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BRIAN HOOPS

By Staff | Jul 17, 2015

Jon Corzine and other former MF Global Holdings Ltd officials have reached a $64.5 million settlement of litigation brought by investors seeking to hold them liable for the now-defunct futures brokerage’s 2011 bankruptcy.

The preliminary all-cash settlement with Corzine, who was MF Global’s chief executive and previously New Jersey’s governor, and nine other defendants resolves the last major piece of litigation by MF Global stock, bond and convertible bond investors over the company’s rapid descent into Chapter 11.

The class action accord would boost the investors’ recovery to $204.4 million, including $74.9 million from underwriters and $65 million from the auditor Pricewaterhouse Coopers.

Investors led by the Virginia Retirement System and the Canadian province of Alberta accused MF Global officials of inflating the company’s ability to manage risk, obscuring risks from Corzine’s $6.3 billion bet on European sovereign debt and improperly accounting for deferred tax assets.

Thousands of former brokerage customers have recouped the $6.7 billion that a court-appointed trustee said they were owed. MF Global settled related CFTC claims for $100 million.

CORN ANALYSIS

Corn closed the week 7 cents higher.

Last week, private exporters did not report any private sales.

Weekly export sales showed old crop corn sales 21.1 million bushels and new crop sales at 5.9 mb.

In the weekly crop progress and conditions report, the USDA reported corn conditions at 69 percent good-to-excellent as of July 5, unexpectedly up 1 percent from last week’s 68 percent. The trade was looking for a decline of 1 percent to 2 percent.

Missouri and Minnesota were each up 3 percent, while Illinois and Iowa each fell 1 percent.

In the monthly supply/demand report, USDA chose to leave yield forecasts unchanged at 166.8 bpa, lowering production to 13.5 billion bushels. While this is down from last year’s record crop of 14.216 bb, ending stocks were lowered to a more manageable 1.6 bb.

Remember at one time last year, stocks were forecast at 2.4 bb before being trimmed to 1.779 bb.

A stocks figure of this level fairly represents the $4 in corn, as the downside risk this year looks to be $3.25 to $3.50.

Things could get interesting this summer if the 166.8 bpa yield is lowered due to declining crop conditions. A loss of 5 bushels per acre is equivalent to approximately 400 mb of ending stocks and would warrant a move to at least $5.

Corn has major resistance on the weekly charts at $4.47 and a gap on the weekly charts at $4.57.

Strategy and outlook: Producers are 100 percent sold of the 2014/15 crop, re-owned 50 percent with September calls. Sold 50 percent of 2015 production and own December puts on balance of production. Sold 20 percent of 2016 crop.

SOYBEANS ANALYSIS

Soybeans closed the week 6.25 cents lower.

Last week, private exporters reported sales totaling 376,000 metric tons to an unknown destination.

Weekly export sales of soybeans were 1.5 mb old crop and 7.4 mb for new crop sales.

The weekly crop progress report showed soybean conditions in the g/e category unchanged for the week at 63 percent g/e.

The trade was looking for a small decline of 1 percent to 2 percent.

Ninety-six percent of the bean crop is planted with 93 percent emerged. Missouri is 73 percent planted, meaning 1.5 million acres is unplanted in that state alone.

Twenty-one percent of the crop is blooming, right on the average for the week.

In the monthly supply/demand report, USDA did not make many changes, in fact, it left the yield forecast unchanged from the previous month at 46 bpa with a production forecast of

3.885 bb. This would be down from last year’s 3.696 bb with a carryover endings figure of 425 mb.

This carryover number is well above last year’s 255 mb. If this figure is realized, producers are going to wish they were more proactive at the $10.30 level as a carryover stocks figure above 400 mb equates to $9 beans.

Major weekly resistance occurs at $10.38 1/2.

Strategy and outlook: Producers are sold 100 percent of 2014/15 production and sold 50 percent of 2015/16 production and own November puts on balance of production. Sold 20 percent of 2016 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. Brian Hoops can be reached at (605) 660-1155.

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