Rollins Holds Firm on Cattle Border Closure Amid Screwworm Threat

Updates on U.S./China ag agreement | StoneX crop forecasts surprise the bulls | Thune eyes early January as new funding target in shutdown talks

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Link: What It Means: China Suspends Soybean Tariffs Under Trump/Xi Agreement
Link: Video: Wiesemeyer’s Perspectives, Oct. 31
Link: Audio: Wiesemeyer’s Perspectives, Oct. 31

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Today’s Updates:
 

ROLLINS / MEXICO CATTLE BORDER
— Rollins holds firm on cattle border closure amid screwworm threat
 

GRAINS & TRADE WITH CHINA
— China’s reopening to U.S. sorghum exports
— Some in U.S. ag sector haven’t read White House Fact Sheet on U.S./China
     agreement, don’t trust it, or are waiting on China to sign/enforce
 

GOVERNMENT SHUTDOWN
— Thune eyes early January as new funding target in shutdown talks
— Partial SNAP payments to proceed amid shutdown, court orders USDA to act
 

TARIFFS & COURTS
— Record tariff haul lifts U.S. treasury receipts in October
— Supreme Court to test boundaries of presidential tariff power
 

FINANCIAL MARKETS
— Equities today: Lower U.S. equities open significantly lower
— Equities yesterday
— Quote of note (David Solomon/Jay Powell context)
— ADM cuts 2025 earnings outlook on weaker crush margins, biofuel policy delays
— Starbucks hands over majority control of China operations to Boyu Capital
— BNSF sees strong Q3 on higher intermodal and ag shipments
— Cook says December Fed meeting ‘live,’ reflects on legal battle and labor risks
— China’s “strong yuan” strategy signals new phase in currency policy
 

AG MARKETS
— StoneX estimates: U.S. corn 186.0 BPA; soybeans 53.6 BPA
— China export controls emerge as factor in rising fertilizer prices
— Australia’s first canola cargo to China in five years nears departure
— Agriculture markets yesterday
 

FARM POLICY
— Update on FSA’s partial reopening and farm program payments
 

ENERGY MARKETS & POLICY
— Oil prices today decline over 1% on demand worries, strong dollar
— Oil prices steady Monday as OPEC+ signals restraint for early 2026
 

TRADE POLICY
— House Democrats urge Trump to reopen and toughen USMCA deal
— Corn growers press White House to back full USMCA renewal
 

CONGRESS
— Senate Ag narrowly advances Trump USDA nominees; clears Grain Standards Act
 

POLITICS & ELECTIONS
— Former Vice President Dick Cheney dies at 84
— Voters head to the polls in California; NJ & VA governor races
— Charlie Cook’s “Beaufort Scale” for U.S. politics: Ten questions
 

CHINA
— China warns U.S. to respect ‘four red lines’ as trade truce takes hold
 

WEATHER
— NWS outlook: heavy rain threat for Northwest & Northern Calif.; strong coastal winds

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Updates: Policy/News/Markets, Nov. 4, 2025

Up Front— Rollins holds firm on cattle border closure: USDA’s Brooke Rollins tells Reuters (exclusive) she’s not yet ready to reopen ports amid the screwworm threat, though she praises Mexico’s containment work and says talks continue.— China reopens to U.S. sorghum: NSP hails the move but urges binding commitments of ~5 MMT/yr to secure stable, long-term demand.— Skeptics on Trump/Xi ag deal: White House Fact Sheet indicates China’s 12 MMT soybean buy is additional in Nov–Dec 2025; questions persist on China’s public confirmation and enforcement details.— Shutdown talks: Sen. John Thune signals momentum for a bipartisan CR pushing funding into early January 2026.— Record tariff haul: Treasury’s October “Customs & Certain Excise Taxes” hit ~$34B, underscoring tariffs’ rising role in federal receipts—and potential inflation pass-through.— SCOTUS to weigh tariff powers: Justices will test whether using IEEPA for broad tariffs usurps Congress’s authority over taxes and trade.— SNAP during shutdown: Courts prod USDA to tap contingency funds; about half of November benefits to go out while full funding needs new appropriations.— Markets: Risk-off tone; Asia/Europe lower and U.S. equities open significantly lower after cautious Fed remarks and weak earnings.— ADM trims outlook: 2025 EPS cut to $3.25–$3.50 on weaker crush margins and biofuel policy delays; sees 2026 rebound.— Starbucks/Boyu JV: $4B deal hands Boyu up to 60% of China ops as Starbucks seeks a turnaround in a hyper-competitive market.— BNSF firmer Q3: Revenue and profit edge higher on intermodal and ag shipments; operating ratio improves to 64.1%.— Fed’s Lisa Cook: December is “live”; watching rising job risks, tariff-driven inflation, and data gaps from the shutdown.— China’s ‘strong yuan’ phase: Beijing aims for a more internationally trusted RMB — stability and wider use over outright appreciation.— StoneX yields: Corn 186.0 bpa and soybeans 53.6 bpa; trade eyes USDA Nov. 14.— Fertilizer prices: China export curbs and Russia/Belarus constraints lift DAP and stoke food-inflation risks.— Australia→China canola: First trial cargo in five years set to sail, hinting at a gradual reopening of the lane.— FSA ops ramping back: MAL systems live; loans and program payments moving as offices staff up post-shutdown start.— Oil: Prices slipped >1% on weak PMIs, strong dollar, and OPEC+ Q1 pause; Monday settled flat as the group signaled restraint.— USMCA review split: 100+ House Democrats seek a tougher, reworked pact; corn growers push for a clean 16-year renewal.— USDA nominations: Senate Ag advances three Trump picks; Grain Standards Act reauthorization clears panel.— Dick Cheney dies at 84: Tributes highlight his influence on national security and GOP politics.— Election day tells: Off-year races in CA/NJ/VA framed as an early read on 2026; see Charlie Cook’s 10-question “Beaufort Scale.”— China’s ‘four red lines’: Ambassador Xie warns U.S. to avoid Taiwan, democracy/human-rights, system critiques, and development-rights clashes to keep the trade truce on track.— Weather: Heavy rain threat for the Northwest/N. California; strong coastal winds late Tue–Wed. —Rollins holds firm on cattle border closure amid screwworm threatRollins tells Reuters she’s “not yet comfortable” reopening ports, praises Mexico’s containment progressThe U.S. is not yet ready to reopen its border to Mexican cattle amid an outbreak of the flesh-eating New World screwworm parasite, Agriculture Secretary Brooke Rollins told Reuters in an exclusive interview Monday, even as she praised Mexico’s stepped-up containment efforts.Speaking in Mexico City following meetings with President Claudia Sheinbaum and other officials, Rollins said President Donald Trump was “very focused” on reopening the border, which has been largely closed to Mexican livestock since May.“We’re still not at the point where I am comfortable opening the ports, but I think every day that goes by we get a little bit closer,” Rollins said. “I want to have every confidence that we have overturned every stone, that we understand everynuance, that we are deploying every tool in the toolkit.”Rollins declined to offer a timeline for reopening but said she would brief senior U.S. officials Wednesday and continue discussions with Trump about the screwworm situation.The outbreak, which originated in Central America, has spread northward into Mexico, threatening severe losses to the livestock industries on both sides of the border. USDA estimates the pest could cause $1.8 billion in economic damage to Texas alone if it crosses into the United States.Rollins met Monday (Nov. 3) in Mexico City with Mexican President Claudia Sheinbaum, joined by Agriculture Minister Julio Berdegué, Energy Minister Luz Elena González Escobar, and U.S. Ambassador Ronald Johnson, according to Mexico’s Milenio. The meeting lasted around 40 minutes. Berdegué described the discussions, which took place at the National Palace, as “extremely positive and constructive,” noting that “all the topics on the bilateral agenda were reviewed.” Mexico’s Foreign Ministry said Rollins had requested the session, and that Sheinbaum emphasized reopening the U.S. border to livestock exports as a “priority for the Mexican government.” Both sides reaffirmed the importance of maintaining “permanent communication channels at the highest level” between relevant authorities. However, there has been no indication of any change in the ongoing closure of the U.S. border to cattle imports from Mexico, which remains under review. Officials say they have settled on short-term priorities and action items that could underpin decisions on resuming cattle exports — without assigning any dates or concrete next steps.  Relationships between Trump administration officials and their Mexican counterparts have improved in recent months, Rollins said in a recent interview with the Grain Markets and Other Stuff podcast. Quote of note: “It was a little tenuous back when I started earlier this year,” Rollins said. “We weren’t getting our planes landed with all of our sterile flies where they needed to be. We weren’t getting a lot of good information. That has all changed. Now, Mexico has become a good partner in this, and they’re trying really, really hard to push it, contain it back and get the ports open.”  The outbreak of the screwworm has forced a halt on live cattle imports from Mexico into the U.S., as the pest has advanced northward and shown recent detections close to the border. Industry watchers warn that the unresolved status is feeding volatility in cattle markets, given the backlog of Mexican feeder cattle and tight U.S. domestic supply. Without a clear reopening schedule, Mexican ranchers face prolonged export uncertainty, pushing supply shifts and potentially raising costs for U.S. processors relying on Mexican feeder cattle. For U.S. policymakers, the dual challenge remains: safeguarding livestock and border health from pest risks, while alleviating supply constraints in the beef market. Given the high stakes — both biosecurity and trade flows — any future reopening is likely to be conditional and incremental, rather than a full-open door at once.—China’s reopening to U.S. sorghum exportsProducers praise the breakthrough while urging formal purchase commitments to lock in long-term demand The National Sorghum Producers (NSP) commended President Donald Trump and his administration — along with USTR, USDA, the Commerce and Treasury Departments, and congressional leaders — after China authorized the resumption of U.S. sorghum imports. “The President’s meeting with President Xi, and sorghum being named, reflects sorghum’s importance to trade with China,” said NSP CEO Tim Lust, adding that exports are “vital to our industry.” Lust urged the administration to secure minimum purchase agreements of at least 5 million metric tons per year, consistent with the historical average of U.S. sorghum exports to China. Such commitments, he said, would provide “consistent, reliable demand” and “long-term certainty for American sorghum growers.” NSP Chair Amy France, a farmer from Scott City, Kansas, called the announcement “encouraging progress” but emphasized that “true success will come when we see shipments moving and grain flowing again from U.S. farms to our customers in China.” The decision marks a key milestone in restoring trade flows and expanding global demand for U.S. sorghum. NSP urged the administration to pursue enforceable trade commitments that ensure lasting market access and stability for American producers.—Some in U.S. ag sector haven’t read the White House Fact Sheet on U.S./China agreement, don’t trust it, or waiting on China to sign a document or want details on enforcement That about sums up the questions being raised by some naysayers about the ag portion of the Trump/Xi agreement. One remark from an analyst to Brownfield Agriculture: “One big question about the soybean sales remains: China did buy 5.9 million metric tons in the first half of 2025 with early purchases in the January window last winter. Do they count towards the twelve, or are we getting twelve million additional above that?” Response: Based on the White House Fact Sheet (link), the 12 million metric tons (MMT) figure clearly refers to new, additional purchases of U.S. soybeans during the last two months of 2025, not sales already made earlier in the year. Here’s the relevant language from the document: “China will purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025 and also purchase at least 25 MMT of U.S. soybeans in each of 2026, 2027, and 2028.” China’s Commerce Ministry said both sides had reached a consensus on agricultural purchases, but gave no details. That phrasing — “during the last two months of 2025” — means these are new commitments beginning in November and December 2025, separate from the 5.9 MMT China reportedly bought earlier in the year (January window). In short: The White House fact sheet does not include the early-2025 purchases in the 12 MMT commitment. The 12 MMT represents additional soybean imports (purchases) that China pledged under the new agreement, beyond prior commercial purchases. The official U.S. language makes clear the 12 MMT are new, incremental volumes tied to the November–December period under the deal. Other naysayer points deal with the apparent need to see a signed document by China, or at least more public details from China. Others want to know more about how the details will be enforced.  Response: Here is a link to how China’s Ministry of Commerce responded to reporters’ questions regarding the joint arrangements. The lack of details likely has more to do with the way the two countries provide information. As for enforcement, senior officials (Trump, USTR/USDA) have said that China must live up to its commitments on agricultural purchases, and that failure to do so could trigger additional tariffs or investigations. There are mechanisms such as bilateral dialogue, agriculture‐policy working groups, etc., who will monitor China’s compliance or lack of it. Naysayers frequently note that China did not live up to its commitments (signed) during the Phase One agreement. The Phase Two agreement commitment architecture is weak in terms of commodity-specific enforcement, clear penalty triggers, or transparent public verification of China’s follow-through. (See the China section for more on key Chinese issues.) Meanwhile, China remains a price/market buyer, so in practice U.S. exporters face headwinds even under the “commitment” frame. Publicly transparent data on China-specific advance bookings (no daily USDA sales announcements with the gov’t shut down), delivery schedules by U.S. exporters, and penalties for non-fulfilment are limited. Note the competitive context: even as commitments are made, market factors (Brazil’s cost, protein content, freight, Chinese sourcing strategy) will influence actual purchases. Reuters reported Monday: “Chinese soybean importers have stepped up purchases of Brazilian cargoes in recent days as South American prices eased on expectations a U.S./China trade deal will lead to a resumption of U.S. sales to the world’s largest soybean importer. Buyers have booked 10 cargoes of Brazilian soybeans for December shipment and 10 for March-July with South American prices now quoted below offers being made for U.S. cargoes, three traders said on Monday. Brazilian soybeans had traded at higher prices than U.S. supplies in recent weeks as steep Chinese tariffs curbed demand for U.S. beans. ‘Brazil is now cheaper than U.S. Gulf, and buyers are taking this opportunity to book cargoes,’ said a trader at an international company that runs oilseed processing plants in China. “We are seeing increased demand for Brazilian beans since last week.” Of note: Brazilian soybean cargoes landed in China are reportedly around 50 cents per bu. cheaper for Dec.-Jan. shipment. February shipment spread is over $1 cheaper than U.S. soybeans. Some reports note that the enticing Brazil soybean price has moved some prior non-Chinese purchasers of U.S. soybeans to switch to Brazil. One U.S. soybean industry contact emailed: “Just can’t believe we are uncompetitive already even before Brazil’s new crop harvest.  It has been nice to see the price increase, but still have a ways to go to get back to break even. There is no guarantee that will happen of course but hopefully, prices keep getting better and we can see a $12 in front of the cash price before long. I think this price rise kind of proves that if the Chinese had been in the market all year and if we would have had biofuel policy certainty, we could have had much better old crop prices this past year across the board. But that ship sailed, and farmers can’t get the old crop back.” The contact continued: “Yes, there are a lot of traders and analysts that really don’t know as much as they think. Being skeptical is probably warranted though, because it doesn’t take much to go backwards and call the deal off. The next level of skepticism will come with what happens after the 3-year deal ends. We are building new markets and trying to diversify, but from a realistic perspective only so much can be done in that amount of time. I think it is more of a decade long process or more to be able to diversify away from China and we probably always will need some portion of that market or that means big increases to domestic use and then exports of meal. Or the alternative is our row crop acres will need to contract in the U.S.”  —Thune eyes early January as new funding target in shutdown talksSenate leader says bipartisan discussions are “getting close to an off-ramp” as pressure mounts for a deal this week Today the funding lapse will tie for the longest shutdown in history (35 days), which took place between 2018 and 2019.Senate Majority Leader John Thune (R-S.D.) said Monday he is “optimistic” that Congress could reach an agreement to reopen the government by week’s end, signaling growing momentum toward a bipartisan stopgap measure that would fund the government into early January 2026 to finish the full-year appropriations process. Thune told reporters that while he isn’t “confident,” his “gut” suggests a deal is nearing after a weekend of active bipartisan negotiations. “The objective here is to try and get something that we could send back to the House that would open up the government,” he said. Lawmakers are reportedly discussing a continuing resolution (CR) that would extend funding beyond the now-impractical Nov. 21 deadline included in the House-passed bill. “The date’s going to have to change. …That date’s lost,” Thune said, adding that a “longer runway” into January makes more sense given the limited time to finalize full-year appropriations. Negotiators are also weighing whether to include a commitment to resume the regular appropriations process and a potential vote on extending Affordable Care Act/ObamaCare subsidies, a central Democratic demand. Thune cautioned that political distractions could still delay progress, noting that Tuesday’s elections in Virginia, New Jersey, and New York City have drawn members’ focus. Still, he indicated that Senate leaders are prepared to cancel next week’s recess if talks stall. “I think we have to leave all options on the table,” Thune said. “If we don’t start seeing some progress or some evidence of that by at least the middle of this week, it’s hard to see how we would finish anything by the end of the week.” —Record tariff haul lifts U.S. treasury receipts in October“Customs and Certain Excise Taxes” reach $34 billion amid ongoing trade actions and elevated import duties The U.S. Treasury’s Daily Treasury Statement for October shows that collections under the line item “Customs and Certain Excise Taxes” surged to about $34 billion, marking the highest monthly total on record and underscoring the growing fiscal weight of tariffs in federal revenues. According to Treasury data, the sharp increase reflects continued tariff enforcement across a wide range of imported goods — from Chinese electronics and rare-earth materials to European steel, Canadian aluminum, and various agricultural products. The $34 billion figure far surpasses the previous monthly highs seen during earlier tariff rounds in 2018-2019 and again in 2024, when duties on imported industrial and consumer goods were expanded under President Trump’s trade program. The October surge highlights how tariffs have become an increasingly important, if volatile, source of federal revenue. While traditional income and payroll taxes dominate Treasury inflows, the customs and excise category — historically a minor contributor — has risen sharply in recent months as imports subject to elevated duties continued to enter the United States ahead of year-end policy changes. The Daily Treasury Statement, which tracks cash receipts and outlays on a near-real-time basis, reflects these inflows directly from U.S. Customs and Border Protection. Analysts say the latest total aligns with expectations of strong port activity through September and early October, particularly on consumer goods, machinery, and auto parts shipments. Economists note that while the record inflow bolsters Treasury cash balances amid the ongoing government shutdown and budget impasse, it may also signal rising import costs and inflationary pressures. “Tariff receipts can look like a fiscal win,” one market analyst said, “but they ultimately represent higher costs for U.S. importers and consumers.” Higher duties can temporarily inflate nominal revenues even as they dampen trade volumes. Whether October’s record figure proves sustainable will depend on import trends, supply-chain rerouting, and the durability of the current tariff framework. The increase comes as the administration continues to expand its tariff-based strategy, using trade leverage to secure bilateral agreements with China, Mexico, and key Asia-Pacific partners. The latest “Phase Two” accord with Beijing, announced last week, includes partial tariff rollbacks on U.S. agricultural exports but keeps broad industrial levies in place. The record collections underscore the paradox of current U.S. trade policy: tariffs remain both a negotiating tool and a significant source of federal income. Yet some observers note the same measures feeding record receipts can also stoke inflation and weigh on consumer spending. Looking ahead: Economists will watch whether the elevated October total persists in November and December. If customs revenues stay near the $30 billion-plus range, they could add a modest but meaningful buffer to federal receipts heading into 2026 — though analysts caution that the fiscal boost may come at a cost to trade volumes and domestic price stability. Bottom Line: October’s $34 billion milestone captures the fiscal flip side of the tariff era: a cash windfall built atop the most expansive U.S. trade restrictions in decades.  —Supreme Court to test boundaries of presidential tariff powerJustices to decide whether Trump’s use of emergency powers on trade usurps Congress’s constitutional authority The Wall Street Journal editorial board warns that the Supreme Court’s upcoming review of two major cases — Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections — could redefine the limits of presidential power over U.S. trade and taxation. The cases will determine whether President Donald Trump’s sweeping tariffs under the 1977 International Emergency Economic Powers Act (IEEPA) violate Congress’s constitutional prerogative to regulate commerce and levy taxes. The editorial argues that Trump’s invocation of IEEPA to impose global tariffs — justified by “national emergencies” like the trade deficit and fentanyl trafficking — stretches the law far beyond its historical and legal boundaries. “Such arbitrary taxation without representation,” the board writes, “is precisely what the Framers sought to prevent.” For decades, Congress has delegated narrow trade authorities to presidents, such as Section 232 (national security), Section 122 (balance of payments), and Section 301 (discriminatory practices). But IEEPA was designed for asset freezes and sanctions against hostile actors, not as a blank check for tariff policy. The Journal notes that “no President before Mr. Trump used the law for tariffs,” and under the Supreme Court’s major questions doctrine, such a significant economic action would require explicit congressional approval. The editorial also rebuts the Trump team’s reliance on historical precedent from Richard Nixon’s 1971 tariffs under the Trading with the Enemy Act, noting that Congress subsequently curbed presidential latitude by enacting IEEPA precisely to prevent such overreach. If the Court endorses Trump’s interpretation, the Journal warns, future presidents could just as easily impose “climate emergency” tariffs or other import taxes under the same rationale.  Three sets of tariffs are in play, which make up the overwhelming majority of U.S. tariff revenue: Baseline tariffs of 10% on virtually all countries, steeper tariffs on countries the administration considers bad actors on trade, and an additional set on Canada, China and Mexico, which the administration says are punishment for those countries not doing enough to prevent the flow of fentanyl into the U.S.   The piece concludes that tariffs are taxes on Americans, not foreign governments, and that allowing the executive to impose them unilaterally would erode the Constitution’s separation of powers: “The power of the purse still belongs to Congress and can’t simply be wished away with the words ‘foreign policy.’” The outcome, the editorial says, will determine whether the Supreme Court reins in an era of tariff policymaking by executive fiat — or cements it as the new normal.Meanwhile, Treasury Secretary Scott Bessent said he would attend Wednesday’s SCOTUS hearing on the topic. —Partial SNAP payments to proceed amid shutdown, court orders USDA to actAdministration taps contingency reserves to cover half of November benefits; judges rebuke agency for delay The Trump administration told a federal judge it will draw on USDA’s $4.65 billion in contingency funds to cover roughly half of November’s Supplemental Nutrition Assistance Program (SNAP) benefits, following court orders requiring the government to act amid the ongoing shutdown. There was $6 billion in the contingency fund at the start of October, USDA Undersecretary Patrick Penn detailed, noting the agency used $450 million to fund for SNAP state agencies’ administrative expenses (SAE) and an additional $300 million for the Nutrition Assistance Program (NAP) block grants for Puerto Rico and American Samoa. Penn detailed that for November, USDA will obligate $450 million from the contingency fund for SAE, and an additional $150 million for NAP in Puerto Rico and American Samoa. That will leave $4.65 billion that will be obligated to cover 50% of eligible households’ current allotments, he said. As for the court suggestion that USDA tap Section 32 funds for SNAP, Penn said, “USDA has determined that Section 32 Child Nutrition Program funds must remain available to protect full operation of Child Nutrition Programs throughout the fiscal year, instead of being used for SNAP benefits,” adding those funds are “not contingency funds for SNAP.” If USDA were to tap $4 billion from the Child Nutrition Program for SNAP, it would mean a “permanent loss to Child Nutrition Programs for the entirety of their annual operations in FY 2026.” Penn also argued that tapping $450 million of those funds for WIC in November does not undermine performance of the Child Nutrition Programs. USDA is estimating it could take weeks or even several months for states to be able to issue the partial SNAP benefits. The administration said additional appropriations — at least $4 billion — would be needed to provide full benefits. Tens of millions of Americans missed SNAP payments over the weekend as the shutdown nears a record length. Food banks in Texas and California reported surging demand, with stadium parking lots turned into large-scale distribution sites for boxes of produce, meat, and staples. Twenty-five Democratic-led states sued USDA last week, pressing the department to release contingency funds it previously claimed were “not legally available to cover regular benefits.” Two federal judges sided with the plaintiffs, ruling that withholding payments was likely unlawful. U.S. District Judge John McConnell of Rhode Island ordered USDA to issue either full payments by Monday or partial payments by Wednesday (link). He cited 2019 Trump-era guidance affirming that contingency funds “are available if SNAP funds lapse due to a government shutdown.” USDA Secretary Brooke Rollins said Sunday that the contingency fund “won’t even cover about half of what November would cost,” adding that President Trump “has been very clear — he wants us to do everything we can to make sure that we can keep these benefits going.” More than 40 million Americans rely on SNAP, leaving uncertainty about how low-income families will put food on the table if the program stalls again. The Trump administration must now report to the courts and to Congress on how it plans to restore full benefits if the shutdown continues into December. Judge McConnell ordered USDA to update the court once contingency funds are exhausted, likely within weeks. Lawmakers in both parties have floated short-term appropriations to backfill SNAP and child nutrition accounts, but no agreement has yet emerged. Advocates say additional court hearings could come as soon as next week if benefits fail to reach households on schedule.

FINANCIAL MARKETS

—Equities today: Equity markets are risk-off this morning with U.S. equities opening significantly lower while bonds are bid thanks to the combination of cautious comments from banking executives at a global conference overnight and disappointing PLTR earnings (shares down 7%+ in premarket trade). Stocks fell in Asia and Europe, as did U.S. equity futures, after two Fed policymakers cast some doubt about whether the central bank would cut rates again next month. Austan Goolsbee, the president of the Chicago Fed, said that persistent inflation meant that he was “not decided” about making another cut, while Lisa Cook, a Fed governor, said inflation and a slowing labor market meant that the central bank’s decision was still “live.” In Asia, Japan -1.7%. Hong Kong -0.8%. China -0.4%. India -0.6%. In Europe, at midday, London -0.6%. Paris -1.3%. Frankfurt -1.3%.

—Equities yesterday: 

Equity Index	Closing Price  Nov. 3	Point Difference  from Oct. 31	% Difference  from Oct. 31
Dow	47,336.68	-226.19	-0.48%
Nasdaq	23,834.72	+109.77	+0.46%
S&P 500	6,851.97	+11.77	+0.17%

—Quote of note: “It’s likely there’ll be a 10% to 20% drawdown in equity markets sometime in the next 12 to 24 months.” — David Solomon of Goldman Sachs, predicting a market swoon at an investment summit in Hong Kong. Solomon is not alone; Jay Powell, the Fed chair, recently warned of “fairly highly valued” stock prices.

—ADM cuts 2025 earnings outlook on weaker crush margins, biofuel policy delays

Agribusiness giant expects rebound in 2026 as policy and trade clarity improve

Archer Daniels Midland (ADM) reduced its full-year 2025 earnings forecast, citing weaker soybean crush margins and delays in U.S. biofuel policy implementation as key drags on profitability. The company now anticipates adjusted earnings of $3.25 to $3.50 per share, compared with a previous projection near $4.00.

ADM executives said global processing margins have softened amid high input costs and slower-than-expected demand growth in key markets, including China and Europe. Meanwhile, uncertainty surrounding the U.S. Environmental Protection Agency’s pending renewable fuel standards has constrained investment decisions in ADM’s biofuel segment.

Despite the near-term pressure, ADM noted it expects 2026 results to improve, driven by “greater policy clarity and improving global trade flows,” particularly as export demand for U.S. soymeal and oil strengthens and new renewable diesel capacity comes online.

—Starbucks hands over majority control of China operations to Boyu Capital

U.S. coffee giant bets $4 billion joint venture will revive struggling China sales

Starbucks said it will form a $4 billion joint venture with Boyu Capital to manage its China business, ceding up to 60% ownership to the Hong Kong–based investment firm while retaining a 40% stake. The deal, valued to close in the second quarter of fiscal 2026, marks a major strategic shift as Starbucks seeks to reverse declining sales in its second-largest market.

The company values its China operations at more than $13 billion but has faced setbacks from pandemic-era disruptions and fierce competition from domestic rivals such as Luckin Coffee. In recent quarters, Starbucks has turned to steep discounting to lure customers, eroding average ticket prices and compressing margins. The Boyu partnership is intended to stabilize the brand, localize management decisions, and restore profitability in a market that remains key to Starbucks’ long-term global growth ambitions.

—BNSF sees strong Q3 on higher intermodal and ag shipments

Railway’s profit and revenue edge higher as operating ratio improves to 64.1%

BNSF Railway reported modest gains in the third quarter of 2025, with revenue up 2% to $6 billion and net income rising 5% to $1.4 billion from a year earlier. The railroad attributed the improvement to higher overall volume, which climbed 1%, and stronger pricing power that lifted average revenue per car by 1%.

The company said consumer products volume rose 2%, reflecting a rebound in West Coast imports and stronger automotive shipments tied to increased vehicle production.

Agricultural and energy products saw slight gains, supported by improved grain exports, though offset by lower domestic grain and feed movement.

Industrial products volume declined 2% amid softer construction and petroleum demand, while coal shipments also fell 2% due to mine production challenges.

BNSF improved its operating ratio to 64.1% from 65.1% in the same quarter last year, signaling continued efficiency gains despite uneven sector performance.

—Cook says December Fed meeting ‘live,’ reflects on legal battle and labor risks

Governor cites rising unemployment, data blackout from shutdown, and tariff-driven inflation pressures

Federal Reserve Governor Lisa Cook said Monday she has not decided whether to support another interest rate cut at the December policy meeting, while briefly addressing the Trump administration’s ongoing effort to remove her from the central bank. Speaking at the Brookings Institution in Washington, Cook emphasized that “every meeting, including December’s, is a live meeting,” signaling that officials are leaving all options open for the final rate decision of the year. She said she backed the October quarter-point cut to 3.75%–4.00%, citing growing downside risks to employment that outweigh remaining inflation pressures.

Cook acknowledged that tariffs are adding roughly 0.5 percentage point to inflation, but said underlying price trends continue to cool. “The dual mandate is in tension,” she said, adding that she is watching labor and inflation data “very, very carefully.”

The Fed governor also warned that the ongoing government shutdown — which began Oct. 1 and halted major data releases — has made it “more difficult” for policymakers to gauge economic conditions. She noted that hiring has slowed and job postings have fallen, while continuing claims for unemployment benefits have risen. “The labor market can deteriorate very quickly,” she said.

Cook briefly referenced the lawsuit challenging her dismissal, saying only, “It is the honor of my life to serve on the Board of Governors of the Federal Reserve System.” Federal courts have temporarily blocked President Donald Trump’s attempt to remove her over disputed ethics allegations, with the case expected to reach the Supreme Court this winter.

She also commented on broader trends, saying artificial intelligence could eventually lift productivity, while Trump’s immigration policy has constrained labor supply, limiting how far job conditions can soften.

Cook closed by invoking her family’s civil-rights legacy and reaffirming her commitment to public service: “Independence is something worth pursuing. This too shall pass. So I will continue doing this work on behalf of the American people.”

—China’s “strong yuan” strategy signals new phase in currency policy

Beijing seeks global confidence in the renminbi, not just a higher exchange rate

China is moving toward a more assertive “strong yuan” policy, echoing the U.S. Treasury’s long-standing “strong dollar” stance. President Xi Jinping and top policymakers are promoting a stable, internationally recognized currency to expand the yuan’s global role in trade and finance.

While Beijing’s goal isn’t direct appreciation, stability and credibility are crucial for the yuan’s use as a medium of exchange and store of value. Economists at Standard Chartered, led by Ding Shuang, said China’s initiatives to internationalize the currency “generally help keep its value buoyant.”

The new 2026–2030 five-year plan upgrades previous cautious language, calling to “promote the internationalization of the RMB.” The People’s Bank of China followed up with plans to deepen two-way financial openness, expand yuan use in trade, and grow offshore markets.

PBOC officials have grown more vocal about positioning the yuan among the world’s leading currencies to reduce reliance on the dollar. Yet Beijing isn’t aiming to dethrone the greenback: China continues to issue dollar-denominated sovereign bonds, underscoring pragmatism over confrontation.

As Ding noted, China’s more realistic objective “might be to achieve peer status” with the British pound or Japanese yen — marking a gradual, strategic elevation of the yuan’s global stature rather than a head-on challenge to U.S. dominance.

AG MARKETS

—StoneX estimate U.S. corn yield at 186.0 BPA and soybean yield at 53.6 BPA. Those compare to expectations of lower yields based on media reports of disease and other yield woes. The StoneX corn number was a slight uptick from their prior 185.9 while beans was down from 53.9 last month. USDA releases its estimates Nov. 14, with many in the trade thinking they will be higher than most pre-report forecasts.

—China export controls emerge as factor in rising fertilizer prices

Geopolitical tensions around top suppliers raise concern about food inflation

Fertilizer prices are climbing again amid renewed geopolitical tensions, with China’s export restrictions and European tariffs on Russian and Belarusian supplies driving fresh concerns about global food inflation.

International diammonium phosphate (DAP) prices hit a three-year high of $795 per metric ton in August, remaining 34% higher year-to-date despite a slight dip in September. The World Bank’s fertilizer index, which had stabilized in 2024, has surged again — reflecting what economist John Baffes calls a “combination of several factors: China’s export restrictions, European tariffs, strong demand, and a tight phosphate market.”

China, which produces 46% of global phosphate rock, has emerged as a central force in the fertilizer trade. In October, Beijing halted exports of urea and DAP, mirroring its earlier export controls on rare-earth elements. Analysts believe the move is designed to secure domestic supply for agricultural production and as a potential response to President Donald Trump’s tariffs and broader U.S./China tensions.

The European Union’s sanctions on Russia and Belarus have further tightened global supply, with new fertilizer tariffs set to rise through 2028. Russia and Belarus together account for roughly one-third of global potash output, making alternative sourcing both difficult and costly.

These supply disruptions are poised to cascade into global food markets. Fertilizer represents about 18% of U.S. soybean production costs and more than 35% for wheat and corn, according to USDA data. In developing countries, the burden is even higher, raising fears of reduced yields and rising food prices.

The International Fertilizer Association warns that even modest reductions in fertilizer use — such as a 5% cut in nitrogen application — can lower wheat production by 3.1% and rice output by 1.5%.

Bottom Line: With fertilizer and energy costs typically feeding into grain prices on a 12–16-month lag, analysts expect the inflationary impact to intensify well into 2026.

—Australia’s first canola cargo to China in five years nears departure

Trial shipments mark potential reopening of key export channel after 2020 suspension

Australia is preparing to resume canola exports to China for the first time since 2020, with the bulk carrier Armonia A expected to depart from Esperance, Western Australia, for Qingdao within the week, Bloomberg reports. The vessel will load about 60,000 tons of canola as part of a trial shipment authorized under new phytosanitary terms negotiated between the two governments.

At least three trial cargoes have been booked for the fourth quarter, signaling a tentative reopening of trade after China halted Australian imports five years ago over contamination concerns. The Australian agriculture department confirmed the ongoing trial, which requires cargoes to contain less than 1% of “non-seed material.”

The move comes as China’s relationship with top supplier Canada remains strained, with almost all of China’s 6.39 million tons of canola imports in 2024 sourced from Canada. Grain Trade Australia CEO Pat O’Shannassy welcomed the development but cautioned that “there’s still a trial that needs to meet whatever criteria has been established.”

Upshot: A successful shipment could mark a significant milestone in restoring Australia’s place in China’s oilseed supply chain.

—Agriculture markets yesterday:

Commodity	Contract  Month	Closing Price Nov. 3	Change from  Oct. 31
Corn	December	$4.34 1/4	+2 3/4 cents
Soybeans	January	$11.34 1/4	+19 cents
Soybean Meal	December	$320.80	-80 cents
Soybean Oil	December	49.84¢	+116 points
SRW Wheat	December	$5.43 1/2	+9 1/2 cents
HRW Wheat	December	$5.31 3/4	+7 1/4 cents
Spring Wheat	December	$5.85 1/2	+5 1/2 cents
Cotton	December	65.68¢	+14 points
Live Cattle	December	$232.20	+$2.525
Feeder Cattle	January	$336.525	+$4.625
Lean Hogs	December	$80.60	-67 1/2 cents

FARM POLICY

—Update on FSA’s partial reopening and farm program payments. It took a while, as expected, for USDA Farm Service Agency (FSA) offices to gear up after being shut down at the start of a new fiscal year. Some FSA offices are rotating employees to meet the announcement of two FSA staffers per office. Patience was needed to get various funding approvals from the Office of Management and Budget (OMB), and that process has been completed. MAL systems went up last Friday and FSA should be fully functional with loans and money being direct deposited into producers’ bank accounts if approval action by the staff has been taken. Meanwhile, a county office should be able to share the ARC/PLC formula to confirm the money received.

ENERGY MARKETS & POLICY

—Oil prices today fall over 1% on demand worries, strong dollar

Weak manufacturing data, OPEC+ pause and firmer greenback weigh on crude

Oil prices declined more than 1% on Tuesday as weak global manufacturing data, a stronger U.S. dollar, and OPEC+’s plan to pause output hikes early next year pressured the market.

Brent crude fell 76 cents, 1.2%, to $64.13 a barrel, while U.S. West Texas Intermediate dropped 81 cents, 1.3%, to $60.24.

OPEC+ on Sunday approved a modest output increase for December but will halt further hikes in the first quarter of 2026. Meanwhile, the lift from U.S. sanctions on Russian energy firms Lukoil and Rosneft was fading.

Adding to bearish sentiment, the dollar hovered near a three-month high as the Federal Reserve remains split on whether to cut rates in December, curbing investor expectations for looser monetary policy.

In Asia, Japan’s manufacturing activity contracted at its fastest pace in 19 months, driven by weaker demand in automotive and semiconductor sectors. Traders are awaiting U.S. inventory data from the American Petroleum Institute, with a Reuters poll showing stockpiles likely rose last week.

—Oil prices steady Monday as OPEC+ signals restraint for early 2026

Traders weigh modest output hike, weak Asian data, and Fed uncertainty amid shifting demand outlooks

Oil prices held steady Monday as traders digested OPEC+’s decision to raise production by a modest 137,000 barrels per day in December while pausing additional hikes during the first quarter of 2026. Brent crude settled at $64.89 a barrel, up 12 cents (0.2%), and West Texas Intermediate closed at $61.05, up 7 cents (0.1%).

The group’s move balanced market expectations, easing oversupply fears while signaling caution heading into next year. Analysts said the plan “balances short-term growth in supply with a signal of restraint heading into next year,” as Morgan Stanley raised its first-half 2026 Brent forecast to $60 from $57.50. The International Energy Agency continues to see a potential 4 million bpd surplus in 2026, though OPEC maintains a view of a more balanced market.

European oil executives in Abu Dhabi warned against “overly bearish” forecasts, noting that U.S. sanctions on Rosneft and Lukoil and continuing attacks on Russian infrastructure could tighten supply. Meanwhile, Asian factory data renewed concern about slowing demand, with surveys showing broad contractions — particularly in China, where oil demand growth has cooled as the country shifts toward renewables. TotalEnergies CEO Patrick Pouyanné said demand prospects remain “firm over the longer term,” driven by India.

A strong U.S. dollar, near three-month highs, added pressure by making oil costlier in other currencies. Mixed signals from Federal Reserve officials also fed uncertainty: Chicago Fed’s Austan Goolsbee said he’s in no rush to cut rates, while San Francisco Fed’s Mary Daly backed the October cut but urged caution ahead of the Dec. 9–10 meeting. Lower rates generally boost demand by easing credit conditions.

Adding to geopolitical tension, President Donald Trump said the U.S. could deploy troops or conduct air strikes in Nigeria in response to violence against Christians. Such action, if taken, could disrupt West African crude exports, adding a new dimension to the market’s risk calculus.

TRADE POLICY

—House Democrats urge Trump to reopen and toughen USMCA deal

Lawmakers call for higher labor standards, stronger enforcement, and curbs on Chinese “backdoor” trade via Mexico

More than 100 House Democrats are urging President Donald Trump to pursue a “significant renegotiation” of the U.S.-Mexico-Canada Agreement (USMCA) during its upcoming 2026 review, arguing the trade pact has failed to deliver on promises to boost U.S. jobs and farm incomes.

In a letter (link) to Trump submitted to the USTR’s docket on Nov. 3, the 105 lawmakers said USMCA has “failed to deliver improvements for American workers, family farmers, and communities nationwide.” They cited widening trade deficits with Mexico and Canada and warned that growing Chinese investment in Mexico is exploiting the pact’s duty-free access to the U.S. market to evade trade enforcement.

The Democrats are pressing for the review to include tougher rules on labor and environmental standards, stronger regional content requirements for autos and high-tech goods, and removal of USMCA’s Buy American exemption that allows Canadian and Mexican goods to qualify as U.S.-made in federal procurement. “Eliminating this loophole would restore an important source of domestic manufacturing investment,” they wrote.

Lawmakers also called for upgrades to the deal’s rapid-response labor mechanism, which they said has yielded “mixed results” in raising wages and worker protections in Mexico. They proposed adding a “North America-wide minimum wage” for manufacturing sectors and a “facility-specific environmental RRM” to enforce emissions reductions.

Citing recent findings by the Independent Mexico Labor Expert Board that Mexico has “repeatedly failed” to punish labor-law violators or protect union organizers, the Democrats said the upcoming USMCA review is a critical chance to fix structural flaws. “The administration must use this process to deliver the benefits you promised the American people,” they wrote, adding that a revised deal incorporating these reforms could “enjoy wide bipartisan support.”

—Corn growers press White House to back full USMCA renewal

NCGA urges Trump administration to move quickly on 16-year extension, citing strong export gains and successful dispute victories under the trade pact

The National Corn Growers Association (NCGA) is calling on the Trump administration to support a full 16-year renewal of the United States–Mexico–Canada Agreement (USMCA), stressing the deal’s importance to U.S. corn exports and North American market stability.

In comments submitted to the Office of the U.S. Trade Representative, NCGA President Jed Bower said the agreement has “enormously benefited American corn growers,” helping drive steady growth in corn and ethanol exports to Mexico and Canada since USMCA took effect in July 2020. He also emphasized that U.S. producers depend on the continent’s integrated rail network to remain competitive against South American suppliers.

The review process for extending the USMCA must begin by July 2026. If not renewed, the pact would expire in 2036, with annual reviews resuming. Bower warned against “any efforts that could result in termination,” saying NCGA’s priority is ensuring a “swift and successful extension” of the trade accord.

The group also pointed to the agreement’s dispute settlement mechanisms, which U.S. corn growers used successfully to challenge Mexico’s 2023 decree restricting genetically modified corn. NCGA said it will “continue to lead the charge” until renewal is secured, arguing that USMCA remains essential to maintaining strong agricultural trade within North America.

Of note: A letter (link) signed by 124 organizations representing the American food and agricultural value chain, including the National Corn Growers Association (NCGA), previously filed a letter voicing support for a full 16-year renewal of the USMCA in the public consultation process for the 2026 Joint Review of the USMCA. 

CONGRESS

—Senate Ag panel narrowly advances Trump USDA nominees; clears Grain Standards Act

Inspector General pick John Walk clears committee amid questions on independence; two other USDA nominees move forward

The Senate Ag Committee on Monday advanced three of President Donald Trump’s nominees for key USDA roles, largely along party lines.

John Walk, nominated to serve as USDA inspector general, was approved in a 12–11 vote after Democrats questioned his political independence due to prior service in Trump administration posts and his involvement with the conservative Project 2025 policy blueprint.

The panel also advanced former New Mexico congresswoman Stella Yvette Herrell, Trump’s choice for assistant secretary of agriculture, by a 13–10 vote, with Sen. Ben Ray Luján (D-N.M.) joining Republicans in support.

Meanwhile, Mindy Brashears, previously confirmed as undersecretary for food safety during Trump’s first term, advanced again by a 12–11 margin.

All three nominees now head to the full Senate for confirmation votes, though no floor schedule has been set.

Meanwhile, the panel cleared HR 4550, United States Grain Standards Reauthorization Act of 2025. The vote was unanimous, 23 by roll call vote.

POLITICS & ELECTIONS

—Former Vice President Dick Cheney died Monday night at 84. Cheney died of complications from pneumonia and cardiac and vascular disease, his family said in a statement. Cheney was vice president from 2001 to 2009. He also served in the House GOP leadership from 1987 to 1989. Cheney also was Defense secretary from 1989 to 1993. A prominent conservative who embraced low taxes and pushed for a strong military response to the Sept. 11, 2001, attacks, he later broke ranks with the Republican Party when he endorsed Kamala Harris over Donald Trump in the 2024 election.

Former President George W. Bush hailed Cheney as ‘the one I needed’ as vice president. Bush said that Cheney’s death was “a loss to the nation and a sorrow to his friends… Laura and I will remember Dick Cheney for the decent, honorable man that he was,” Bush said in a statement.

—Voters head to the polls in California to decide whether to approve new House maps. There are also gubernatorial elections in New Jersey and Virginia. If Democrats prevail across the board, they’re ready to take that as an endorsement of their shutdown strategy.

—Charlie Cook’s “Beaufort Scale” for U.S. politics: Ten questions to measure the 2026 winds

Cook outlines a 10-point “political weather” test for Tuesday’s elections — from New Jersey to Georgia — to gauge whether the winds are calm or brewing into a partisan storm.

Veteran political analyst Charlie Cook, writing in National Journal, says this week’s off-year elections should be read not as isolated races but as a barometer for 2026’s political climate. “Too many analysts — including some who should know better — have put far too much emphasis on the pair of odd-year gubernatorial races,” Cook cautions. Instead, he’s offering his own “Beaufort Scale” for politics — 10 questions that together reveal whether Democrats face “a horrible night (three or fewer yes answers)” or a “happy-days-are-here-again” scenario with eight or more.

The 10 Questions on Charlie Cook’s political “Beaufort Scale”

Cook’s self-devised political test measures where the winds are blowing next year. Each question, answered “yes” or “no,” offers a data point for assessing whether Democrats are weathering calm seas or heading into rough waters:

1. Do Democrats hold onto the New Jersey governorship?

2. Do Democrats win more than 65% of the seats in the New Jersey state Assembly?

3. Do Democrats win the race for Virginia’s governor?

4. Do Democrats win the Virginia lieutenant governor’s seat?

5. Do Democrats win the Virginia attorney general race?

6. Do Democrats retain their majority in the Virginia House of Delegates?

7. Do Democrats win a governing trifecta in Virginia — by taking the governorship and House of Delegates, while already holding the state Senate?

8. Does the California ballot initiative allowing partisan redistricting pass?

9. Do the three Democratic Supreme Court judges in Pennsylvania win re-election?

10. Do Democrats win both special elections to the Georgia Public Service Commission?

As Cook puts it, “The number of ‘yes’ answers will tell you, on a scale of one to ten, whether Democrats had a horrible night or if they’ll be singing ‘happy days are here again.’”

New Jersey and Virginia as First Indicators

In New Jersey, Cook notes, Democrats enjoy structural advantages but warns that history “isn’t on their side.” The last time either party won a third consecutive gubernatorial term was in 1961. Democratic Rep. Mikie Sherrill faces Republican Jack Ciattarelli, whom Cook calls “a credible GOP contender in a deep-blue state.”

Virginia, meanwhile, offers what Cook calls “a slightly less blue tilt.” Democrat Abigail Spanberger leads Republican Lt. Gov. Winsome Earle-Sears, aided by Trump’s “lagging approval rating,” which may drag down GOP prospects. Still, Cook flags the attorney general race as a weak link for Democrats, calling it “the party’s most vulnerable statewide contest.”

National Undercurrents in State Races

Cook frames California’s redistricting initiative as a test of partisan appetite: “Readers of this column are almost certainly well-versed on the California ballot initiative … to temporarily take redistricting away from the independent commission.” What might sound procedural, he notes, has become “an inevitable referendum on President Trump — not helpful in a state where he averaged just 38.3 percent of the major-party vote.”

In Pennsylvania, Cook reminds readers that Supreme Court retention votes “have become highly partisan,” with both parties pouring resources into races that used to be low-profile. “No state is more evenly divided than the Keystone State,” he observes.

And in Georgia, he highlights the Public Service Commission races — down-ballot contests that “could signal voter unease over rising electric rates and the politics of energy infrastructure.” Though Republicans are favored, Cook notes that “rising electric prices are becoming a populist issue,” suggesting Democrats could surprise.

Takeaway: Cook’s closing message is classic Cook — grounded, empirical, and wary of hype. “The tests above are certainly not of equal difficulty; yet either party that gets close to acing all of them will definitely be having a very good night,” he writes. For election watchers, his “Beaufort Scale” offers a crisp early-warning system — a way to measure whether the political air on Tuesday night is still or whether storm clouds are gathering for 2026.

CHINA

— China warns U.S. to respect ‘four red lines’ as trade truce takes hold

Beijing’s ambassador highlights Taiwan, democracy, human rights, and development rights as potential deal-breakers in post-truce relations

China urged the United States to steer clear of what it calls its “four red lines” if the new trade truce between Presidents Donald Trump and Xi Jinping is to endure. Speaking virtually to the U.S./China Business Council, Chinese Ambassador Xie Feng said Washington must avoid challenging Beijing on Taiwan, democracy and human rights, China’s political system, and development rights. “The most important thing is to respect each other’s core interests and major concerns,” Xie said, warning that disputes “over tariffs, industry or technology will lead to nothing but a dead end.” He emphasized that the “pressing priority” is to follow up on the consensus reached by the two leaders in Busan, South Korea, and “reassure both our countries and the world economy with concrete actions.”

The remarks underscored the fragility of the one-year truce agreed upon last week and the deep divisions that remain. According to the Wall Street Journal, U.S. officials recently persuaded Trump not to discuss next-generation artificial intelligence chips with Xi due to national security concerns. Beijing continues to seek access to advanced U.S. semiconductors, including Nvidia’s Blackwell chip.

Despite those tensions, Xie’s comments and follow-up discussions between Defense Secretary Pete Hegseth and Chinese Defense Minister Dong Jun suggest that both sides are trying to stabilize relations. The two defense chiefs agreed to establish direct military communication channels to prevent conflict, even as Washington warned Beijing about its naval maneuvers near Taiwan and in the South China Sea.

Economist David Daokui Li, an adviser to Chinese policymakers, told Bloomberg TV the Busan talks represented “a breakthrough” because China was “treated as an equal partner” by the U.S. He predicted that remaining trade, financial, and technology disputes were “small potatoes” that could eventually be resolved.

WEATHER

— NWS outlook: Unsettled weather for the Northwest & Northern California, with an

increasing threat for heavy rain for both areas today into Wednesday… …Strong winds for coastal sections of northern California late Tuesday into Wednesday.