National Futures Associtation (NFA) announced that it has taken an emergency enforcement action against Golden Point Capital Management LLC (Golden Point), an NFA Member commodity pool operator and commodity trading advisor located in Chicago, Ill., and its sole principal and associated person Glenn Graham.

This action was taken to protect pool participants and customers because of Golden Point and Graham’s failure to cooperate with NFA.

Due to Golden Point and Graham’s lack of cooperation, NFA is unable to determine if the funds Graham withdrew from the pool operated by Golden Point and sent to either himself, Golden Point or family members were legitimate redemptions.

Effective immediately, Golden Point and Graham are suspended from NFA membership and are prohibited from disbursing or transferring any funds without NFA’s prior approval. The action will remain in effect until Golden Point and Graham have demonstrated to NFA’s satisfaction that they are in complete compliance with all NFA requirements.

House passes farm bill

The House farm bill passed with a razor-thin two-vote margin. Four members, two Republicans and two Democrats, did not vote. If those members showed up, it could have changed the outcome. The farm bill failed when it came to the floor in mid-May with members of the Freedom Caucus voting against it to leverage action on immigration. Ten Republicans who voted no last month, supported the farm bill in this go-round. Twenty Republicans and all of Democrats voted against it.

Plans to reorganize the government

The Trump Administration has released details on its plan to reorganize government. If realized, USDA would see big changes. The proposal would shift government nutrition programs to Health and Human Services. It would shift housing loan guarantees to Housing and Urban Development. The Fish and Wildlife Service would be moved into the Department of the Interior.

A new federal food safety agency would also be created, combining programs done at USDA, FDA and HHS into one agency overseen by the Agriculture Department.

The proposal was widely praised within the Administration but is being criticized in Congress.

Corruption charges

Federal prosecutors in Brazil charged JBS SA former Chairman Joesley Batista, and two others with corruption. The charges were filed against Batista, Francisco Assis a former JBS executive, and Marcello Miller, a former federal prosecutor, before a federal court in Brasilia.

Batista and Assis had been exempted from prosecution for confessing to bribery and agreeing to cooperate with authorities in a plea deal signed last year. The charges, which are under seal, accuse Miller of being paid 700,000 reais ($185,415) by Batista to help him and Assis reach plea deals while Miller was still a federal prosecutor. The testimony of Batista and other JBS executives included allegations that they bribed nearly 2,000 politicians at all levels of government in the past decade -including President Michel Temer. Temer faced corruption charges, but they were blocked from going to trial by Brazil’s Congress late last year.

Corn analysis

Corn closed the week $.06 3/4 lower. Last week, private exporters did not announce any private sales.

Weekly export sales of corn totaled 58.5 mb (1,486,700 mt) as of June 21 with 33.5 mb (849,900 mt) for the 2017-18 season. Total shipments plus outstanding sales in 2017-18 are now 2.254 bb, 3 percent above the previous marketing year. In the weekly crop progress report, NASS reported U.S. corn crop conditions at 77 percent good/excellent versus 77 percent expected, 78 percent last week and 67 percent last year.

This is one of the highest ratings in history.

In the weekly EIA report; ethanol production increased by 8,000 bpd and is currently at 1,072,000 bpd. Ethanol inventories increased by .1 million this week, and now stand at 21.7 million bbls. Crude oil stocks saw a weekly drawdown of 9.89 mb versus expectations of drawdown of 2.2 mb. In the quarterly stocks and acreage report, the USDA pegged 2018 corn acres at 89.128 million, above trade estimates and March intentions, but below the 2018-19 soybean acreage number (the first time corn acres were below bean acres since 1983). June 1 grain stocks were reported at 5.306 billion bushels, slightly above the average trade estimate.

Strategy and outlook

Producers should have either made sales or bought puts to establish a price floor. Hold these options or roll them down and re-own sales with cheap out of the money calls.

Soybeans analysis

Soybeans closed the week $.38 1/2 lower. Last week, private exporters announced sales of 186,000 mts of soybeans to an unknown destination and 130,362 mts of soybeans to Mexico.

Weekly export sales of soybeans totaled 36.8 mb (1,000,800 mt) with 13.2 mb (358,500 mt) for the 2017-18 marketing year. Total shipments plus outstanding sales are now 2.087 bb, 4 percent less than a year ago.

In the weekly crop progress and conditions report, U.S. soybean crop conditions are 73 percent good/excellent versus 73 percent expected, 73 percent last week and 66 percent last year.

In the quarterly stocks and acreage report, the USDA reported 2018 soybean acres at 89.5 million, versus 88.982 million in March.

This is the first time the U.S. will have had more acres of soybeans than corn in many years. Quarterly stocks of soybeans as of June 1 were at 1.222 billion bushels, in line with trade estimates but above the 966 mb of stocks reported last year.

Strategy and outlook

Producers should have either made sales or bought puts to establish a price floor. Hold these options or roll them down and re-own sales with cheap out of the money calls.

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.