South Dakota man charged in a series of crimes

A man from South Dakota is alleged to have illegally sold cattle and alfalfa hay during a series of crimes that spanned two and a half years. According to court documents, Tyler Remily, 33, from Frankfort, was arrested on Nov. 7 after being charged with embezzlement of property received in trust, grand theft and disposal of personal property subject to security interest. All of these charges are felonies. The embezzlement charge for Remily was the result of illegally selling 50 head of cattle belonging to Francis Heer of Doland on Nov. 4, 2015. Remily is alleged to have kept the money with the intent of defrauding Heer. Two months later according to paperwork Remily took $15,000 from Heer resulting in the grand theft charge. The disposal of personal property occurred when Remily allegedly sold alfalfa hay on March 28, 2017, that had been mortgaged by the Heartland State Bank.

China pledges to buy U.S. goods -will need to drop tariffs first

(Reuters) – China will need to drop its steep tariffs imposed on a range of American farm products earlier this year before it can fulfill its pledge to buy a “very substantial” amount of U.S. goods, said Chinese traders. China and the United States agreed last Saturday to refrain from setting additional tariffs that would further escalate a months-long trade war that has roiled global markets and halted sales of American soybeans to the world’s top buyer.

The temporary truce on trade followed talks between U.S. President Donald Trump and Chinese President Xi Jinping at the end of a two-day gathering of world leaders in Argentina. The United States said that Beijing had promised to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, with purchases of farm goods to start “immediately”. But no substantial purchases can happen with a 25 percent duty still in place on U.S. soybeans, corn, sorghum and wheat, said buyers and analysts.

November is a good month at MGEX

MGEX reported November 2018 as the second best November in Exchange history with a total exchange volume of 246,638 contracts. In addition, this past month is recorded as the 13th best month of all-time at MGEX. A total volume of 207,169 contracts were traded electronically in November, which makes it the 14th best electronic month in history at the Exchange. Options volume for the month was 5,820 contracts. Open interest as was reported at 69,998 contracts.

Hennessey surrenders

Jerry Hennessey disappeared in early September. The former grain elevator manager at the Ashby Farmers Cooperative Elevator Co. in west-central Minnesota, allegedly pocketed around $5.5 million from the company. He used the money for hunting trips, home construction projects, land purchases, taxidermy and paying his personal Cabela’s credit card. On Dec. 4, he surrendered to authorities and appeared in U.S. District Court in Minneapolis, where he was charged with mail fraud. Hennessey, 56, managed the cooperative since 1988. Initial investigations show Hennessey siphoned off funds while inflating grain inventories from the single-location grain co-op for the past 15 years.

Corn analysis

Corn closed the week $.08 1/2 higher. Last week, private exporters announced sale of 198,120 mts of corn to Mexico.

In the weekly export sales report; for the week ending November 29, USDA reported 46.4 mb of corn export sales for 2018-19 and none for 2019-20.

Total commitments of 1.053 billion bushels in 2018-19 are up 17 percent from a year ago. In the weekly EIA report, crude oil stocks showed a drawdown of 7.3 mb, much more than the expected 2 mb drawdown. Ethanol production increased to 1,069k bpd versus 1,048k the prior week, a 13 week high. Demand needs improve for corn to have any chance of a meaningful rally. The U.S. window for opportunity to export corn ends in the spring with a larger Ukraine and South America corn crop competing for world market share.

Strategy and outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk. Don’t store unpriced crop.

Soybeans analysis

Soybeans closed the week $.22 3/4 higher. Last week, private exporters announced sales of 147,500 mts of soybeans to an unknown destination.

In the weekly export sales report, U.S. soybean sales last week were respectable at 32.7 million bushels, which were at the extreme top end of market expectations and up from the previous week’s 23.1 million bushels and actually were the best in 9 weeks. However, once again this week’s sales were dwarfed by last year’s same-week sales of 71.6 million bushels.

Total commitments of 887 million bushels now down 33.4 percent from last year’s 1.333 billion bushels at this time. Celeres estimated Brazil’s bean crop could reach 123-130 mmts versus 120.5 mmts, last month’s USDA estimate.

The agreement with China is nothing more than a truce to not increase tariffs for the next 90 days. In the next 90 days or so, China will be able to buy South American corn or soybeans, making this period a key for U.S. demand. According to Ag Secretary Sunny Perdue, don’t expect China to start purchasing U.S. products until around January 1.

Strategy and outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk. Don’t store unpriced crops.

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.