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Midwest Marketing Solutions

By Staff | Apr 26, 2019

Arrest made in farm loan scheme

A former U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) employee in Texas has been sentenced to two years in federal prison after leading a farm loan scheme that defrauded the government of more than $166,000.

Barbara Serna Salinas, 43, a former FSA loan officer in Uvalde, Texas, was sentenced on April 8 to pay $166,744.20 in restitution to USDA. In addition to Serna’s two year jail sentence, she will also serve a supervised release for a period of five years following her discharge from prison. Serna had previously plead guilty to one count of making a false statement on a loan application on June, 28, 2018.

In the guilty plea, Serna admitted to issuing multiple fraudulent loans through FSA during a period from May 2011 to June 2016. Serna was approving loans in exchange for cash or other forms of payment that were made by co-defendants, Ruben James Valadez, 44, of Uvalde, and Eric Torres Neira, 44, of San Antonio. A review of USDA loans approved by Serna after 2011 revealed that several loans were approved to Neira and Valadez that totaled more than $150,000.

Will there be aid for flood damaged stored grain?

The new Farm Bill has increased the amounts that producers can borrow through USDA’s FSA. In addition, Congress is debating a disaster aid package that would cover natural disasters that have occurred the past two years; the House version is said to include coverage for stored grain lost in recent floods.

Congress will return from recess on April 29th.

Couple pleads guilty to crop insurance and bankruptcy fraud

Michigan Farm News reported both Michael and Mellissa Stamp, of Decatur, Mich., plead guilty to charges related to crop insurance and bankruptcy fraud. The plea deals come with reduced sentences.

Without pleading “guilty” and agreeing to a deal, both were scheduled to go to trial in May. If found guilty in trial, the Stamps could have faced a maximum 30-year prison sentence. Instead, Michael Stamp now faces up to five years in prison, while Melissa could spend up to three years in jail. Court documents show Michael Stamp agreed to plead guilty to conspiring with two or more members to commit bank fraud, while providing false statements. A guilty plea for crop insurance fraud is also included in the plea deal. With the new plea, court documents show Michael faces up to five years in prison, supervised release for three years, a fine of $250,000 and will be required to pay full Mandatory Restitution.

Corn analysis

Corn closed the week $.02 1/4 lower. Last week, private exporters did not announce any export sales.

U.S. corn exports were solid at 46.5 million bushels, at the top end of market expectations and up from the previous week’s 41.8 million bushels. However, exports were again below last year’s same week exports of 62.1 million bushels.

Overall, corn exports have averaged 44.3 million bushels/week over the last four weeks, above the roughly 38.6 million/week in which they will need to average through the end of August in order to reach the USDA’s 2.300 billion bushel export projection.

Nationally, U.S. corn planting is 3 perccent complete versus 5 percent expected, up from 2 percent last week and is inline with 3 percent last year and 5 percent average.

If planting delay rally does not emerge, next best chance for a meaningful rally occurs after the crop is seeded and susceptible to adverse weather.

Strategy and outlook

Producers should use options to re-own and manage risk. Weather related rallies are selling opportunities.

Soybean analysis

Soybeans closed the week $.14 1/2 lower. Last week, private exporters announced sale of 140,000 mts of US soybeans to an unknown destination and 105,000 mts of meal to Columbia.

U.S. soybean exports were only 16.9 million bushels, at the extreme bottom end of expectations, down from the previous week’s 32.7 million bushels but in line with last year’s exports this week of 16.4 million bushels. More importantly, this week’s exports were a 2018/19 marketing year low and significantly below the roughly 32.0 million bushels/week in which they will need to average through the end of August in order to reach the USDA’s export projection.

The NOPA crush report saw its members crush 170.0 million bushels of soybeans in March, slightly above average market expectations of 168.0 million bushels, but within the overall range of ideas of 155.0-171.4 million bushels. More importantly, March NOPA crush was slightly below last year’s same-month crush of 171.9 million bushels. NOPA reported its members produced 2.000 billion pounds of soybean oil in March vs 1.807 billion in February and 1.977 billion pounds last year March. The average soybean oil yield for NOPA members in March rose to an impressive 11.76 pounds/bushel from 11.69 in February, a high for the 2018/19 marketing year so far and remains substantially better than last year’s 11.51 pounds/bushel in March.

Strategy and outlook

Producers should use options to re-own and manage risk. Weather related rallies are selling opportunities.

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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