The Week Ahead: June 20-26, 2016

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The House is out Monday but in the rest of the week. The Senate is in session each week day. The House will be taking next week off. The Senate has nine days of session scheduled before leaving for the July 4 holiday. Both chambers will be out of town for the political conventions in the last two weeks of July as well as all of August.

Several Federal Reserve-related topics of note. Fed Chairwoman Janet Yellen makes two appearances on Capitol Hill to deliver the Fed’s semiannual monetary policy report to Congress. Yellen is scheduled to appear before the Senate Banking Committee on June 21 and the House Financial Services Committee the next day. Another focus will be on how big banks fare under extreme conditions when a report is released June 23 by the Fed via its annual stress tests.

The Fed also conducts the Comprehensive Capital Analysis and Review (CCAR), which evaluates a bank holding company’s capital adequacy and planned capital distributions, such as dividend payments and common stock repurchases. If the Fed objects to a bank’s capital plan, the company may not make any capital distribution without the regulator’s approval. CCAR results will be released June 29.

An international event is also being watched closely regarding the June 23 Brexit vote in the United Kingdom. And a lingering issue is the long Senate effort to craft GMO food labeling legislation.

The House and Senate versions of the Fiscal Year 2017 agriculture appropriations bills are still waiting for floor votes in their respective chambers. Senate Majority Leader Mitch McConnell (R-Ky.) has mentioned adding the agriculture appropriations bill to the chamber’s Commerce-Justice-Science (CJS) spending bill to advance as many funding measures as possible before Congress leaves for summer recess July 15. But that effort has stalled as lawmakers fight over including gun control legislation in the C-J-S bill.

Zika funding sought. House Majority Leader Kevin McCarthy (R-Calif.) said one of the top “must dos” for lawmakers the week of June 20 is a deal on supplemental spending to combat Zika. McCarthy said he wants a final conference agreement reached with the Senate by week’s end, when the House begins a 10-day July 4 recess. He said a final deal may come to the House floor by June 24.

GMO food labeling measure in the Senate is still being discussed. Senate Ag Committee ranking member Debbie Stabenow (D-Mich.) last week said that she was making progress crafting legislation that could get both Republicans and Democrats on board, but several issues remained, such as how GMO information would be presented on food packaging.Another food stamp hearing. The House Agriculture Committee on Wednesday will discuss the “past, present and future” of the Supplemental Nutrition Assistance Program (SNAP).

Big Data in agriculture. On Thursday, House Ag Subcommittee on General Farm Commodities and Risk Management will hold a hearing on Big Data and agriculture, which is expected to focus in part on using drone technology in farming. In a report last year, Informa Economics found that farmers could increase productivity by as much as $12 per acre if they used aerial drones to spot crops diseases and pests.

Catfish imports. The House may consider a Senate-passed resolution that would roll back USDA oversight of catfish import inspections.

Other hearing topics include the renewable fuels standard (RFS), sound science at EPA and the budget process.

In other financial-related events, the Senate Banking Committee will hold a hearing June 23 on capital and liquidity rules. The House Financial Services Committee said its Task Force to Investigate Terrorism Financing will hold its final hearing June 23 to summarize its two-year survey of current efforts to combat terrorist financing and related forms of illicit finance. Meanwhile, Treasury Secretary Jacob Lew will preside over a June 21 meeting of the Financial Stability Oversight Council. The agenda includes a discussion of the Council’s 2016 annual report.

Economic updates get condensed into midweek forward with housing data and more on tap. Wednesday’s releases include the FHFA House Price Index and Existing Home Sales, while Thursday’s packed schedule includes weekly jobless claims, the Chicago Fed National Activity Index, the PMI Manufacturing Index flash update, New Home Sales and Leading Indicators. The week wraps up with a couple of reports – Durable Goods and Consumer Sentiment. Of course the biggest focus will be on Thursday and UK citizens go to the polls and vote on whether the country will stay a member of the European Union (EU) or not. That will keep markets on edge all week and the results will drive trading to close out the week. That could overshadow a lot of other developments in the week ahead. Energy markets will be assessing the Brexit vote too as they try to figure if the rise in US rig counts will continue even as oil prices backed away from the $50-per-barrel mark.

Ag interests will continue to watch weather and the situation in South America where shipping and crop issues are steering business toward the US for corn and soybeans. Winter wheat harvest should keep moving north in the Plains unless Mother Nature says otherwise, and that could keep wheat futures under pressure. On the data side, Monday’s Crop Progress update is always closely watched, especially with corn and soybean ratings higher than traders have expected. The Weekly Export Sales update will show another round of hefty soybean sales and traders will watch for signs demand for US corn remains solid. The week wraps up with the Food Price forecast update and then the afternoon brings a flurry of livestock data – Quarterly Hogs & Pigs and monthly Cold Storage and Cattle on Feed updates.

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.