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By Staff | Mar 25, 2016

Trader fined

Pursuant to an offer of settlement in which Andrew D. Rudich neither admitted nor denied the rule violations upon which the penalty is based, on March 9 a panel of the Chicago Mercantile Exchange found that between March 1, 2012, and July 25, 2012, Rudich traded based on non-public order information in the Lean Hogs futures market.

Specifically, the panel determined that on numerous occasions, prior to the beginning of the closing range, Rudich established a position for his personal account on the CME Globex platform based on his knowledge of the customer Market on Close orders in his possession prior to the beginning of the closing range.

Rudich then offset those positions in the pit during the closing range. The Panel concluded that Rudich thereby violated CME Rules In accordance with the settlement offer. The panel ordered Rudich to disgorge profits in the amount of $114,680, pay a fine in the amount of $25,000, and serve a one-year suspension from access to any CME Group Inc. trading floor and direct and indirect access to any electronic trading and clearing platform owned or operated by CME Group, Inc., including CME Globex.

The suspension shall run from March 11 through March 11, 2017.

Cargill’s BQA

Cargill said it will eliminate 20 percent of shared-class antibiotics from four feedyards in Texas, Kansas and Colorado, and a few others by Friona industries.

Cargill says the process is ongoing. Cargill will also increase the Beef Qualified Assurance certified feedyards that supply its cattle by 2018.

Cargill says it would be the first major beef processor to do this.

Selling data center

CME Group Inc. has agreed to sell the Chicago-area data center that houses its electronic trading platform as part of a drive to cut costs.

CyrusOne, a Texas-based company that owns more than 30 data centers worldwide, will purchase the building in Aurora, Illinois, for $130 million, according to a statement.

As part of the deal, Chicago-based CME will sign a 15-year lease for space in the 428,000-square-foot building.

The company’s electronic trading platform, known as CME Globex, will continue to be operated from the center, according to the statement.

CME sold most of the historic Chicago Board of Trade building in 2012 to a consortium of real estate companies for $151.5 million and leased back space.

Last year, the company closed most of its futures pits and consolidated the remaining options pits in Chicago into a smaller space.


Corn closed the week 2.5 cents higher.

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

Corn export sales were disappointing at 48.3 mb, near the high end of trade estimates. Annual sales are 1.18 billion bushels, or 18 percent slower than last year’s pace.

The USDA is forecasting a drop of only 11 percent.

Ahead of the March 31 planting intentions report, traders will anticipate an increase in planted acreage 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 acres.

Commercial interests have been big sellers during the latest rally, but will view major 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 after the crop is planted.

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.

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 2.75 cents higher.

Last week, private exporters announced sale of 100,000 metric tons of soybeans to an unknown destination.

Weekly soybean sales came in at 31.6 mb. The export pace of the 2015/16 marketing year now stands at 1.595 bb, or down 8 percent from last year’s pace, right in line with the current USDA forecast.

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

The monthly NOPA crush report came in above trade estimates at 146.2 mb, while the trade was estimating a crush of 138.79 mb.

This was down slightly from last month’s crush at 150.45 mb. A year ago, crush was 147 mb.

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 with 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. 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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