regimes, and purchasing U.S. goods or services. Risks and nuances:•Though specific goods may enjoy tariff exemptions, the broad U.S. tariff rate remains in place at ~19–20% for now — meaning the relief is selective, not universal.•Domestic concerns: The pledge-and-purchase commitments by Southeast Asian partners could create political economy tensions domestically — especially if large volumes of U.S. goods displace regional competitors or local producers.•The deals may complicate relations with China, as supply-chain diversification and import commitments align with Washington’s China-containment strategy.•Implementation will depend on investigation and monitoring (e.g., rules of origin, transshipment controls) to ensure goods claiming exemptions do indeed meet U.S. criteria. Bottom Line: Trump didn’t just issue another sweeping tariff threat — he paired it with tangible trade-and-investment carrots specifically targeted at key Southeast Asian exporters. By doing so, Washington is offering a path out of the tariff firewall for those willing to deepen alignment with U.S. trade, supply-chain and regulatory objectives. At the same time, the selective nature of the relief means these countries will need to deliver concrete commitments and allow ongoing scrutiny of their export practices. —USMEF welcomes new U.S. trade deals with Southeast AsiaFederation praises USTR’s agreements with Malaysia, Cambodia, Thailand, and Vietnam as critical to expanding U.S. red meat access amid China market closure The U.S. Meat Export Federation (USMEF) expressed strong support for the Office of the U.S. Trade Representative’s announcement of new reciprocal trade agreements with Malaysia and Cambodia, and frameworks for similar pacts with Thailand and Vietnam. In a statement, USMEF President and CEO Dan Halstrom commended USTR’s “tireless efforts” to eliminate tariff and non-tariff barriers that have long limited U.S. beef and pork exports to the ASEAN region. He noted that with the U.S. beef industry currently shut out of China, expanded access to Southeast Asia is “desperately needed” to create competition for cuts such as short plate, chuck short rib, rib fingers, and omasum — items highly valued in Asian markets but less popular domestically. Halstrom emphasized that pork exports have been vital to U.S. industry growth, supporting both domestic supply and whole-animal utilization through sales of products like feet, stomachs, brisket bones, and bone-in hams. He said the ASEAN market has become “more critical than ever as an alternative market to China,” especially for pork variety meats. While U.S. beef and pork currently hold only minor import shares in Thailand, Vietnam, Malaysia, and Cambodia due to market restrictions, Halstrom said the growth potential is “significant” once these barriers are lifted under President Trump’s new trade deals. USMEF is urging swift implementation of the finalized agreements and continued progress with Thailand and Vietnam, as well as follow-through on the U.S.-Indonesia joint statement (link) announced in July. USMEF also released a fact sheet (link) providing detailed context on the agreements and outlining the projected benefits for the U.S. red meat industry once improved access to Southeast Asia is fully realized. —U.S./South Korea trade deal faces delay ahead of Trump visitBessent says complex negotiations continue as Washington presses Seoul for major U.S. investment A long-anticipated trade deal between the United States and South Korea may not be ready in time for President Donald Trump’s visit later this week, according to officials involved in the talks. Treasury Secretary Scott Bessent said the potential agreement remains under negotiation and could take additional time to finalize. “Just a lot of details to work out,” he said. “Very complicated deal, and I think we’re very close.” One of the key sticking points has been Washington’s push for South Korea to commit $350 billion in U.S. investments — a move the administration views as central to its effort to strengthen American industries. U.S. Trade Representative Jamieson Greer said South Korea has “a great plan to invest in U.S. shipbuilding,” an industry President Trump has made a priority to expand. —Lula predicts swift breakthrough in U.S./Brazil disputesBrazil’s president says meeting with Trump was “surprisingly good,” expects resolution within days Brazilian President Luiz Inácio Lula da Silva said he had a “surprisingly good” meeting with President Donald Trump in Kuala Lumpur and forecast a “definitive solution” to ongoing disputes between the two nations within days. Speaking Monday on the sidelines of the ASEAN summit, Lula said the two sides had made progress toward lifting U.S. tariffs and sanctions imposed over allegations involving Brazilian judicial authorities, which he called “unacceptable” and based on “wrong information.” Lula told reporters that Trump appeared receptive during their talks and noted that the U.S. president was unaware of the broad impact of the sanctions, including restrictions that affected a Brazilian judge’s child. The leaders also discussed trade, critical minerals, and cooperation on counter-narcotics operations involving Venezuela. Lula said further negotiations would continue in Washington next week, expressing optimism that the two countries were “days away” from resolving their differences. Trump, speaking aboard Air Force One, described the exchange as “good” but stopped short of confirming a deal. Lula added that he invited Trump to attend next year’s COP30 climate summit in Brazil and signaled readiness to deepen collaboration on rare earth development and electric vehicle supply chains. —Takaichi makes diplomatic debut as Trump arrives in JapanJapan’s first female prime minister seeks to reinforce U.S. ties with defense pledges and major purchases including soybeans Takaichi Sanae, Japan’s first female prime minister, made her diplomatic debut at the ASEAN summit in Malaysia over the weekend — a prelude to an even bigger test at home. President Donald Trump arrived in Japan on Monday ahead of his trip to South Korea, where he will meet Chinese President Xi Jinping. Takaichi’s predecessor, Ishiba Shigeru, struck a deal with Trump that reduced tariffs on Japanese goods in exchange for a vague $550 billion investment pledge in the United States. Now, Takaichi — a national-security hawk and political heir to the late Abe Shinzo — aims to strengthen the alliance with Washington. In their first phone call on Saturday, she told Trump that deepening ties with America was her “top foreign-policy priority.” To demonstrate goodwill, Takaichi is boosting Japan’s defense spending and pledging to buy more American liquefied natural gas, soybeans, and pickup trucks. Trump, who plans to meet Abe’s widow during his stay, is expected to welcome the outreach as he continues to promote his “America First” trade agenda in Asia.  President Trump’s Asia tour got off to a strong start this weekend with the announcement of a string of framework trade deals. Haiyun Jiang/The New York Times—Canada’s Carney seeks to calm markets amid tariff tensionsCanadian prime minister signals trade diversification in Asia after Trump threatens new tariffs Canadian Prime Minister Mark Carney sought to reassure Canadians and global markets after President Donald Trump threatened to impose an additional 10% tariff on Canadian imports. Speaking from Malaysia, where he is attending the Association of Southeast Asian Nations (ASEAN) summit, Carney said he remains ready to resume trade negotiations despite Trump’s comments that it would be “a long time” before the two leaders meet again. “We are in the process of diversifying our trade relationships — the focus of our meetings here in Asia,” Carney said, emphasizing Canada’s commitment to expanding partnerships beyond the United States. The latest tensions arose after Ontario aired a 60-second anti-tariff advertisement during the first game of the World Series, prompting Trump’s threat. As the ASEAN summit continues through Oct. 28, Carney is pitching Canada as a stable and resource-rich trading partner, highlighting opportunities in liquefied natural gas and critical minerals as part of his broader effort to reduce reliance on what Canada sees as an increasingly protectionist Washington. —USDA to resume data flow after shutdown endsDelayed reports to be rescheduled, with some release timelines adjusted for months ahead Once the federal government reopens, USDA is expected to quickly outline a schedule to release the many reports delayed by the shutdown. The National Agricultural Statistics Service (NASS) will be central in setting new publication dates for major reports affected during the lapse in funding — a process that may alter release timelines for several months. Meanwhile, the Foreign Agricultural Service (FAS) plans to issue a cumulative export sales report covering activity during the shutdown, though that update likely won’t appear immediately after operations resume. |
| FINANCIAL MARKETS |
—Equities today: The trade policy progress lifted Asian and European to stocks to records, with the Nikkei 225 surpassing 50,000 points for the first time. The surge comes in response to the fiscally expansive new prime minister, Takaichi Sanae, taking the helm. Takaichi is due to meet President Trump on Tuesday. Meanwhile, German business confidence improved to its highest level since 2022, bolstering hopes that Europe’s largest economy is finally emerging from two years of contraction. U.S. indexes look like they will open higher at the start of a big week for central bank decisions and earnings. Bonds fell as demand for havens waned. The Fed will release its interest rate decision at 2 p.m. ET on Wednesday and follow that up with a press conference by Chair Jerome Powell. In Asia, Japan +2.5%. Hong Kong +1.1%. China +1.2%. India +0.7%. In Europe, at midday, London -0.1%. Paris +0.1%. Frankfurt +0.1%.
This week features earnings from five of the Magnificent Seven: Microsoft, Meta Platforms, and Google’s Alphabet report on Wednesday, and Apple and Amazon follow on Thursday, which together account for a quarter of the S&P 500.
—Global economy enters uncertain week as central banks tread carefully
Fed meeting, Eurozone data, and Asia-Pacific inflation reports highlight a cautious global outlook
The week ahead is shaping up to be a test of resilience for the global economy, as major regions release critical third-quarter data amid sluggish growth and policy uncertainty.
In Europe, GDP reports from Germany, France, Italy, and the Eurozone are expected to show flat to marginal expansion. Inflation remains steady around 2.2%, supporting expectations that the European Central Bank will keep its benchmark rate at 2.15%. Slight improvements in German business and consumer sentiment are expected, buoyed by stronger PMI readings, though trade and tariff headwinds continue to weigh on confidence.
In the United States, all eyes are on the Federal Reserve’s Oct. 28–29 meeting, where policymakers are widely expected to trim rates by 25 basis points. The ongoing government shutdown has limited key data availability, forcing the Fed to rely on anecdotal evidence and private-sector metrics. Despite third-quarter growth near 3% and persistent tariff-linked inflation, Fed Chair Jerome Powell is likely to strike a cautious balance between supporting employment and containing price pressures. Markets are pricing in another potential rate cut in December.
Across the Asia-Pacific, economic readings are mixed. Australia’s inflation data will help determine the Reserve Bank’s next policy move, while Japan and South Korea are set to release GDP, inflation, and industrial production figures showing modest expansion. China’s official PMI is expected to remain just below the 50 threshold, indicating slight contraction in manufacturing activity.
Taken together, the data paint a picture of a global economy still expanding but unevenly, as central banks navigate crosscurrents of high uncertainty, trade friction, and waning momentum heading into year’s end.
—Markets see smooth 2026 Fed cuts, but officials signal a bumpier road ahead
Investors expect a clean arc of rate reductions next year, but the Fed’s projections — and politics — point to a slower path
Financial markets have already written the script for 2026: The Federal Reserve will smoothly cut interest rates, easing pressure after years of aggressive tightening. Futures traders and options markets are pricing in a drop in the benchmark rate to between 2.75% and 3.0% by year-end — well below today’s 4–4.25% range, according to CME FedWatch data.
Yet, as Barron’s reports, the Fed doesn’t share that view. Officials’ September projections show rates still around 3.4% at the end of 2026 — barely lower than the 2025 median of 3.6%. While Wall Street expects three to five cuts from banks like Citigroup, Pantheon, and Morgan Stanley, policymakers foresee a slower trajectory punctuated by pauses and reassessments.
Core inflation, projected at 2.6% next year, remains above the Fed’s 2% goal, and unemployment around 4.4% gives little urgency for an aggressive pivot. A quarter-point cut this week appears likely after the delayed September CPI report showed inflation easing to 3%, slightly below forecasts.
The coming political reshuffle adds further uncertainty. Jerome Powell’s term as chair ends in May 2026, and President Donald Trump’s team is preparing to shape the central bank’s leadership. Stephen Miran, a Trump ally recently confirmed to the Fed Board, could soon be joined by a new chair aligned with Trump’s “personnel is policy” approach. Meanwhile, the pending Trump v. Cook Supreme Court case over Governor Lisa Cook’s status could shift the Fed’s voting balance.
Regional Fed presidents set to vote next year — Beth Hammack (Cleveland), Anna Paulson (Philadelphia), Lorie Logan (Dallas), and Neel Kashkari (Minneapolis) — include several inflation hawks. Hammack recently said, “Inflation has stayed above target for 4.5 years… We need to maintain a restrictive stance.” Kashkari warned that large cuts could “stoke inflation,” while Logan called for “carefully calibrating” any easing.
Tariffs and a cooling labor market further complicate the outlook. Joblessness has risen to 4.3%, layoffs are up 66% year over year, and consumer spending is slowing. Joyce Huang of American Century Investments predicts only one cut next year, arguing that early easing combined with Trump’s stimulus will be enough to satisfy both markets and the White House.
As Barron’s concludes, the gap between investors’ hopes and the Fed’s cautious playbook may define 2026. The central bank’s likely rhythm — cut, pause, reassess — could make for a more volatile year than markets are currently pricing in.
—Bessent names Fed Chair finalists as Trump eyes end-of-year pick
Treasury secretary says shortlist includes Waller, Warsh, Hassett, Bowman, and Rieder; Trump to decide before year’s end
Treasury Secretary Scott Bessent said the White House has narrowed its list of candidates for the next Federal Reserve chair to five finalists: Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, economist Kevin Hassett, Fed Governor Michelle Bowman, and BlackRock’s fixed-income chief Rick Rieder.
Speaking aboard Air Force One, Bessent said he plans to conduct a second round of interviews and hopes to present a “good slate” of candidates to President Donald Trump after the Thanksgiving holiday.
Trump told reporters he intends to make a final decision before year’s end on who will replace Jerome Powell, adding pointedly, “We have a person who is not at all smart right now.”
The president also reiterated that he doesn’t expect Bessent to leave Treasury to take the Fed chair role himself.
| AG MARKETS |
—China slows soybean purchases as Trump/Xi summit looms
Crushers face deepening losses; traders await clarity from potential U.S./China deal
Chinese soybean buyers are putting purchases on hold as they await the outcome of this week’s high-stakes meeting between President Donald Trump and President Xi Jinping — a summit that could reshape global trade flows for the oilseed, Bloomberg reports. According to traders cited by Bloomberg’s Hallie Gu, “purchases have stalled for near-term shipments due to rising costs and deepening losses at crushers.” The pause underscores market caution as any prospective trade deal could alter import dynamics and pricing across key producing nations.
At current prices, Chinese crushers are losing about 180 yuan ($25 per ton) for December deliveries, according to data from Mysteel. Margins for soybeans leaving Brazil between November and January are similarly poor, discouraging further deals. One trader told Bloomberg, “There’s no incentive to buy at these levels — everyone’s waiting to see what Trump and Xi agree on.”
Beijing has largely avoided U.S. soybeans this season as part of its strategy to gain leverage in ongoing trade negotiations, instead sourcing record volumes from South America. Brazilian soybean prices have surged 20% this year, buoyed by Chinese demand despite the off season. However, analysts warn that a U.S./China trade breakthrough could reverse those gains. “Any deal involving soybeans would drag down Brazilian prices and force crushers here to rethink their plans,” said one industry participant.
—Farm machinery market faces deep contraction as credit quality deteriorates
University of Illinois’ farmdoc daily warns of persistent downturn amid weak demand and rising delinquencies
The U.S. farm machinery and equipment market continues to struggle under the weight of waning demand, rising credit stress, and persistent cost pressures, according to a new farmdoc daily analysis from the University of Illinois’ Department of Agricultural and Consumer Economics (link). “The farm equipment sales index has remained below 50 for most of 2024 and throughout 2025,” the report said, citing Creighton University’s Rural Mainstreet Index. “October 2025 saw one of its lowest readings since 2020, indicating substantial contraction in equipment sales activity.”
Inventory and production cuts. U.S. Census Bureau data show farm machinery manufacturers’ inventories peaked at about $7.23 billion in October 2022, but have since declined to $5.65 billion by July 2025 — a 21.85% reduction. Major producers like John Deere and CNH Industrial have reduced production and announced layoffs, with CNH also planning to close its Burlington, Iowa, tractor plant by mid-2026.
Price pressures ease, but remain high. While machinery price growth has cooled since the sharp surges of 2021–22, prices remain far above pre-pandemic levels. The Producer Price Index for agricultural machinery rose just 1.34% year-over-year in August 2025, down from a peak increase of 19% in April 2022, as weaker farm incomes and higher borrowing costs dampened new purchases.
Credit indicators show growing strain. The Federal Reserve Bank of Kansas City reported farm machinery loan volumes falling to $2.61 billion in Q3 2025 — below recent years’ averages. Meanwhile, John Deere Capital’s allowance for credit losses rose to $247 million (0.46% of receivables), up from $220 million (0.39%) a year earlier, as non-performing receivables climbed to 1.21%. Write-offs for Deere’s agriculture and turf businesses have ballooned from $4.8 million in 2021 to $23.5 million in 2024. CNH Industrial Capital also saw write-offs rise to $27.7 million in the first half of 2025, from $10.7 million a year prior.
“Loan performance data show headwinds as credit quality deteriorated,” author Gerald Mashange wrote, adding that “lenders face increasing pressure from deteriorating loan performance in their agricultural machinery and equipment portfolios.”
Outlook: Prolonged weakness ahead. The report concludes that the sector’s downturn “may persist as farmers navigate political uncertainty, weak commodity prices, elevated input costs, and tight credit conditions.” Manufacturers are expected to continue adjusting production and inventories in response to subdued demand and credit risk.
| RULES AND REGULATIONS |
—USDA advances two key rules to OMB despite shutdown
Disaster aid and SNAP eligibility reforms move forward amid halted government operations
Despite the ongoing government shutdown, USDA has sent two major regulatory actions to the Office of Management and Budget (OMB) for review — signaling that some agency work continues even as most operations remain frozen.
The first is a final rule for the Supplemental Disaster Relief Program (SDRP), which sets guidelines for Stage 2 payments covering uninsured or uncovered crop losses, including quality losses and the destruction of trees, bushes, and vines caused by adverse weather events in 2023 or 2024.
The second is a proposed rule revising Supplemental Nutrition Assistance Program (SNAP) eligibility. The change would restrict “categorical eligibility” under the Temporary Assistance for Needy Families (TANF) program to households receiving ongoing and substantial cash or similar aid — tightening a provision that had allowed broader participation. According to the Trump administration’s regulatory agenda, the goal is to “create a clearer and more consistent nationwide policy” ensuring that categorical eligibility is reserved for households demonstrably meeting TANF assistance thresholds.
While some regulations continue to progress, others remain stuck at OMB — including a pending Environmental Protection Agency (EPA) rule to finalize the clarifying definition of “Waters of the United States.”
| ENERGY MARKETS & POLICY |
—Oil prices dip as U.S./China trade framework eases market anxiety
Crude benchmarks retreat after last week’s surge on Russia sanctions
Oil prices edged lower Monday after U.S. and Chinese economic officials outlined a new trade-deal framework, easing investor fears that tariff escalation or export curbs between the world’s two largest energy consumers could slow global growth.
Brent crude futures slipped 1.1% to $65.19 a barrel, while West Texas Intermediate (WTI) declined 1.2% to $60.79 — a pullback following last week’s sharp gains of 8.9% and 7.7%, respectively, driven by U.S. and EU sanctions targeting Russia.
The U.S./China framework helps calm concerns that Moscow could undermine sanctions by offering steeper discounts or deploying shadow fleets to attract buyers. But if sanctions on Russian energy are less effective than expected, oversupply pressures could return to the market, analysts note.
—Perspective: API pulls back support for year-round E15 sales, citing regulatory and market concerns
Oil industry group reverses position, saying ethanol expansion must be paired with broader fuel-policy fixes
The American Petroleum Institute (API) recently withdrew its support for year-round sales of E15 gasoline — a blend containing 15 percent ethanol — just months after backing bipartisan legislation aimed at expanding nationwide availability.
In an October statement (link), API President Mike Sommers said the group would no longer endorse an E15-only measure unless Congress also addresses broader “regulatory and market distortions” tied to the Renewable Fuel Standard (RFS) and state-by-state fuel mandates. “Refiners are operating in an increasingly complex system marked by shifting federal compliance structures and a patchwork of state requirements,” Sommers wrote, urging lawmakers to craft a national solution instead of piecemeal state approvals.
The reversal marks a setback for farm-state lawmakers and ethanol producers who viewed API’s earlier support as a breakthrough in the long-running standoff between the oil and biofuel sectors. Industry groups such as Growth Energy and the Renewable Fuels Association had hoped that a united front would clear the way for permanent year-round E15 sales — replacing the seasonal waivers that the Environmental Protection Agency (EPA) currently issues under emergency authority.
API’s retreat stems in part from concerns about small refinery exemptions (SREs) under the RFS, which the group argues create uneven cost burdens among refiners. API has also warned that expanding E15 without infrastructure upgrades could disrupt fuel supply chains and raise costs in regions not equipped to handle higher-ethanol blends.
E15 faces restrictions during the summer ozone season due to gasoline volatility limits, and the EPA’s emergency waivers allowing nationwide E15 sales have repeatedly drawn legal challenges. While the Biden-era EPA approved permanent E15 use in several Midwestern states, the Trump administration and Congress have so far held off on implementing a national policy.
Of note: In the publicly released letter, API did not explicitly mention the cost of RINs (Renewable Identification Numbers) as a reason for withdrawing support for year-round E15 sales. Rather than citing RIN costs, the API’s letter focused on:
• Disruptions caused by the small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS): “the waivers disrupt the market and penalize refiners who have already invested in biofuels compliance.”
• The “patchwork of state mandates” and shifting “federal compliance structures” affecting refiners.
• Increased costs to refiners from “changes to federal tax rules, EPA decisions, and state-level policy reversals” affecting the fuels marketplace.
The omission of explicit reference to RIN costs suggests that API is framing the issue more broadly around systemic changes and distribution of compliance burdens, rather than a standalone critique of RIN price levels. That said, shifts in RIN markets (and associated compliance cost burdens) are typically embedded in the “compliance structures” and “new costs” language, so while not cited by name, they may still be implicitly a concern.
API’s reversal may delay congressional efforts to codify year-round E15 sales and adds new uncertainty for corn and ethanol markets. Analysts say the move underscores the fragile alliance between oil refiners and farm-state interests — and signals that any lasting reform of U.S. biofuel policy will likely require a broader legislative package addressing both refinery compliance costs and renewable fuel blending mandates.
| TRADE POLICY |
—Senate Democrats again move to cancel Trump’s emergency tariff declarations
Push to end presidential emergencies underpinning global and country-specific duties faces big hurdles
Senate Democrats, joined by a handful of Republicans, have revived efforts to terminate President Donald Trump’s use of national emergency powers to justify broad tariff actions against trading partners including Canada, Brazil, and more than 180 countries worldwide. The three resolutions — SJRes. 77, 81, and 88 — target separate emergency declarations that underpin Trump’s escalating trade measures.
Canada and Brazil targets. SJRes. 77, sponsored by Sen. Tim Kaine (D-Va.), seeks to end Trump’s February order imposing a 25% tariff on Canadian products, later raised to 35% in August. The order cited Canada’s alleged failure to curb illegal drug flows across the northern border. Trump recently added another 10% tariff following an anti-tariff TV campaign by Ontario’s government. Energy products and potash remain capped at 10%.
A separate measure, SJRes. 81, addresses Trump’s July tariffs on Brazil — some as high as 40%, among the steepest globally. The administration justified the move by accusing Brazil’s government of curbing free speech and persecuting former President Jair Bolsonaro, who was convicted of election-related crimes. Despite the penalties, imports such as aircraft and fruit juice were exempted.
Global tariffs and constitutional fight. Senate Finance Committee ranking member Ron Wyden (D-Ore.) introduced SJRes. 88 to block Trump’s April executive order imposing a 10% “reciprocal tariff” on imports from over 180 countries. The administration claimed chronic trade deficits represented a national security threat. Though several partners, including the EU, Japan, and China, negotiated partial relief, Wyden called the global tariffs “reckless,” warning they were “driving our economy into recession and bankrupting small businesses.”
Sen. Rand Paul (R-Ky.), the only Republican cosponsoring all three resolutions, argued the tariffs “fail on economics and on the Constitution.” The constitutional issue is now before the Supreme Court, which will hear arguments in early November on whether Trump can invoke the 1977 International Emergency Economic Powers Act (IEEPA) to levy tariffs.
Outlook: Under the 1976 National Emergencies Act, Congress can terminate presidential emergencies via joint resolutions. Committees must act within 15 days, and the full Senate must vote within three days of a committee report. Though the Senate has agreed to debate all three measures by Oct. 31, the House has suspended fast-track procedures until Jan. 31, and Trump is expected to veto any passed resolutions. Past efforts to curb Trump’s emergency-based tariffs have narrowly failed — a Wyden measure was rejected 49–49 in April, while a Kaine-led Canada resolution passed 51–48 but stalled in the House. To override a likely veto, two-thirds of both chambers would need to vote in favor — a steep climb amid divided politics.
| CHINA |
—China industrial profits keep up strong growth
Low base and capacity cuts boost September gains as 73% of firms report higher profits
China’s industrial profits surged 21.6% in September, extending the rebound seen in August when earnings climbed 20.4%, according to data from the National Bureau of Statistics. The gains mark a continuation of the recovery after three consecutive months of declines earlier this year.
Officials attributed the robust increase to a low base effect from last year and government-led efforts to reduce excess capacity. In the first nine months of 2025, profits rose 3.2% year-on-year, accelerating from the 0.9% growth recorded over January–August.
Beijing’s campaign to curb price wars in industrial sectors and promote technological innovation has helped stabilize margins despite ongoing factory-gate deflation. The bureau reported that 73.2% of surveyed industrial firms saw profit growth in September, underscoring broad-based improvement across manufacturing categories.
| POLITICS & ELECTIONS |
—Milei’s party scores major comeback in Argentina’s midterm elections
Libertarian president secures congressional foothold with 41% of the vote, bolstered by U.S. support and Trump praise
President Javier Milei’s La Libertad Avanza party won Argentina’s midterm elections with 41% of the national vote, granting the libertarian leader a decisive mandate to advance his free-market reform agenda. With 101 lawmakers in the lower house and 20 senators, Milei now exceeds the one-third threshold needed to safeguard his veto power and drive forward tax, labor, and pension overhauls aimed at reviving the struggling economy.
The victory marks a sharp rebound from Milei’s local defeat last month in Buenos Aires province — long a Peronist stronghold — and follows renewed U.S. financial backing. The Trump administration’s $20 billion swap-line agreement and direct peso purchases helped stabilize markets and underscore Washington’s faith in Milei’s program. President Donald Trump hailed the results as a “landslide victory,” calling Milei “a wonderful leader doing a great job.”
As the results rolled in Sunday, billionaire investor Bill Ackman painted it as a triumph for Trump, Milei and Bessent, and “an important win for democracy, capitalism, and sanity, and a defeat for socialism.”
Markets are expected to rally, with early trading suggesting a 4.8%-peso gain in crypto markets. Analysts at Goldman Sachs said the result gives Milei “a fresh endowment of legitimacy and political capital,” while investors see it as a validation of Argentina’s IMF-supported reform trajectory.
Upshot: Even amid corruption probes and economic strains, Milei’s comeback consolidates his position as Latin America’s most outspoken advocate of libertarian economics — and as one of Washington’s closest ideological allies.
| RURAL HEALTH CARE |
— Why many farmers rely on ObamaCare/Affordable Care Act coverage
Self-employed farm families turn to Affordable Care Act coverage for stability, subsidies, and guaranteed access in rural health markets
Many farmers rely on Affordable Care Act (ACA, or “ObamaCare”) marketplace policies because farmers are disproportionately self-employed and lack access to employer-sponsored health insurance.
1. Self-employment and seasonal income. Most farm families operate as small businesses — sole proprietorships, partnerships, or family corporations.
• They don’t have access to group health plans the way wage employees do (unless their spouses work off farm and have family plan health care policies).
• The ACA created individual market plans with guaranteed coverage, meaning insurers can’t deny them for pre-existing conditions or charge unaffordable premiums due to age or health status.
• The seasonal nature of farm income also fits well with ACA subsidies, since annual income (after expenses and depreciation) can fluctuate sharply, making them eligible for premium tax credits in leaner years.
2. Premium tax credits and income averaging. Under the ACA, households earning up to 400% of the federal poverty level (FPL) — and in some years, temporarily above that — qualify for sliding-scale subsidies.
• Many farm families report modest taxable income due to deductions for machinery, feed, and depreciation, even though their gross sales may be large.
• As a result, they often fall within the income ranges eligible for subsidies.
• The tax credits can make ACA policies significantly cheaper than private, unsubsidized coverage.
3. Limited rural health options. In rural areas, ACA marketplaces are often the only viable option for comprehensive coverage:
• Employer plans are scarce, and private off-exchange plans are limited.
• Farm Bureau or cooperative health plans exist in some states, but not all — and they sometimes lack full protections (for example, coverage for pre-existing conditions).
• ACA plans guarantee coverage across states and for all essential services, including maternity, prescriptions, and preventive care.
4. Age and risk pool factors. The average U.S. farmer is now over 57 years old.
• Older individuals face much higher private-market premiums without the ACA’s 3-to-1 age-rating cap.
• The ACA effectively reduces age-based premium spikes, making it more affordable for midlife and older farmers who are too young for Medicare.
5. Policy context: Farm organizations and ACA use. Even though many farm organizations (like Farm Bureau) opposed ACA mandates early on, surveys from USDA’s Economic Research Service and groups such as the National Farmers Union show that:
• Between 40% and 60% of farm households have obtained coverage through ACA marketplaces at some point.
• Many cite stability and access to catastrophic coverage as the key benefits.
| NEW WORLD SCREWWORM |
—FDA grants emergency use for Elanco’s flea and tick drug to treat New World Screwworm in dogs
First-ever authorization for NWS treatment highlights FDA’s proactive stance on emerging animal health threats
The U.S. Food and Drug Administration (FDA) has granted an emergency use authorization to Elanco Animal Health for its Credelio (lotilaner) chewable tablets to treat dogs infected with New World Screwworm (NWS) — marking the first time the agency has approved a treatment for NWS under emergency use provisions. FDA Commissioner Marty Makary said the decision underscores the agency’s commitment to act quickly against emerging threats: “When it comes to emerging animal health threats, we need to be proactive, not reactive.”
The FDA determined that Credelio “could be effective in treating NWS in dogs and puppies, and the known and potential benefits of the product outweigh its known and potential risks.” Originally approved in 2018 for flea and tick control, the drug’s emergency authorization allows veterinarians to use it against NWS — a dangerous parasitic infestation that can cause severe wounds or death if untreated.
| WEATHER |
— NWS outlook: Unsettled weather and cool temperatures will continue to spread through the Southeast and southern Appalachians Monday with some isolated flash
flooding possible… …A new storm system will organize across the Middle and Lower
Mississippi Valley by midweek with widespread showers and thunderstorms
expected… …Another Pacific system will bring some lower elevation/coastal rain and
higher elevation snow to the Pacific Northwest Tuesday… …Well above average, hot temperatures in the 90s continue for south Texas; a warm up into the 80s and 90s has prompted Heat Advisories for southern California Tuesday.
