JBS USA cited

JBS USA must pay a $50,000 civil penalty and pay restitution to cattle producers after its Grand Island, Nebraska plant was cited for not accurately tracking weights, grades and prices for cattle sellers. A computer software change was apparently made. As a result, some cattle producers were overpaid and others were underpaid in late 2017 and early 2018. JBS says less than 40 producers were negatively impacted.

Trump nominated

President Trump has nominated Heath Tarbert to be a commissioner and chairman of the Commodity Futures Trading Commission. Tarbert is now the assistant secretary for international markets in the Treasury Department.

Marex Spectron acquires new business

(Reuters) – Commodities broker Marex Spectron said last Thursday it had signed an agreement to acquire the customer business of Chicago-based Rosenthal Collins Group LLC (RCG). Terms of the deal, which is expected to close in January 2019, were not disclosed. RCG, which has a particular expertise in grains and livestock, has 14,000 client accounts and balances and 150 associated staff.

NFA takes action

NFA has taken an emergency enforcement action against Beverstone Fund Management (Beverstone), an NFA Member commodity pool operator and commodity trading advisor located in Georgetown, Cayman Islands, and its principal and sole associated person Roland Kaehler. This action was taken to protect pool participants and customers because of Beverstone and Kaehler’s failure to cooperate with NFA. Due to Beverstone and Kaehler’s lack of cooperation, NFA, among other things, is unable to substantiate Kaehler’s interests in two pools operated by Beverstone, the purported valuations of his interests, and the pools’ interests in a certain asset and its purported valuation. In addition, NFA is concerned that Beverstone and Kaehler provided misleading information to pool participants, and may have withdrawn funds in incentive fees from two pools that they cannot demonstrate they were entitled to.

Corn analysis

Corn closed the week $.00 1/2 lower. Last week, private exporters announced sale of 125,00 mts of corn to Japan and 1,645,920 mts of corn to Mexico.

In the weekly export sales report; for the week ending December 13, USDA reported 77.7 mb (1,974,400 mt) of corn export sales for 2018-19 and 21.4 mb (542,600 mt) for 2019-20.

Total commitments of 1.166 billion bushels in 2018-19 are up 17 percent from a year ago. In the weekly EIA report, crude oil stocks saw a drawdown of 500,000 barrels vs. an expected drawdown of 2.5 million barrels. Ethanol production averaged 1,046,000 bpd, unchanged from the prior week. Ethanol stocks increased to 23,873,000 barrels, the 5th largest weekly total in history.

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 $.16 lower. Last week, private exporters announced sales of 365,00 mts of soybeans to an unknown destination; 130,632 mts of soybeans to Mexico and 1,430,000 mts of soybeans to China.

In the weekly export sales report, the USDA reported 104.2 mb (2,835,600 mt) of weekly soybean export sales for 2018-19 and 4.7 bushels (127,800 mt) for 2019-20. Total commitments of 1.012 bb in 2018-19 are down 30 percent from a year ago.

The NOPA crush report is slightly lower than expectations at 166.959 mb vs. estimates of 168.4 mb. This is also lower than a month ago levels of 172.3 mb but much larger than last year’s 163.5 mb and record large for the month of November.

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.