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Midwest Marketing Solutions
June 7, 2019

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Easterday ordered to pay up

Pursuant to an offer of settlement in which Cody Easterday neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on May 23, 2019, a Panel of the Chicago Mercantile Exchange Business Conduct Committee, found that on multiple occasions from July 5, 2017, through August 2, 2017, Easterday entered orders in Live Cattle and Feeder Cattle with reckless disregard for the adverse impact on the orderly conduct of trading.

In accordance with the settlement offer, the Panel ordered Easterday to pay a fine of $30,000 to the Exchange and to have his access to all CME Group trading floors and direct access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for a period of 20 business days.

Almas Capital and Mark Nichols to not reapply for NFA membership

NFA has ordered New Canaan, Conn. former commodity pool operator and commodity trading advisor Almas Capital Management LLC (Almas Capital) and its former sole principal and associated person Mark Nichols to both not reapply for NFA membership, in any capacity, or act as a principal of an NFA Member.

The decision, issued by an NFA Hearing Panel, is based on a Complaint issued by NFA's Business Conduct Committee (BCC), and a settlement offer submitted by Almas Capital and Nichols. The Complaint alleged that Almas Capital and Nichols failed to cooperate promptly and fully with NFA during its 2018 examination of Almas Capital.

Corn analysis

Corn closed the week $.22 3/4 higher. Last week, private exporters did not announce any private sales.

USDA reported U.S. corn exports, for the week ended 5/23/19, were 43.3 million bushels a nice rebound from the previous week's 33.1 million bushels and were above the roughly 36.5 million bushels/week in which corn exports will need to average through the end of August in order for the USDA's 2.300 billion bushel export projection to be met.

In the weekly crop progress report, U.S. corn planting advanced to only 58 percent complete versus 63 percent expected, 49 percent last week, 90 percent last year and 90 percent average.

Iowa is 76 percent seeded but Illinois is only 35 percent planted and Indiana is only 22 percent seeded.

An estimated 54.4 million acres of corn has been planted so far versus 83.4 million which would have been planted if corn planting were moving in line with average levels. Roughly 38.4 million acres of corn remains to be planted based on the USDA's March 29 Prospective Plantings report estimate.

Corn emergence is only 32 percent, up from 19 percent last week but far below the average pace of 69 percent. With lots of variables this year, marketing will be very difficult for producers. Expect lower yields and less seeded acres this summer, lowering corn ending stocks.

Strategy and outlook

With funds now going net long due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.

Soybean analysis

Soybeans closed the week $.49 1/4 higher. Last week, private exporters did not announce any private sales.

U.S. soybean exports last week of 19.6 million bushels were in line with market expectations of 16.5-23.9 million bushels. Soybean exports will need to average roughly 32.0 million bushels/week through the end of August if the USDA's 1.775 billion bushel export projection is to be met.

U.S. soybean planting is now 29 percent complete versus 31 percent expected, 19 percent last week, 74 percent last year and 66 percent average.

Iowa is only 32 percent planted with Illinois at 14 percent, Indiana at 11 percent an South Dakota only 6 percent done.

Soybean emergence is 11 percent versus 35 percent on average.

An estimated 24.4 million acres of soybeans have been planted so far versus 54.3 million which would have been planted if planting were moving in line with average levels. Roughly 60.2 million acres of soybeans remain to be planted based on the USDA's March 29 Prospective Plantings report estimate. The slow planting pace will no doubt shift some corn acres to soybeans, the last thing the soybean market needs. There will be a massive stockpile of soybeans by harvest time.

Strategy and outlook

With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.

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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