Hello, I'm Mark Pearson. The bulls were run out of Wall Street this week as record oil prices, lackluster profit reports, and a weaker dollar renewed concerns over the U.S. economy.
**Crude oil futures surpassed $90 per barrel briefly on Thursday, despite growing sentiment among analysts that fundamentals do not support such high prices.
The spike -- **coupled with weaker-than-expected earnings reports from 3M, Honeywell and Caterpillar -- gave equity investors little incentive to buy, **and all the major stock indices closed sharply lower on Friday.
**Meanwhile, the U.S. dollar fell to a record low against the Euro. Since a weaker dollar makes U.S. goods cheaper overseas, investors often turn to commodities as a hedge and **that helped push corn and soybean prices higher.
With prices at these levels, the government likely will dole out less to America's growers in the form of farm payments. But the arbiter of global trade disputes claims the U.S. continues to subsidize some farmers illegally.
This week, the World Trade Organization put the final touches on a resounding defeat for American cotton producers and a major victory for the Brazilian cotton industry. The WTO ruled the United States did, in fact, illegally subsidize U.S. growers to the detriment of West African countries and other rival exporters.
U.S. trade officials dispute that claim and insist the 2002 farm bill brought cotton subsidies into WTO compliance. They also pledge to appeal the WTO decision in future months.
The battle over world trade and domestic supports for U.S. agriculture programs is a major factor in the 2007 farm bill.
This week, Senate Agriculture Committee Chairman Tom Harkin reached an agreement with North Dakota Senator Kent Conrad and Georgia Senator Saxby Chambliss over spending priorities. But much of the fine print remains to be hammered out.
Senate mark-up of the farm bill could begin next week but it's still unclear whether Bush Administration priorities for slashing subsidies to the nation's wealthiest farmers will be part of the bill.
Acting USDA Secretary Chuck Conner, speaking at this week's World Food Prize in Des Moines, Iowa, remained positive on the bill's outlook.
Chuck Conner, Acting USDA Secretary: "I'm going to remain optimistic that we can get this bill on the President's desk and get a signature. I'm confident we can get this done for the American farmer."