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More than 87,000 farmers have been affected by the MF Global meltdown through their grain co-op ownership, even if they have never traded futures or options, as their co-op earnings may drop if the bankruptcy court doesn’t make the firm’s clients whole. Even the value of their co-op stock could be affected....More

Farming is a business that involves a certain amount of risk, whether it be weather risk, disease risk, financial risk, marketing risk, etc., and most farm operators have developed strategies to manage those risks. One of the strategies that is used to manage grain and livestock marketing risk is to lock-in a profitable price for the grain or livestock that is being produced, using forward contracts or price “hedging” positions. One risk that farmers have never worried about is that the so-called segregated funds that they have in a grain or livestock hedging account would somehow be at risk. This all changed on Oct. 31, 2011, when a company called MF Global Financial filed for bankruptcy....More

The consensus in the grain trade is that USDA should cut its estimate of the 2011-2012 U.S. corn carryout by nearly 6% in Thursday’s monthly supply/demand update. The trade is also anticipating a small cut in the U.S. soybean carryout amid prospects for better U.S. soybean exports due to South American crop reductions and a recent pick-up in U.S. wheat export sales....More