text: DOMESTIC INTSUMFOOD & AG: Ukrainian grain exports increased 22.7% in July, driving the price of wheat down by nearly 15%. Despite the increase in Ukrainian exports, grain exports are still down nearly 52% year-over-year. Agriculture analysts expect total world production of wheat to fall 4% from last year and corn production to fall by about 1%. (AC: Unless restrictions on fertilizer exports change, I expect the 2022-2023 yield to fare worse. – M.S.)ENERGY: NSTRDALIO ON TIT-FOR-TAT ESCALATION WITH CHINA: Bridgewater’s Ray Dalio warned this week that tit-for-tat escalation with China will lead to disruption that makes Russia-Ukraine look “minor by comparison.” Dalio was careful to say that war is not inevitable, but added that the two sides are “following the classic path to war”. Dalio also described a situation in which defending Taiwan would seem illogical, but may be necessary for a declining empire to prevent “a loss of stature and power over other countries”. (AC: Former CIA Acting Director Mike Morell and Harvard Professor Graham Allison have for years described the Thucydides Trap, which says that a revisionist power challenging a status quo power results in war 70% of the time. My concern remains that Taiwan is a “put up or shut up” moment in U.S. history, where the U.S. engages in a catastrophic war with no promise of victory to extend Pax Americana or falls through on its promises to defend Taiwan. The United States military is not in a position to defend Taiwan, and China wants to avoid war at almost all costs. These are two factors that support the argument that a shooting war is not imminent and may not even be likely. With continued U.S. Freedom of Navigation Operations in the area and increased overt support to Taiwan, the risk of crisis or military conflict remains high, which could have catastrophic impacts on global trade and the U.S. economy. – M.S.)GEOSTRATEGIC INTSUMEGYPT’S FOOD RESERVES POSE CHALLENGES: According to Egypt’s Supply Minister, the country has between three and six months worth of rice, sugar, and vegetable oil in its food reserves, and about seven months worth of wheat. After promising over $2 billion in food aid during the G7 summit in June, the U.S. yesterday pledged another $15 million to United Nations’ efforts to deliver food to the Middle East and North Africa (MENA) and sub-Saharan Africa regions. The U.S. has already delivered $1 billion as a part of this food aid program `to Africa this year. (AC: Agriculture officials in the Middle East and North Africa are warning that acute food shortages will worsen into next year. These countries will begin to feel the effects of Russia’s invasion of Ukraine this winter and next year when they’re most dependent on this year’s harvest. – M.S.)MALI CEMENTS PLACE IN RUSSIAN ALLIANCE: Following a phone call between Russian President Vladimir Putin and Mali’s interim President Assimi Goita, the Kremlin is considering supplying the country with food, fertilizer, and fuel. (AC: Russian mercenary group Wagner has provided paramilitary support to the Malian junta government, which kicked out French support earlier this year. Russia’s potential decision to supply Mali with lifelines will come at a cost, as Mali joins the pro-Russian alliance. – M.S.)