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BRIAN HOOPS

By Staff | Dec 19, 2014

The U.S. Commodity Futures Trading Commission reported it obtained a record $3.27 billion in monetary sanctions in 2014, imposed against companies and individuals.

The CFTC filed 67 new enforcement actions while continuing to devote significant resources to litigating a host of complex cases filed in prior years.

A number of those litigations reached successful resolutions in 2014, either through settlement, the granting of summary judgment, or a finding of liability after trial.

“The CFTC is committed to aggressive enforcement and policing of our financial markets,” said Timothy Massad, chairman of the CFTC. “Through the outstanding work of enforcement staff, the CFTC sends the message that the protection of customers and the integrity of the markets are paramount.

“The $3.27 billion in sanctions includes more than $1.8 billion in civil monetary penalties and more than $1.4 billion in restitution and disgorgement.

“This brings the Commission’s total monetary sanctions over the past two fiscal years to more than $5 billion, which is more than the total sanctions imposed during the prior 10 fiscal years combined.”

2014’s civil monetary penalties total, Massad said, is more than eight times the Commission’s operating budget.

CORNANALYSIS

Corn closed the week 10.5 cents higher.

Last week, private exporters reported sales of 188,976 metric tons of corn to an unknown destination and 136,000 mt of U.S. corn to Japan.

Weekly export sales of corn showed sales of 37.9 million bushels. Annual corn sales stand at 933.5 mb, 72 mb less than a year ago.

As expected, the USDA supply/demand report lent little fundamental direction to prices, with no production adjustmen.

The USDA increased demand forecasts by 10 mb in the food/industrial usage category. No export changes were made, despite the slower pace compared to a year ago.

With the report out of the way, trade focus should return to the market trying to pry corn out of farmers hands by narrowing the basis.

The narrow basis should occur until after the first of the year when producers will be more willing to sell product due to tax reasons.

A trading range is expected to continue to dominate trade through the winter doldrums until spring planting season begins.

Strategy and outlook: Producers are 100 percent sold of the 2014/15 crop. They sold 10 percent of 2015 production. They should sell another 15 percent at $4.50 December.

SOYBEANS ANALYSIS

Soybeans closed the week 9.25 cents higher. Last week, private exporters announced sales of 130,000 mt of soybeans to Spain and 110,000 mt to an unknown destination.

Weekly export sales of soybeans showed sales of 29.8 mb.

Annual soybean sales are 1.486 billion bushels, 67.4 mb more than a year ago.

In the monthly supply/demand report, USDA raised U.S. soybean exports to a record large 1.76 bb (up 40 mb, which cut 2014/15 soybean ending stocks to 410 mb.

USDA did not alter its crush estimate which currently rests at 1.76 bb. As a result, U.S. soybean ending stocks are still the largest of the past six years, but not as burdensome as just a couple of months ago.

While the cut in stocks is productive, the question is how long will it last with a record crop being projected in Brazil?

CONAB projected Brazil soybean production at 95.8 mt, a record large amount, and 5 mt larger than previously thought.

During January and February is when prices can see large swings based on South American production. A record crop should result in softer U.S. prices as China and other world buyers will switch purchases to cheaper South American soybeans.

Strategy and outlook: Producers are 100 percent sold of 2014/15 production. They sold 10 percent of 2015 production and should sell another 15 percent at $10.95 November.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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