The Week Ahead: April 24-30, 2017

Trump meets ag stakeholders on Tuesday | Trump tax plan this week | Perdue nomination vote

A Senate vote today on Sonny Perdue as the new USDA Secretary and a White House agriculture-related meeting Tuesday are the key focus items for the week ahead.

Lawmakers return to Washington after their two-week spring break – the Senate today and the House on Tuesday.

First up for the Senate will be a vote on the nomination of Sonny Perdue to be USDA Secretary. The chamber is expected to easily approve Perdue.

Hearings on tap include ones on disaster loans, financial reform efforts, the rise in technology in China, the border wall on the US-Mexican border, small business economic growth and the WOTUS rule.

President Donald Trump will be busy this week, including a meeting Tuesday with agriculture groups. Trump will host a roundtable discussion with farmers and will sign an Executive Order to protect and provide relief for rural America. Trade policy and a new farm bill will likely be key issues raises at the White House confab.

As early as Wednesday, Trump will release his own tax plan as House Republicans renew efforts to advance their own blueprint. Trump told the Associated Press he expected his own tax plan to be unveiled “Wednesday or shortly thereafter” and that it would include a “massive tax cut” for individuals and businesses, which he described as “bigger I believe than any tax cut ever.”

April 29 marks Trump’s 100th day in office. But before that happens, lawmakers will have to come to terms on a way to keep the US government funded beyond Friday as the current funding mechanism expires that day. That will be a major focus in Washington as the week unfolds.

More updates on the housing sector are ahead with a reading on the US economy in the first quarter of the year also on tap. The week opens with the Chicago Fed National Activity Index and Dallas Fed Manufacturing Survey today, with the FHFA House Price Index S&P Corelogic Case-Shiller HPI, New Home Sales, Consumer Confidence and Richmond Fed Manufacturing updates on Tuesday. Thursday brings data on Durable Goods Orders, International Trade in Goods, Weekly Jobless Claims, Pending Home Sales Index and the Kansas City Fed Manufacturing Index. Capping off the week will be the first look at first quarter GDP along with the Employment Cost Index, Chicago PMI and Consumer Sentiment readings. The housing updates will be watched after the positive data on sales of existing homes while the reading on the US economy looms large for overall economic prospects for the year. Foreign economic updates potentially of note will come from the Eurozone, China, Japan and more.

Comments from Fed officials ahead will be monitored for their views relative to the Fed’s balance sheet. The keys will be if there are any shifts in the outlook on that front compared to the current thinking that it will potentially start later this year. As we have seen previously, there can always be more remarks from Fed officials than are “officially” scheduled, particularly via interviews with media outlets, etc. Minneapolis Fed’s Kashkari (current voter) is on the schedule twice today with Philadelphia Fed’s Harker (current voter) on the schedule for Friday. His comments, if they cover the first quarter GDP results that will be released earlier that day, could be of note.

Weather forecasts for the extended period are for warm conditions over much of the US while things are expected to be drier in areas of the Corn Belt through July. The near-term outlook, however, will remain key. Traders will watch weather patterns to see if they will translate into gains in corn planting progress ahead given that progress has been running behind the average pace thus far this season. Winter wheat ratings will be looked to improve again after another round of precip for Plains HRW wheat country. That will keep the Crop Progress update on Monday in traders’ minds. Demand continues as an attention-getter, with today’s Grain Inspections and Weekly Export Sales update on Thursday the main markers of note there. Other USDA data due out include Cold Storage today, which will provide an update on pork and beef demand in particular, and the monthly Food Price Outlook arrives on Tuesday. Foreign weather and crop prospects are still potential factors, but it is almost to the point where it would take a reduction in South American crop prospects before a positive market response could be seen.