Omaha, Nebraska-based AG Processing Inc., a cooperative, has been slapped with a $400,000 penalty by the Commodity Futures Trading Commission (CFTC) for violating federal position limits on soybean meal futures contracts. The CFTC issued an order simultaneously filing and settling charges against the company on January 28, 2021.
The investigation revealed that between December 2017 and July 2019, AGP exceeded the CFTC’s all-months speculative position limits for soybean meal futures traded on the Chicago Board of Trade (CBOT). AGP purchases large quantities of soybeans and processes them into soybean meal and crude soybean oil. To mitigate risk associated with this process, the company took positions in CBOT soybean meal futures contracts.
While AGP obtained exemptions from the Chicago Mercantile Exchange (CME) allowing it to exceed CME’s position limits, the company failed to secure authorization from the CFTC to surpass federal position limits. AGP diligently filed the required Form 204 reports and remained within its CME-approved exemptions, but never applied for, nor received, CFTC approval to exceed the limits set by the commission itself. This resulted in multiple violations of the CFTC’s all-months position limit for soybean meal futures.
The order mandates that AGP cease and desist from any further violations of Section 4a(b)(2) of the Commodity Exchange Act and CFTC Regulation 150.2. The case was led by CFTC Division of Enforcement staff members Steven Kim, James H. Holl III, Erica Bodin, Matthew Hunter, Kelly Beck, Janet Briner, and Rick Glaser.
Source: CFTC.gov
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