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Midwest Marketing Solutions
September 26, 2019

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Charges settled

The U.S. Commodity Futures Trading Commission issued an order filing and simultaneously settling charges against Nathan Harris, a CFTC registrant, of Akron, Iowa, for fraud, unauthorized trading, and violating speculative position limits in live cattle futures contracts. The order imposes a civil monetary penalty of $1,250,000 and permanent restrictions on Harris's registration with the CFTC. As noted in the order, between January 2012 and August 2014, Harris engaged in fraud and unauthorized trading by exceeding certain customers' instructions concerning the size and risk of positions, failing to obtain specific authorization from certain customers for particular trades, and failing to obtain signed powers of attorney from certain customers. Harris's unauthorized trading resulted in approximately $10.3 million in customer losses. Through Harris's unauthorized trading in one customer's account, he also exceeded CME's live cattle spot-month limit.

Systra LLC barred

NFA has permanently barred Systra LLC (Systra), an NFA Member commodity trading advisor located in Chicago, Ill., and its sole principal and associated person Robert H. Kopp from membership and from acting as a principal of an NFA Member. The Decision, issued by NFA's Business Conduct Committee (BCC), is based on a Complaint issued by the BCC. The BCC found that Systra and Kopp provided false information to NFA concerning Kopp's trading activities on behalf of a pool managed by Systra. The BCC also found that Systra and Kopp failed to cooperate with NFA in its May 2019 examination of Systra by failing to produce documents requested by NFA and failing to make Kopp available for questioning by NFA.

Corn analysis

Corn closed the week $.01 3/4 higher. Last week, private exporters did not announce any private sales.

In the weekly export inspections report; U.S. corn exports last week were only 16.6 million bushels and were considerably below last year's same-week exports of 41.2 million bushels.

Through nearly two weeks of the 2019/20 marketing year, cumulative exports of 35.2 million bushels are nearly half of last year's 67.9 million at this time.

Based on the USDA's 2.050 billion bushel export projection for 2019/20, corn exports will need to average roughly 37.2 million bushels/week throughout the marketing year vs last year's 35.6 million/week.

In the weekly crop progress and conditions report, U.S. corn conditions were unchanged at 55 percent good/excellent versus 54 percent expected, 55 percent last week and 68 percent last year.

U.S. corn harvest is 4 percent complete versus 4 percent expected, 8 percent last year and 7 percent average. Corn maturity remains a concern at 18 percent versus 39 percent on average.

68 percent is dented while 93 percent is in the dough stage.

Strategy and outlook

A bullish technical weekly reversal suggests the lows are in for the fall.

Soybeans analysis

Soybeans closed the week $.16 lower. Last week, private exporters did not announce any private sales.

In the weekly export inspections report, U.S. soybean exports, for the week ended 9/12/19, were 24.5 million bushels and were the lowest in eight weeks. Through the first near two weeks of the 2019/20 marketing year, cumulative exports of 45.6 million bushels compare to 59.6 million last year.

Accordingly, in order to reach the USDA's 1.775 billion bushel export projection, soybean exports will need to average roughly 33.5 million bushels/week over the course of the year vs last year's 32.2 million/week.

In the weekly crop progress report; U.S. soybean conditions were down 1 percent to 54 percent good/excellent versus 54 percent expected, 55 percent last week and 67 percent last year. 15 percent is dropping leaves and 95 percent is setting pods.

That means there are 3.6 million acres of soybeans that have not yet set a pod. In the monthly NOPA crush report, NOPA reported its members crushed 168.1 million bushels in August, sharply above the average market expectation of 162.0 million bushels and unchanged from July crush and well above last year's 158.1 mb. August NOPA crush smashed last year's previous record for the month and was the largest August crush in history. It was also the 7th largest month of all time.

Stragegy and outlook

October meetings would be the perfect time for the U.S. and China to reach a trade agreement. A bullish technical weekly reversal suggests the lows are in for the fall.

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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