UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Ceres Global Ag Corp., 

Respondent.

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CFTC Docket No. 24-01

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from approximately June 13, 2016, to July 15, 2016, and January 1, 2017, to March 15, 2017 

(“Relevant Period”), Respondent Ceres Global Ag Corp. (“Ceres” or “Respondent”) violated 

Section 9(a)(2) of the Commodity Exchange Act (“Act”), 7 U.S.C. § 13(a)(2). Therefore, the 

Commission deems it appropriate and in the public interest that public administrative 

proceedings be, and hereby are, instituted to determine whether Respondent engaged in the 

violations set forth herein and to determine whether any order should be issued imposing 

remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Respondent consents to 

the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and 

acknowledges service of this Order.1

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 Respondent consents to the use of the findings of fact and conclusions of law in this Order in this 

proceeding and in any other proceeding brought by the Commission or to which the Commission is a 

party or claimant, and agrees that they shall be taken as true and correct and be given preclusive effect 

therein, without further proof. Respondent does not consent, however, to the use of this Order, or the 

findings or conclusions herein, as the sole basis for any other proceeding brought by the Commission or 

to which the Commission is a party or claimant, other than: a proceeding in bankruptcy or receivership; 

or a proceeding to enforce the terms of this Order. Respondent does not consent to the use of the Offer or 

this Order, or the findings or conclusions in this Order, by any other party in any other proceeding.
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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

Ceres is a Minnesota-based corporation that procures, merchandises, and stores grains, 

oilseeds, and energy products. It is one of the largest merchandisers of oats in the United States, 

and it operates four of the thirteen warehouse facilities that have been designated as regular for 

delivery of oats by the Chicago Mercantile Exchange. From approximately June 13, 2016, to 

July 15, 2016, and January 1, 2017, to March 15, 2017, Ceres attempted to manipulate the price 

of oats futures in an effort to profit from futures trading and gain competitive advantages over 

their competitors by obtaining higher quality oats from the futures delivery process. 

In its effort to affect oats futures prices, Ceres built large long positions at or close to the 

spot month speculative limits, held those long positions into the delivery period, and took 

delivery of oats. Senior personnel at Ceres knew about and facilitated the attempted 

manipulation. 

B. RESPONDENT 

Respondent Ceres Global Ag Corp. is a public company organized in Ontario, Canada 

with its principal place of business in Golden Valley, Minnesota. Ceres’s primary business is 

procuring and supplying grain and oilseed in North America, including from its 13 storage 

facilities located in Canada and the United States. Ceres has never been registered with the 

Commission in any capacity. 

C. FACTS 

1. Ceres Attempts to Manipulate the July 2016 Oats Futures Contract 

Going into June 2016, Ceres carried a short position in the July 2016 oats futures contract 

offered on the Chicago Board of Trade as part of its normal hedging strategy. At the time, 

Ceres’s oats trading activity was primarily directed by a former senior officer (the “Former 

Officer”) and executed by an oats trader (“Oats Trader 1”). The Former Officer conceived of a 

plan to take delivery from the futures market in July 2016, which he anticipated would increase 

the price of the July 2016 oats futures contract. On or about June 13, 2016, the Former Officer 

directed the company’s oat traders to exit the company’s short hedge positions in the July 2016 

oats futures contract and attempt to establish a long position of 600 contracts in the July 2016 

oats futures contract, or 3 million bushels, the speculative position limit set by the exchange. At 

that time, Ceres had no immediate need for that many bushels of additional oats: it held more 

than 6 million bushels of oats in its inventory, and its pending sales did not require procurement 

of additional oats. 
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In addition to building its long futures position in the July 2016 oats futures contract, the 

Former Officer directed Oats Trader 1 to attempt to buy back shipping certificates2

—which the 

company had previously tendered to other market participants—in a way that would not “tip 

[their] hand” to the market about Ceres’s goal of standing for delivery at contract expiration. 

This increased the probability that the company would be able to establish its long position at a 

lower cost and not reveal its intent to stand for delivery. The company anticipated that 

repurchasing the shipping certificates would reduce the amount of lower quality oats available to 

other market participants, making it more difficult for short-position holders to obtain lower 

quality oats to make delivery. This would potentially allow the company to take delivery of 

higher quality oats at delivery prices, i.e., at lower costs. 

By June 30, 2016, Ceres had built a long position of nearly 2.6 million bushels, or 537 

contracts. In an email to the oats trading team, the Former Officer noted that this position was 

“not quite where we wanted to be, but big enough to benefit if this thing really inverts.” On 

July 1, 2016, Ceres held 100% of the long open interest in the July 2016 contract. During the 

July 2016 delivery period, Ceres took delivery of 484 contracts and entered into offsetting 

transactions of an additional 53 contracts. 

2. Ceres Attempts to Manipulate the March 2017 Oats Futures Contract 

Ceres engaged in similar activity in connection with the March 2017 oats futures 

contract. In January 2017, the Former Officer wrote that Ceres was “in position to stop back all 

our remaining receipts,” and did not “really need to stop anything else before May 1st (to supply 

open contracts) so from a true procurement standpoint we aren’t in a position to be a strong 

stopper until the May. That said, we could stand on the March anyway without too much risk so 

we might do that, but it’s a harder decision at 260 vs. 240.” 

By late February 2017, Oat Trader 1 explained that the company’s plan was to “scale out 

[of some of the long position] on the way up, using our initial size as a catalyst to help boost that 

spread/flat price higher.” In March 2017, as Ceres held its long position into delivery, certain 

Ceres personnel anticipated that some short-position holders might not have sufficient oats to 

meet their delivery obligations, and one asked the Former Officer “when will the scrambling 

begin for people on the other side of our March oat contract trade when we request delivery and 

they don’t have any physical oats?” The Former Officer responded that it was “already 

happening.” During the March 2017 delivery period, Ceres took delivery of 337 contracts and 

entered into offsetting transactions of an additional 224 contracts. 

III. LEGAL DISCUSSION 

Section 9(a)(2) of the Act makes it unlawful for “[a]ny person to manipulate or attempt to 

manipulate the price of any commodity in interstate commerce, or for future delivery on or subject to 

 

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 Delivery of an oats futures contract is effected when a short-position holder tenders a shipping 

certificate (often referred to as a “delivery receipt”), which gives the recipient ownership of 5,000 bushels 

of oats in a designated exchange-approved delivery facility. A certificate owner has the right (but not the 

obligation) to cancel and load out the oats represented by the shipping certificate. 
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the rules of any registered entity.” 7 U.S.C. § 13(a)(2). Attempted manipulation is established when a 

party intends to cause an artificial price of any commodity in interstate commerce and commits an 

overt act in furtherance of that intent. See, e.g., CFTC v. Parnon Energy Inc., 875 F. Supp. 2d 233, 250 

(S.D.N.Y. 2012) (citing In re Hohenberg Bros., CFTC No. 75-4, 1977 WL 13562 (Feb. 18, 1977)). 

Ceres intended to manipulate the price of the July 2016 and March 2017 oats futures contracts 

in order to benefit, among other things, Ceres’s derivatives positions, including futures positions on or 

subject to the rules of entities registered with the Commission, and its physical positions to the extent 

Ceres acquired higher quality oats through the delivery mechanism at below-market prices. In 

furtherance of that intent, Ceres built large long positions close to or at the exchange-set speculative 

limits and held those positions into delivery, with the specific intent of raising the prices of oats futures 

outside the ordinary forces of supply and demand. Through these actions, among others, traders and 

others at Ceres intended to cause artificial prices of oat futures contracts in July 2016 and March 2017. 

By this conduct, Ceres attempted to manipulate the price of the July 2016 and March 2017 oats futures 

contracts in violation of Section 9(a)(2) of the Act. 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, Ceres 

violated Section 9(a)(2) of the Act, 7 U.S.C. § 13(a)(2). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that it may possess under the Equal Access to Justice Act, 

5 U.S.C. § 504, and 28 U.S.C. § 2412, and/or the rules promulgated by the 
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Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2022), relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; and 

E. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondent violated Section 9(a)(2) of the 

Act, 7 U.S.C. § 13(a)(2); 

2. Orders Respondent to cease and desist from violating Section 9(a)(2) of the Act; 

3. Orders Respondent to pay a civil monetary penalty in the amount of three million 

dollars ($3,000,000), plus any post-judgment interest, according to the terms set 

forth below; and 

4. Orders Respondent and its successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order. 

F. Represents that it has already remediated and amended its policies and procedures to 

ensure it does not violate Section 9(a)(2) of the Act, including, but not limited to, the 

following: 

1. Engaged third-parties to assist Respondent’s review of policies, procedures, and 

training to ensure compliance with the Act and Regulations; 

2. Implemented training for all personnel involved in trading commodity interests to 

ensure compliance with the Act and Regulations; 

3. Implemented new policies and procedures to ensure that Respondent complies 

with the Act and Regulations when it takes or makes delivery of a commodity 

pursuant to a futures contract; and 

4. Designated a Chief Compliance Officer responsible for ensuring compliance with 

the Act and Regulations. 

Upon consideration, the Commission has determined to accept the Offer. 
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VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent and its successors and assigns shall cease and desist from violating Section 

9(a)(2) of the Act, 7 U.S.C. § 13(a)(2). 

B. Respondent shall pay a civil monetary penalty in the amount of three million dollars 

($3,000,000) (“CMP Obligation”), plus post-judgment interest. Respondent shall satisfy 

the CMP Obligation by making payment as follows: 

a. $1,000,000 to be paid within 10 days of the date of entry of this Order; 

b. $1,000,000 to be paid within six months of the date of entry of this Order; and 

c. $1,000,000 to be paid within 12 months of the date of entry of this Order. 

Post-judgment interest shall accrue on the unpaid portion of the CMP Obligation beginning 

on the date of entry of this Order and shall be determined by using the Treasury Bill rate 

prevailing on the date of entry of this Order pursuant to 28 U.S.C. § 1961. Post-judgment 

interest will be waived for any amounts paid in compliance with the above deadlines. 

Respondent shall pay the CMP Obligation and any post-judgment interest by electronic funds 

transfer, U.S. postal money order, certified check, bank cashier’s check, or bank money order. 

If payment is to be made other than by electronic funds transfer, then the payment shall be 

made payable to the Commodity Futures Trading Commission and sent to the address below: 

MMAC/ESC/AMK326

Commodity Futures Trading Commission 

6500 S. MacArthur Blvd. 

HQ Room 266 

Oklahoma City, OK 73169 

9-amz-ar-cftc@faa.gov 

If payment is to be made by electronic funds transfer, Respondent shall contact Tonia King 

or her successor at the above address to receive payment instructions and shall fully comply 

with those instructions. Respondent shall accompany payment of the CMP Obligation with a 

cover letter that identifies the paying Respondent and the name and docket number of this 

proceeding. The paying Respondent shall simultaneously transmit copies of the cover letter 

and the form of payment to the Chief Financial Officer, Commodity Futures Trading 

Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

C. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither it nor any of its successors and 

assigns, agents or employees under its authority or control shall take any action or 

make any public statement denying, directly or indirectly, any findings or 

conclusions in this Order or creating, or tending to create, the impression that this 

Order is without a factual basis; provided, however, that nothing in this provision