The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against an Omaha, Nebraska-based company that refers to itself as AG Processing Inc a cooperative (AGP) for exceeding the CFTC’s all-months speculative position limits for soybean meal futures contracts traded on the Chicago Board of Trade (CBOT). The order requires AGP to pay a $400,000 civil monetary penalty.
In addition to imposing a $400,000 civil monetary penalty, the order requires AGP to cease and desist from further violations of Section 4a(b)(2) of the Commodity Exchange Act and CFTC Regulation 150.2, as charged.
According to the order, from about December 2017 to at least July 2019, AGP purchased large volumes of local soybeans. AGP then utilized a process called crushing to process their purchased goods into soybean meal and crude soybean oil. In order to hedge its risk as a soybean crusher, AGP, among other things, took positions in the CBOT soybean meal futures contract that exceeded the CFTC’s speculative position limit as well as AGP’s fixed price cash positions for such contracts as reflected in its Form 204s filed with the Commission. AGP applied for and received exemptions from CME that permitted AGP to exceed CME’s position limits, as set forth in Rule 559 of the CBOT Rulebook. AGP filed timely Form 204s and traded within its CME-granted exemptions, but at no point did AGP either seek or receive authorization from the CFTC to exceed federal position limits. As a result, AGP violated the CFTC’s all-months position limit for the soybean meal futures contract on multiple occasions.
The Division of Enforcement staff members responsible for this case are Steven Kim, James H. Holl, III, Erica Bodin, Matthew Hunter, Kelly Beck, Janet Briner, and Rick Glaser.
