U.S. farmers will plant less corn and soybean land than expected this year, despite a surge in commodity prices, suggesting that tighter grain supplies will persist into 2022, said the USDA on Wednesday. Although with normal weather and yields, the corn and soybean harvests could be the second largest ever, they will not be quite as large as projected by traders and the government.
Along with corn and soybeans, U.S. wheat prices reached a record high in 2013, just before the collapse of the commodity boom. The USDA projects that this year's wheat crop will end the four-year decline in prices, partly because the harvest will be nearly one-half billion bushels smaller than a year ago.
Traders believe U.S. farmers are stampeding into soybeans this year and are looking for confirmation at USDA's two-day Agricultural Outlook Forum, which opens this morning with speeches by President Trump's nominee for U.S. ambassador to China and the House Agriculture chairman, Michael Conaway of Texas. This is the first time since 1995 that the secretary of agriculture will not speak at the forum.
Former New Jersey Gov. Jon Corzine will pay a $5 million civil penalty for misuse of $1 billion in customers' funds during the 2011 collapse of MF Global, which shook the futures market. Corzine, who was chief executive of the trading house, also agreed in a consent order in federal court to never again work for a futures brokerage or to register with the CFTC.
The federal overseer of the futures markets, the Commodity Futures Trading Commission, re-proposed limits on speculative futures and swaps by investors in 25 physical commodities ranging from corn and soybeans to natural gas, crude oil and precious metals. The CFTC also re-proposed a definition of bonafide hedging — important to food processors, utilities and airlines, who use futures to assure the price and supply of materials.
CME Group, the operator of futures markets in Chicago and New York, said it will close most of its open outcry futures trading pits by July 2.
U.S. District Judge Linda Reade ordered U.S. Bank to pay $18 million to the trustee for Peregrine Financial Group as reimbursement to customers of the bankrupt company, says the CFTC.
CFTC chairman Timothy Massad said his agency, the regulator of futures exchanges, would focus on threats of cyber attacks on the derivatives industry, said Reuters, which quoted him as telling the Senate Agriculture Committee, "The risk is apparent."
Texas Republican Mike Conaway, the incoming chairman of the House Agriculture Committee, said he expects "vigorous oversight" of federal programs from crop insurance and food stamps to farm subsidies and the futures markets in the new session of Congress. Conaway redrew the jurisdiction of the Agriculture subcommittees and said, "All six subcommittees will be expected to carry out vigorous oversight of their mission areas." At present, there are five subcommittees.