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By Staff | Mar 8, 2016

Trading ban

A husband and wife have been banned for life from CME Group Inc. markets for using noncompetitive cattle trades to improperly transfer funds, according to disciplinary notices issued.

Aaron Wilkey and his wife, Melissa, electronically executed numerous noncompetitive transactions in CME’s feeder cattle futures from December 2012 to April 2013, the notices said.

CME, which owns the Chicago Mercantile Exchange and other markets, bars the practice.

The Wilkeys could not immediately be reached for comment.

A CME panel found that the Wilkeys had committed the violations after they did not answer the charges against them. They transferred money to an account controlled by Melissa Wilkey from accounts controlled by Aaron Wilkey, according to CME.

Separately, Aaron Wilkey improperly prearranged trades to transfer money to his wife’s account from his mother’s account, the company said.

Aaron and Melissa Wilkey have each been ordered to pay a $100,000 fine to CME, along with restitution and disgorgement for the improper trades.

MGEX trades

MGEX reported a total volume of 247,562 trades from February, making it the fourth best month in the history of the Exchange. This is also the highest February volume total of all-time, up 11 percent from the previous record set in 2011.

Electronic volume for the month also finished at fourth best all-time and set a new February record, coming in at 218,598 contracts traded.

The month of February concluded with 14 consecutive days of volume greater than 10,000. The highest open interest total ever for the Exchange was seen during February, when it reached 87,186 on Feb. 12.

Total volume through two months now stands at 403,395, which is 3 percent higher than at this time a year ago.


Corn closed the week 1.5 cents lower.

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

Corn export sales were disappointing at 43.2 mb, near the high end of trade estimates. Annual sales are 1.09 billions bushels, or 21 percent slower than last year’s pace.

Sales look to be much slower next week as there has been very little private business this week.

In March, we should expect traders to anticipate an increase in planted acreage in the March 31 report of 2 to 3 million acres. Forecasts for a cool, wet spring could make planting additional corn acres difficult, thus corn could find strength in the last half of March and early April as the market will need to secure.

Commercial interests will view pullbacks in the market as buying opportunities with forecasts for a cool, wet spring possibly giving way to a La Nina event this summer.

Thus commercial entities as well as large speculators will want to be long ahead of the growing season.

With the already saturated soils and additional rain forecasted this spring, spring highs for corn are likely to be scored during the spring planting timeframe as values rally to secure enough planted acres to meet demand.

No year is the same, but last year, prices ground lower into early June until weather issues rallied prices. Without a weather problem, prices look to search for a price level which will stimulate usage.

Additional downside should be expected until a weather problem develops this spring or summer as supplies remain large.

Strategy and outlook: Producers should use a rally during the spring planting timeframe to liquidate remaining inventory and begin to become defensive on new crop corn sales.


Soybeans closed the week 14.5 cents higher.

Last week, private exporters announced sale of 140,000 metric tons of soybeans to an unknown destination.

Weekly soybean sales came in at 16.3 million bushels, the fourth slowest pace of the marketing year.

The export pace of the 2015/16 marketing year now stands at 1.557 bb, or down 11 percent from last year’s pace.

The key pod-setting stage in South America should be completed by March 15, leaving the market to remove any weather premium that may remain in values.

The next monthly USDA supply/demand report, that was scheduled for Wednesday, should show very little change in U.S. ending stocks.

And with the South American growing season effectively over, plus a small increase in U.S. seeded acres in 2016, look for prices to work lower after the report.

In the March 31 acreage report, the trade should be expecting an increase in U.S. soybean seedings of 500,000 to 1 million acres.

If wet growing conditions materialize this spring as forecast, corn will rally to buy acres as the market anticipates farmers will shift corn acres to soybeans.

A very wet forecast will limit the upside for soybeans. Like corn, technical breaks should be well supported by commercial entities as they begin to position long ahead of the growing season as they wish to extend coverage in case prices rally sharply on a weather-related event.

Strategy and outlook: Producers should use a rally during the spring planting timeframe to liquidate remaining inventory and begin to become defensive on new crop soybean sales.

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.

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

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