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BRIAN HOOPS

By Staff | Oct 2, 2015

CFTC

The Commodity Futures Trading Commission is looking to tweak its proposed position limits.

The change would simplify the separation of firms from subsidiaries whose trading is not controlled by their parent companies for the purposes of counting positions toward the proposed limits.

“This proposal aims to make a significant, streamlined change to the process of waiving aggregation requirements,” CFTC Chairman Timothy Massad said. “Under the proposal, instead of requiring a participant to apply for an exemption and wait to receive CFTC approval, we would instead rely on a notice filing.”

Bars McElhannon Group

National Futures Association has permanently barred the McElhannon Group Inc., an NFA member commodity trading advisor, from membership and from acting as a principal of an NFA member.

The decision, issued by NFA’s Business Conduct Committee, is based on a complaint authorized by the BCC on May 28.

The complaint also named Philip M. Worley, a principal of the McElhannon Group, as a respondent.

The BCC found that the McElhannon Group used false and misleading promotional material, claiming a rate of return of 457 percent over a 13-year period for its forex-managed account program.

In addition, the BCC found that the McElhannon Group failed to comply with the terms of NFA’s emergency enforcement action by continuing to actively solicit customers to trade forex.

The McElhannon Group’s willful refusal to cooperate with NFA during its examination prevented NFA from completing its examination.

Bars RNS Holdings LP

National Futures Association has permanently barred RNS Holdings LP, an NFA member commodity pool operator, and Raja Michael Mawad, the firm’s sole associated person and firm principal, from NFA membership.

In addition, RNS and Mawad are both barred from acting as principals of an NFA member and must transfer the balance in a trading account under their control to a restitution fund at NFA.

The decision, issued by NFA’s Business Conduct Committee, is based on a complaint authorized by the BCC on May 28.

Prior to the issuance of NFA’s complaint, NFA’s Executive Committee took an emergency action, suspending RNS and Mawad from NFA membership for misappropriating pool participant funds.

The BCC found that RNS and Mawad misappropriated approximately $180,000 from the RNS Capital LP Fund.

Specifically, beginning in 2009, Mawad used the fund to pay for personal expenses such as jewelry, travel and restaurants.

In addition, the BCC found that RNS and Mawad failed to comply with the terms of NFA’s emergency action by attempting to withdraw, without NFA authorization, $50,000 from an account under its control.

CORN ANALYSIS

Corn closed the week 11.5 cents higher.

Last week, private exporters reported sale of 487,680 metric tons of corn to Mexico.

Weekly export sales showed corn sales were 16.8 million bushels for new crop corn.

New crop sales are 146 mb, or 30 percent behind last year’s sales pace.

In the weekly crop progress and conditions report, the government said U.S. corn harvest has advanced to 10 percent complete, up 5 percent from last week, but trailing the average pace of 15 percent.

With warm and windy conditions, fields should be experiencing rapid dry down. U.S. corn conditions were unchanged at 68 percent good-to-excellent with 53 percent of the crop as rated mature.

Harvest has not started yet in the majority of growing areas, suggesting it is too early for a harvest low.

USDA was expected to issue its 2015 U.S. Small Grain Annual Report on Wednesday, and analysts noted that Sept. 1 corn stocks have exceeded the average trade guess in six of the last eight ,years including the 50 mb higher corn stocks update in 2014 and the 145 mb higher than expected corn carryover in 2013.

Strategy and outlook: Producers:

  • Are 100 percent sold of the 2014/15 crop.
  • Sold 50 percent of 2015 production and own December puts on balance of production.
  • Will exit puts when December hits $3.50.
  • Sold 20 percent of 2016 crop.

SOYBEANS ANALYSIS

Soybeans closed the week 20.25 cents higher.

Last week, private exporters announced sales totaling 553,000 metric tons of soybeans to an unknown destination and 544,400 mt of soybeans to China.

Weekly export sales of new crop soybeans were 48.4 mb.

This leaves the 2015/16 marketing year 312 mb behind last year’s pace.

This places the sales pace at 35 percent below a year ago.

According to Ag Resource, the export pace for U.S. soybeans is currently 1.45 billion bushels, well behind the current U.S. forecast.

The weekly crop progress report saw soybean conditions up 2 percent from last week to 63 percent g/e.

U.S. soybean harvest is 7 percent complete, right in line with the average pace.

USDA was expected to issue its 2015 U.S. Small Grain Annual Report on Wednesday, and analysts noted that Sept. 1 soybean stocks have exceeded the average trade guess in five of the last eight years.

Last year, USDA’s Sept. 1 soy stocks were 35 mb below trade expectations.

Weekly charts suggest soybeans find major resistance near $8.93 and will need a close above this level to indicate any technical strength.

Strategy and outlook: Producers:

  • Are sold 100 percent 2014/15 production.
  • Sold 50 percent of 2015/16 production and own November puts on balance of production.
  • Will exit puts when November hits $8.35.
  • 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. 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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