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By Staff | Oct 8, 2018

Kooima, Kaemingk and K&K fined

The CME Group announced that in accordance with the settlement offer, the Panel of Business Conduct ordered Kooima, Kaemingk and K&K to jointly and severally pay to the Exchange a fine of $1,250,000. The Panel also ordered Kooima, Kaemingk and K&K to jointly and severally pay restitution of $8,700,000 as detailed in the CFTC Order in its related matter. The $8,700,000 in restitution is in addition to the more than $2,000,000 that K&K has already paid to affected customers. The panel also barred Kooima from accessing any CME Group Inc. trading floor, and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including Globex, for 4 months beginning on the effective date.

EPA offers insight into small refinery exemptions

The Environmental Protection Agency has pulled back the curtain and offered more insight into its small refinery exemptions. In 2016 and 2017, the EPA granted 49 waivers to the Renewable Fuel Standard, totaling 2.25 billion gallons of biofuels. The corn and ethanol industries have called for greater transparency in this program. In addition to the volume announcement, the agriculture and biofuels industry would now like to know which refineries were granted RFS exemptions.

CFTC issues order against Geneva Trading USA, LLC

The Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against Geneva Trading USA, LLC(Geneva), a proprietary trading firm in Chicago, Illinois, for engaging in the disruptive trading practice of “spoofing.” The order finds that Geneva engaged in this activity through three of its employees identified in the order as Trader A, Trader B, and Trader C. The order requires Geneva to pay a $1.5 million civil monetary penalty and to cease and desist from violating the Commodity Exchange Act’s prohibition against spoofing.

Iowa makes top five list of states of high payouts for cash rent

For 2018, the national average for cash rents on cropland is $138 per acre, which is 1.5 percent higher than 2017 prices. The national average for irrigated cropland is $215 per acre, which is $3 per acre higher than 2017. Pastureland rent is flat, averaging $12.50 per acre. California tops the list for the highest cropland cash rent and is the only state with prices more than $300 per acre. Arizona, Iowa, Illinois and Washington round out the top five list with cash rent rates ranging between $203 and $253 per acre. Montana, Oklahoma, Texas, West Virginia and South Carolina have the lowest state-average cash rents-all less than $50 per acre.

Corn analysis

Corn closed the week $.01 1/4 lower. Last week, private exporters a sale of 239,630 mts sold to Mexico.

In the weekly export sales report, USDA reported 67.4 mb (1,712,800 mt) of corn export sales for 2018-19 and a net cancellation of 400,000 bushels (9,700 mt) for 2019-20, which was last week’s amount. In 2018-19, there are 719 million bushels of total commitments, up 61 percent from a year ago.

The weekly crop progress and conditions report saw corn harvest advance to 16 percent complete, up from 9 percent last week and versus 10 percent a year ago and 11 percent on average.

U.S. corn crop conditions came in at 69 percent good/excellent versus 68 percent expected, 68 percent last week and 61 percent last year. In the weekly EIA report, U.S. ethanol production fell to 1.036 million barrels/day (305 million gallons/week) from 1.051 mbpd (309 mil gal/week) the week prior and was the 2nd lowest production rate of the last 11 weeks. Crude oil stocks saw an unexpected build of 1.85 mb versus an expected decline of 1.3 mb. The October 11 USDA supply/demand report now is expected to show a production figure similar to slightly larger than last month, but ending stocks should be larger than last month due to the USDA showing larger than expected quarterly stocks.

Strategy and outlook

Plan on storing as much crop as possible this fall and look for higher prices next summer.

Soybeans analysis

Soybeans closed the week $.05 1/2 lower. Last week, private exporters announced 162,000 mts of soybeans sold to an unknown destination and 671,934 mts of beans sold to Mexico.

USDA reported 32.0 mb (870,700 mt) of weekly soybean export sales for 2018-19 and 100,000 bushels (1,500 mt) for 2019-20. There are 691 mb of total commitments, down 16 percent from a year ago. In the weekly crop progress and conditions report, soybean harvest advanced to 14 percent complete versus 6 percent a week ago and slightly more than 9 percent last year and the average pace of 8 percent. U.S. soybean crop conditions improved 1 percent to 68 percent good/excellent versus 67 percent expected, 67 percent last week and 60 percent last year.

Quarterly soybean stockpiles are similar to last year’s levels at 151 mb this year versus 138 mb last year. This month’s supply/demand report should leave production figures as well as ending stocks nearly unchanged to slightly larger compared to a month ago. Production could increase, but demand, due to exports, should also increase, resulting in a flat ending stocks figure. Unless dryness develops in South America, producers should anticipate very choppy trade with large supplies capping rallies as well as the lack of progress with China.

Strategy and outlook

Plan on storing as much crop as possible this fall and look for higher prices next summer.

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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