Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING PARTIES’ MOTIONS FOR SUMMARY JUDGMENT AND CROSS-MOTIONS FOR SUMMARY JUDGMENT BENNETT, Chief Judge. TABLE OF CONTENTS /. INTRODUCTION.1147 A. Procedural Background.1147 B. Factual Background.1151 II. LEGAL ANALYSIS. 1155 A. Standards For Summary Judgment.1155 B. ADM’s Motion For Summary Judgment .1156 1. CEA claims .1156 a. Contemplation of actual delivery of grain .1158 b. Multi-factor analysis of contemplated delivery .1162 2. Proof Of Agency Relationships.1165 a. Agency under Iowa law.1165 b. Effect of Introducing Broker status.1167 c. Supervision.1169 C. FAC-MABC And Agri-Plan’s Joinder In ADM’s Motion.1169 D. The Producers’Motion For Partial Summary Judgment.1170 E. Wesley’s Motion For Partial Summary Judgment.1170 1. CEA claims .1170 2. Breach of fiduciary duty.1170 a. Fiduciary relationships under Iowa law.1170 b. Inferences of a fiduciary relationship.1171 III. CONCLUSION.1173 There is a Chinese saying that there are always three sides to the story: yours, mine, and the facts. Here, in support of or in resistance to cross-motions for summary judgment, the parties have provided the court with their respective two sides to the story. The court must determine the third side of the story from the parties’ submissions and then whether summary judgment may be entered on any of the numerous claims in dispute in this litigation. I. INTRODUCTION A. Procedural Background This case arises from hedge-to-arrive contracts (“HTAs”), contracts for the sale and purchase of grain, that were entered into by grain producers and grain elevators. On June 14, 1996, case No. C96-3148-MWB (“Gunderson"), was filed in the United States District Court for the Northern District of Illinois. Plaintiffs in Gunderson are a group of grain producers seeking declaratory judgment and other relief as described in greater detail below. Plaintiffs alleged, inter alia, that defendants engaged in the promotion and marketing of HTAs in violation of the Commodity Exchange Act, 7 U.S.C. § 1 et seq. Also on June 14, 1996, case No. C96-3151-MWB (Hoover), which likewise seeks declaratory judgment and other relief, was filed in the United States District Court for the Northern District of Illinois by a second group of grain producers. All of the grain producers will be referred to herein collectively as the Producers. Both the original complaints in Gunderson and Hoover asserted the same thirteen claims for relief. On September 25, 1996, the Honorable Suzanne B. Conlon, United States District Court Judge for the Northern District of Illinois transferred Gunderson to the Northern District of Iowa. On October 3, 1996, the Honorable James H. Alesia, United States District Court Judge for the Northern District of Illinois, transferred Hoover to the Northern District of Iowa. Defendants ADM and the Grain Elevators subsequently moved for dismissal of the Producers’ claims on a number of grounds. On April 17, 1997, the court entered its ruling on defendants’ motions to dismiss and found, inter alia, that the Producers’ CEA fraud claims had not been pleaded with sufficient particularity. The Producers were directed to file an amended complaint adequately pleading fraud pursuant to Federal Rule of Civil Procedure 9(b). The court further held that such an amended complaint might also rectify any inadequacies perceived in the pleading of other claims, and therefore the Producers would be permitted to replead each count. On May 20, 1997, the court consolidated Gunderson and Hoover. On June 10, 1997, the Producers filed their First Amended Complaint in the consolidated case. The First Amended Complaint contained fifteen claims. Defendants ADM and the Grain Elevators again sought the dismissal of all claims asserted against them in the First Amended Complaint. In its ruling on defendants’ motions to dismiss, the court again found, inter alia, that the Producers’ CEA fraud claims had not been pleaded with sufficient particularity. The Producers were directed to file a second amended complaint adequately pleading fraucTpursuant to .Federal Rule of Civil Procedure 9(b). On May 28, 1998, the Producers filed their Second Amended Complaint in the consolidated case. The Second Amended Complaint asserts the following fifteen claims: Counts I and II allege violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), under 18 U.S.C. § 1962(c), by ADM, CSA, FAC-MARC, and Agri-Plan; Count III alleges a RICO violation, under 18 U.S.C. § 1962(c), by Titonka; Count IV alleges a RICO violation, under 18 U.S.C. § 1962(c), by ADM; Count V alleges fraud in violation of § 4b of the Commodity Exchange Act (“CEA”), 7 U.S.C. § 6b, against ADM and CSA; Count VI alleges that the HTAs are illegal because they violate §§ 4(a) and 4(d) of the CEA, 7 U.S.C. §§ 6(a) and 6(c); Count VII seeks declaratory judgment of the rights of the parties to the HTAs, a declaration that the HTAs are illegal, void, and unenforceable, because they violate §§ 4(a)-(e) of the CEA, 7 U.S.C. §§ 6(a)-(c), § 2(1) of the Securities Act of 1933, 15 U.S.C. § 77b(l), and § 3(a)(10) of the Securities Act of 1934,15 U.S.C. § 78c(a)(10); Count VIII alleges a violation of the CEA, 7 U.S.C. § 6d, by the defendant grain elevators; Count IX alleges a violation of the CEA, 7 U.S.C. § 6o(l), by Titonka, FCE, Bode Co-op, Buffalo Center, West Bend, Cylinder Co-op, FCS and Farmer’s Co-op; Count X alleges a state-law claim for recission of the HTA contracts against defendant Grain Elevators; Count XI alleges a state-law claim of breach of fiduciary duty against ADM, FAC-MARC, Agri-Plan, and CSA; Count XII alleges a state-law claim for breach of fiduciary duty against the defendant Grain Elevators; Count XIII alleges a state-law claim of fraudulent misrepresentation against ADM, FAC-MARC, Agri-Plan, CSA and Titonka; Count XIV alleges a state-law claim for breach of contract against the defendant Grain Elevators; Count XV alleges a state-law claim for negligence against the defendant Grain Elevators. Defendant ADM again moved to dismiss all claims asserted against it in the Second Amended Complaint. The court granted ADM’s motion to dismiss as to that portion of Count VI which is based on claims of excessive speculation because the court concluded that no private cause of action exists under the excessive speculation provisions found in 7 U.S.C. § 6a. The court also granted ADM’s motion with respect to the Producers’ claims for punitive damages under 7 U.S.C. § 25(3)(b). Finally, ADM’s motion was granted with respect to the Producers’ claim of negligence found in Count XV because the Producers’ negligence claim is only asserted against the Grain elevator defendants. In all other respects, ADM’s motion to dismiss was denied. On January 15, 2001, following a scheduling hearing, the court ordered that these cases be arranged into four separate trials: one trial for all plaintiffs with claims pending against defendant Wesley; one trial for all plaintiffs with claims pending against defendant Titonka; one trial for all plaintiffs with claims pending against defendants Ledyard, West Bend Cooperative Company (“West Bend”), Farmers Cooperative Elevator (“Woden”), Bode Cooperative (“Bode”), and Cylinder Cooperative Elevator (“Cylinder”); and one trial for all plaintiffs with claims pending against defendant Farmers Cooperative Elevator of Buffalo Center (“Buffalo Center”). Subsequently, pursuant to Federal Rule of Civil Procedure 21,. the court ordered that these two cases be realigned into four separate cases. The first such case is presently before the court and consists of all plaintiffs with claims pending against defendant Wesley: Asa-Brandt, Inc. a/k/a Asa-Brandt Partnership; Philip Asa; Keith Brandt; Robert Becker; Dennis Cink; Duane DeWaard; Beverly Everett; Richard Gardner; Edward A. Otis; Jim Otis; Ronald Schmidt; and Debra Schmidt. The defendants in the Wesley case consist of Wesley; ADM Investor Services, Inc., (“ADM”); FAC-MARC, Inc. (“FAC-MARC”); Agri-Plan, Inc., (“Agri-Plan”); and Competitive Strategies for Agriculture, Ltd. (“CSA”). On February 15, 2001, ADM filed its motion for summary judgment on all claims of the Wesley Producers. On February 15, 2001, the Wesley Producers moved for partial summary judgment against ADM on the issues of the existence and scope of the alleged agency relationship between ADM and Agri-Plan and on the inadequacy of the supervision of Agri-Plan by ADM. On February 16, 2001, defendant FAC-MARC and Agri-Plan joined in ADM’s motion for summary judgment. On February 16, 2001, defendant Wesley moved for a partial summary judgment against the Wesley Producers on the claims contained in Counts VI, VII, IX, and XII of the Second Amended Complaint on the grounds that the HTAs are not illegal, off-exchange futures contracts, and that the Producers cannot establish that Wesley had a fiduciary relationship with the Producers. The court heard oral arguments on the parties’ cross-motions for summary judgment and partial summary judgment on April 6, 2001. At the oral arguments, plaintiffs were represented by counsel Nicholas P. Iavarone of Bellows & Bellows, P.C., Chicago, Illinois, Scott G. Buchanan of Buchanan, Bibler, Buchanan & Gabor, Algona, Iowa, and Dawn Mastalir of Berenstein, Moore, Berenstein, Heffer-nan & Moeller, Sioux City, Iowa. Defendant ADM was represented by counsel Richard J. Rappaport and Amy B. Manning of Ross & Hardies, Chicago, Illinois, and Margaret M. Prahl of Heidman, Redmond, Fredregill, Patterson, Plaza, Dyks-tra & Prahl, L.L.P., Sioux City, Iowa. Defendant Wesley was represented by counsel Miranda L. Hughes of Brown, Winick, Graves, Gross, Baskerville and Schoenbaum, P.L.C., Des Moines, Iowa. Counsel were very well prepared and presented spirited and very helpful argument to the court. The parties have filed thorough briefs in support of their respective positions. B. Factual Background The court will discuss here only the nucleus of undisputed facts pertinent to the present motions for summary judgment. The Producers are farmers who are grain producers. Defendant ADM is registered with the Commodity Futures Traders Commission (“CFTC”) as a Futures Commissions Merchant (“FCM”). ADM does not deal in cash grain. Defendant FAC-MARC is registered with the CFTC as a Commodity Trading , Advisor (“CTA”). Defendant Agri-Plan is registered with the CFTC as an Introducing Broker (“IB”). Defendant Wesley is a grain elevator in the business of purchasing grain. The Producers entered into HTAs with Wesley. ADM is not a party to any of the Producers’ HTAs with Wesley. The HTAs contained the following terms: Time of Shipment At least two days prior to the first notice day of the underlying futures month held or if a basis has been written, within the terms of the basis contract. Terms and Rules: Flex Hedge Contract * The Buyer (Merchandizer) and the Seller (Producer) '«'ill not write Flex Hedge Contracts or Multiple Year contracts for more than can be produced or will be delivered in a normal crop year by the producer. * The Buyer has the discretion to be informed of the Producers past and current record of production. * Final Pricing (Setting of the Basis Level and the Basis Delivery Month) will be done at the Sellers discretion, but a least two (2) days before the first notice day and before delivery occurs. * Final pricing will be done at Merchan-dizers quoted (Basis Bid) for applicable delivery period. Once a basis is applied to a particular Flex Hedge Contract, all standard delivery contract terms will apply. * This Flex Hedge Contract must be priced (Basis Set) or rolled to another futures month at a cost of one (1) cent plus or minus the spread to that futures month, prior to the first notice day of the underlying futures month currently held, by the Seller. * If the underlying futures hedge is not rolled by the first notice day. The merchandizer will elect to roll. * Multiple year Flex Hedges must be scaled up in subsequent price levels of proportionate and ascending levels. * The Buyer and seller must be in agreement regarding a multiple year Flex-Hedge plan before it is submitted for implementation in the futures market. * If a Multi year plan is implemented and the Seller because of higher prices at harvest elects to roll the lower price level Flex Hedges for future use, the Seller will be obligated to deliver the harvested bushels to the buyer of the Flex Hedge Contracts rolled, at the Buyers quoted bid for the applicable period. The Seller may also elect to use an implemented Flex Hedge Contract equal to the current futures price for the applicable period. * The implementation or Rolling of Flex Hedge futures will be done during open and trading hours at the Chicago Board of Trade. * If it is determined by the Buyer and Seller that contract bushels are undeliverable, the Producer may elect to buy out of the Flex Hedge Contract at the net equity of the trade plus a cost of five (5) cents per bushel. * Failure by the Seller to advise the Buyer within 15 days of receipt of this confirmation will be understood by the Buyer as an acceptance of the terms. Flex-Hedge Contract at p. 1, ADM App. at pp. 31, 33, 35, 37, 39, 41, 43, 45, 47, 49, 51, 53, 55, 57, 59, 61, 63, 65, 67, 69, 71, 73, 75, 77, 79. The HTAs required that the Producers deliver their harvested grain to Wesley, even if they deferred their obligation to deliver at the HTA contract price. Phil Asa and Keith Brandt had a farming partnership. In 1994, they switched to a farming corporation, Asa-Brandt, Inc. The shareholders of Asa-Brandt, Inc. are Phil Asa and Keith Brandt, and their wives. Keith Brandt was responsible for taking care of all of the paperwork for Asa-Brandt, Inc. The Asa-Brandt partnership used HTAs prior to 1996 and delivered grain in satisfaction of those contracts. In July of 1993, Philip Asa and Keith Brandt met with Dennis Hofmeister to discuss writing a flex-hedge program for Asa-Brandt, Inc. After the meeting, Hoft-meister put together the flex-hedge plan for Asa-Brandt, Inc. Philip Asa and Keith Brandt filled out their flex-hedge plan with Hofmeister. In 1993, the Asa-Brandt partnership executed two or three HTAs and delivered grain against them. Asa-Brandt, Inc. paid Hoftmeister for advice in marketing grain and for writing its flex-hedge when there was a fill under the terms of the HTA. Hofmeister advised Asa-Brandt, Inc. on rolls and trading under its flex-hedge program. On April 3, 1995, Robert Becker met with Hofmeister and together they drafted a flex-hedge plan for Becker. In the fall of 1995, Robert Becker and other farmers met with Hofmeister and went over the flex-hedge plans. Hofmeister advised Becker regarding the strike prices he should place in his flex-hedge plan. Becker paid Agri-Plan, Inc. and FAC-MARC, Inc. for Hofmeister’s advice regarding marketing grain. Hofmeister advised Becker when to roll his HTAs. In September of 1995, Becker attended a meeting at the Farm Bureau building in Agona, Iowa, at which Hofmeister told the farmers in attendance when to roll their HTAs. Becker relayed Hofmeister’s recommendation that Becker roll his HTAs to Wesley’s manager, At Beenken, who agreed that it was a good idea. On June 28, 1995, Dennis Cink met with Hofmeister in Clear Lake, Iowa. At the meeting, Hofmeister described the flex-hedge program and encouraged Cink to implement it. Hofmeister gave Cink worksheets and instructions for writing the HTA. Ater their meeting, Cink filled out a flex-hedge plan from Hofmeister’s instructions. Cink took the flex-hedge plan to Wesley in order to talk to Beenken about it, but Beenken was gone. Cink instead spoke to Jerry Andorfer, who informed Cink that Wesley was writing HTA. Beverly Everett met with Dennis Hof-meister in Clear Lake, Iowa. At the meeting, Hofmeister explained the flex-hedge program to her and Everett filled out a flex-hedge worksheet. Everett also signed a fee agreement with Hofmeister under which she agreed to pay Hofmeister for his marketing advice. Hofmeister advised her on her HTA. Everett only knew that she had to pay the elevator a fee to roll her HTA and pay Hofmeister his commission under the contracts. Everett decided to market two more years of grain under the flex-hedge program on the advice of Hofmeister. Everett attended the meeting at the Farm Bureau building in Ago-na, Iowa, in September of 1995, at which Hofmeister advised all of the flex-hedge participants to roll their contracts to May of 1996. In September 1994, ' Duane DeWaard met with Hofmeister in Clear Lake to discuss marketing strategies for grain. Following this meeting, DeWaard drafted flex-hedge plans based on Hofmeister’s instructions. Beenken had referred De-Waard to Hofmeister. DeWaard went over the HTA with Hofmeister and then gave the flex-hedge plan to Beenken at Wesley to implement. DeWaard paid Hof-meister for his marketing advice. De-Waard attended the meeting at the Farm Bureau building in Agona, Iowa, in September of 1995, and changed his flex-hedge plans in accord with Hofmeister’s advice. DeWaard rolled his contracts in accord with advice from Hofmeister. Richard Gardner went to see Hofmeister in Clear lake at the same time as Everett. Hofmeister informed them about the flex-hedge marketing plan and showed them several sample plans while he explained the flex-hedge marketing concept to them. Hofmeister discussed rolling and spreads with Everett and Gardner. Gardner trusted Hofmeister’s advice concerning rolls. Gardner filled out a flex-hedge worksheet at the initial meeting with Hofmeister using Hofmeister’s advice as guidance. Hof-meister advised Gardner as to when to roll his contracts. Gardner attended the meeting at the Farm Bureau building in Algo-na, Iowa, in September of 1995. At the meeting, Hofmeister advised Gardner to roll his contracts to May of 1996. Ron Schmidt met with Hofmeister in Clear Lake and learned about the flex-hedge program. At the meeting, Schmidt received advice from Hofmeister regarding marketing plans for his grain. Schmidt also received a marketing plan prepared by Hofmeister. At his initial meeting with Hofmeister, Schmidt signed a contract with Agri-Plan and Hofmeister filled out Schmidt’s marketing plan. Schmidt took his marketing plan, prepared by Hofmeis-ter to Beenken at Wesley in order to implement the plan. Hofmeister advised Schmidt on when to roll his contracts. On February 15, 1995, Jim Otis and Ed Otis met with Hofmeister to discuss writing a flex-hedge program. At the meeting Jim Otis and Ed Otis filled out them marketing plans pursuant to the advice of Hofmeister. Jim Otis and Ed Otis paid Hofmeister, via payments to Agri-Plan and FAC-MARC, to act as them advisor in regard to the flex-hedge program. Jim Otis and Ed Otis, inter alia, relied on advice from Hofmeister in rolling their HTAs. Both Jim Otis and Ed Otis attended the meeting at the Farm Bureau building in Algona, Iowa, in September of 1995, at which Hofmeister advised the farmers there when to roll their HTAs and assisted the farmers in creating new marketing plans. Beenken followed the flex-hedge plans put together by the Producers. Beenken did not draft the flex-hedge plans or assist the farmers in drafting them. Beenken conferred with Hofmeister regarding the flex-hedge program prior to it being implemented at Wesley. Other than assessments paid to Wesley for rolling HTAs, the Producers never paid Beenken for advice regarding the flex-hedge program. Beenken did not implement flex-hedge programs for any producers who did not use Hofmeister as advisor. Hofmeister advised the Producers on when to roll their HTAs. None of the Producers ever spoke with an' employee of ADM regarding HTAs. The clearing agreement between Agri-Plan and ADM unequivocally states that Agri-Plan is not an agent of ADM: 15. IB is an independent contractor and not an agent of ADM. Without prior written approval of ADM, IB will not use the ADM name on its door or on its office facility, on its stationary, in its telephone listing or in any other commercial listing. IB shall not use the name ADM in answering its telephone or in any other way hold itself out to be associated with ADM other than in the relationship of independent contractor, i.e. IB to a futures commission merchant which carries IB’s trades on a disclosed basis and holds the funds of its customers. In contracting for support services such as rent, telephone, quotations, utilities and the like IB shall contract in its own name and not use or refer to the name ADM. Clearing Agreement at pp. 5-6, ADM App. at 847-48. The CTA agreement between ADM and FAC-MARC similarly contains a provision outlining the scope of their relationship: 1. SCOPE OF RELATIONSHIP. Ad-visor is not an employee, joint venturer, or partner of ADM, and Advisor shall have no authority, express or implied, to act as an agent of ADM. Advisor shall have no authority to represent, contract for or bind ADM, or to assume or create any obligation on behalf of ADM. Advis- or agrees that it shall not hold itself out or represent to any person to the contrary. CTA Agreement at p. 1, ADM App. at p. 827. The Producers had a history of delivering their grain to Wesley. Wesley anticipated delivery of grain under the HTAs at some point. Two of the Producers, ASA and Brandt, delivered grain to Wesley under the HTAs. II. LEGAL ANALYSIS A. Standards For Summary Judgment This court has considered in some detail the standards applicable to motions for summary judgment pursuant to Fed. R.CivP. 56 in a number of prior decisions. See, e.g., Swanson v. Van Otterloo, 993 F.Supp. 1224, 1230-31 (N.D.Iowa 1998); Dirks v. J.C. Robinson Seed Co., 980 F.Supp. 1303, 1305-07 (N.D.Iowa 1997); Laird v. Stilwill, 969 F.Supp. 1167, 1172-74 (N.D.Iowa 1997); Rural Water Sys. # 1 v. City of Sioux Ctr., 967 F.Supp. 1483, 1499-1501 (N.D.Iowa 1997), affd' in pertinent part, 202 F.3d 1035 (8th Cir.2000), cert, denied, - U.S. -, 121 S.Ct. 61, 148 L.Ed.2d 28 (2000); Tralon Carp. v. Cedarapids, Inc., 966 F.Supp. 812, 817-18 (N.D.Iowa 1997), aff'd, 205 F.3d 1347 (8th Cir.2000) (Table op.); Security State Bank v. Firstar Bank Milwaukee, N.A., 965 F.Supp. 1237, 1239-40 (ND.Iowa 1997); Lockhart v. Cedar Rapids Community Sch. Dist., 963 F.Supp. 805 (N.D.Iowa 1997). Thus, the court will not consider those standards in detail here. Suffice it to say that Rule 56 itself provides, in pertinent part, as follows: Rule 56. Summary Judgment (a) For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party’s favor upon all or any part thereof. (b) For Defending Party. A party against whom a claim ... is asserted ... may, at any time, move for summary judgment in the party’s favor as to all or any part thereof. (c) Motions and Proceedings Thereon.... The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a)-(c) (emphasis added). Applying these standards, the trial judge’s function at the summary judgment stage of the proceedings is not to weigh the evidence and determine the truth of the matter, but to determine whether there are genuine issues for trial. Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir.1996); Johnson v. Enron Corp., 906 F.2d 1234, 1237 (8th Cir.1990). An issue of material fact is genuine if it has a real basis in the record. Hartnagel v. Norman, 953 F.2d 394 (8th Cir.1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). As to whether a factual dispute is “material,” the Supreme Court has explained, “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Beyerbach v. Sears, 49 F.3d 1324, 1326 (8th Cir.1995); Hartnagel, 953 F.2d at 394. If a party fails to make a sufficient showing of an essential element of a claim with respect to which that party has the burden of proof, then the opposing party is “entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); In re Temporomandibular Joint (TMJ) Implants Prod.Liab.Litig., 113 F.3d 1484, 1492 (8th Cir.1997). In reviewing the record, the court must view all the facts in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. See Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348; Quick, 90 F.3d at 1377 (same). With these standards in mind, the court turns to consideration of the parties’ motions for summary judgment and partial summary judgment. B. ADM’s Motion For Summary Judgment 1. CEA claims The court initially takes up ADM’s argument that summary judgment should be granted in its favor on the Producers’ CEA claims. The CEA requires that transactions in commodity futures contracts take place only under the rules of a board of trade that has been designated by the Commodity Futures Trading Commission (“CFTC”). Contracts for “any sale of any cash commodity for deferred shipment or delivery,” otherwise known as cash-forward contracts, are excluded from regulation under the CEA. See 7 U.S.C. § la(ll); Grain Land Coop. v. Kar Kim Farms, Inc., 199 F.3d 983, 990 (8th Cir.1999). In this case, ADM contends that the HTAs involved in this litigation are valid “cash forward contracts” exempt from regulation under the CEA while the Producers contend that the HTAs here are illegal, “off-exchange” futures contracts and are therefore governed by the CEA. The Seventh Circuit Court of Appeals cogently explained the differences between valid “cash forward contracts” and illegal, “off-exchange” futures contracts in Lachmund v. ADM Investor Servs., Inc., 191 F.3d 777, 786 (7th Cir.1999): Cash forward contracts permit parties who contemplate the physical transfer of a commodity to guarantee themselves, prior to the time of delivery, a buyer (or a seller) at a particular price, even though convenience or necessity requires delayed delivery or shipment. See Andersons, 166 F.3d at 318; Co Petro, 680 F.2d at 577-78. The CEA’s prohibition of off-exchange contracts for “future delivery” seeks to regulate not this type of contract for the actual physical transfer of a commodity, but instead transactions driven by price speculation. See Andersons, 166 F.3d at 318; Co Petro, 680 F.2d at 577-78 (tracing the cash forward exclusion back to Congress’ enactment of the Future Trading Act of 1921, which exempted from regulation future delivery contracts made by owners and growers of grain). In Salomon Forex, Inc. v. Tauber, 8 F.3d 966 (4th Cir.1993), cert. denied, 511 U.S. 1031, 114 S.Ct. 1540, 128 L.Ed.2d 192 (1994), the Fourth Circuit explained: Because the [CEA] was aimed at manipulation, speculation, and other abuses that could arise from the trading in futures contracts and options, as distinguished from the commodity itself, Congress never purported to regulate “spot” transactions (transactions for the immediate sale and delivery of a commodity) or “cash forward” transactions (in which the commodity is presently sold but its delivery is, by agreement, delayed or deferred) .... Transactions in the commodity itself which anticipate actual delivery did not present the same opportunities for speculation, manipulation, and outright wagering that trading in futures and options presented. From the beginning, the CEA thus regulated transactions involving the purchase or sale of a commodity “for future delivery” but excluded transactions involving “any sale of any cash commodity for deferred shipment or delivery.” 7 U.S.C. § 2. The distinction, though semantically subtle, is what the trade refers to as the difference between “futures,” which generally are regulated, and “cash forwards” or “forwards,” which are not. Id. at 970-71. In contrast to cash forward contracts, futures contracts are mechanisms used to shift price risk and generally do not contemplate or result in the physical transfer of the underlying commodity: [A futures contract] is generally understood to be an executory, mutually binding agreement providing for the future delivery of a commodity on a date certain where the grade, quantity, and price at the time of delivery are fixed. To facilitate the development of a liquid market in these transactions, these contracts are standardized and transferrable. Trading in futures seldom results in physical delivery of the subject commodity, since the obligations are often extinguished by offsetting transactions that produce a net profit or loss. The main purpose realized by entering into futures transactions is to transfer price risks from suppliers, processors and distributors (hedgers) to those more willing to take the risk (speculators). Since the prices of futures are contingent on the vagaries of both the production of the commodity and the economics of the marketplace, they are particularly susceptible to manipulation and excessive speculation. Id. at 971 (footnote omitted). Lachmund, 191 F.3d at 786; accord Grain Land Coop. 199 F.3d at 990 n. 5 (quoting with approval the same segment of the Fourth Circuit Court of Appeals’s decision in Salomon Forex, Inc. v. Tauber, 8 F.3d 966 (4th Cir.1993), cert. denied, 511 U.S. 1031, 114 S.Ct. 1540, 128 L.Ed.2d 192 (1994)). ADM asserts that all federal appellate courts which have reached the merits of the question have held that HTAs like the ones involved in this litigation are valid cash forward contracts. See Grain Land Coop., 199 F.3d at 993; Haren v. Conrad Coop., 198 F.3d 683, 684 (8th Cir.1999); see also Nagel v. ADM Investor Servs., Inc., 217 F.3d 436, 441 (7th Cir.2000); Lachmund, 191 F.3d at 789-90; Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 322 (6th Cir.1998). The Eighth Circuit Court of Appeals has adopted a multi-factor approach to determining whether contracts are cash forward contracts and instructed that a court should consider the intentions of the parties, the terms of the contract, the course of dealing between the parties, and any other relevant factors to determine whether the parties contemplated physical delivery of the grain, “the hallmark of an unregulated cash-forward contracts.” Grain Land Coop., 199 F.3d at 990-91. Drawing on this line of federal appellate case law, ADM contends that the HTAs involved here have all of the essential characteristics of cash forward contracts: (1) The contract specifies idiosyncratic terms regarding place of delivery, quantity, or other terms, and so is not fungible with other contracts for the sale of the commodity, as securities are fungible. But there is an exception for the case in which the seller of the contract promises to sell another contract against which the buyer can offset the first contract, as in In re Bybee, 945 F.2d 309, 313 (9th Cir.1991), and CFTC v. Co Pe\tro Marketing Group, Inc., supra, 680 F.2d at 580. That promise could create a futures contract. (2) The contract is between industry participants, such as farmers and grain merchants, rather than arbitrageurs and other speculators who are interested in transacting in contracts rather than in the actual commodities. (3)Delivery cannot be deferred forever, because the contract requires the farmer to pay an additional charge every time he rolls the hedge. Nagel, 217 F.3d at 441. a. Contemplation of actual delivery of grain ADM asserts that because both the Producers and Wesley contemplated physical delivery of the grain, the HTAs at issue here are all un-regulated cash forward contracts. Grain Land Coop., 199 F.3d at 990-91. ADM directs the court’s attention to the deposition testimony of several of the Producers. Plaintiff Richard Gardner testified he intended to deliver grain under the HTAs: Q. Mr. Gardner, when you filed the lawsuit on June 5th, 1996, after that date, did you intend to deliver any grain under those contracts? A. If the Contracts were valid, yes, I would have at some point in time. Gardner Dep. at p. 99, ADM App. at p. 765. Plaintiff Ron Schmidt similarly stated that he intended with his HTAs to “try to market [his] grain at a more profitable level.” Schmidt Dep. at p. 129, ADM App. at p. 1061. Plaintiff Phillip Asa admitted that he viewed his HTAs as a means to marketing his grain: Q. Is the flex-hedge program that you were discussing a program for marketing grain? A. Yes. That’s what it was all about. Asa Dep. at p. 14, ADM App. at p. 117. Two of the Producers, ASA and -Brandt, actually delivered grain to Wesley under the HTAs. Edward Otis testified: Q: So when entering these — this program, you were intending to sell your grain; correct? A: That’s correct. Edward Otis Dep. at p. 54, ADM App. at p. 695. ADM also points to a letter it received from plaintiffs’ counsel as evidencing an intent on the part of the Producers to deliver grain under the HTAs. On January 8, 2001, the Producers’ counsel, Scott Buchanan, sent a letter to all counsel in this case in which he wrote: You will find beneath the recap a detailed display of the elements used to derive the contract damage sum for each of our clients. By way of illustration, I would invite you to look at the Jim Otis data at 990025-28. At 25 you will see the flex hedge position for each of Jim’s contracts extended over time as though he had been allowed to continue to roll from December to December. Eventually, the flex hedge price was better than the price available in the cash grain market. We contend that Jim, but for the elevator’s breach, would then have filled those contracts by delivery of grain. In other words, had Jim been permitted to continue to roll contract number 25, in December of 1999 he would have compared his flex hedge position to the available cash price ... and, rationally, he would have then filled the flex hedge contract. Buchanan Letter at p. 2, ADM App. at p. 1136. ADM also points out that none of the Producers testified during their respective depositions that they lacked the intent to delivery grain under the HTAs. ADM contends that this evidence demonstrates that the producers intended to delivery grain under the HTAs and eliminates the need for any further analysis of the parties’ intent to deliver. The Producers counter that their intent to deliver grain is a factual dispute and points the court to affidavits they have filed in resistance to ADM’s motion for summary judgment in which they declare: 2. As a grain farmer, it was always my intention to market, sell and deliver to a buyer the grain that I grow. Regarding the flex hedge contracts, however, my intention was that, after harvest, I would determine whether to deliver the just-harvested grain against a flex hedge contract or roll the flex hedge position forward and sell my harvested grain on the cash market. Therefore, I had no obligation to deliver any grain under any flex hedge contract at any time. I also understand that the written terms of the flex hedge contracts permitted me to buy out at any time for a fee. Asa Aff. at p. 1, Pis.’ App. at p. 2; Brandt Aff. at p. 1, Pis.’ App. at p. 7; Cink Aff. at p. 1, Pis.’ App. at p. 14; Duane DeWaard Aff. at p. 1, Pis.’ App. at p. 19; Everett Aff. at p. 1, Pis.’ App. at p. 24; Gardner Aff. at p. 1, Pis.’ App. at p. 29; Edward Otis Aff. at p. 1, Pis.’ App. at p. 34; James Otis Aff. at p. 1, Pis.’ App. at p. 39; Schmidt Aff. at p. 1, Pis.’ App. at p. 44. These portions of the Producers’ affidavits would appear to generate a genuine issue of material fact regarding whether the Producers contemplated delivery of grain under the HTAs. The Producers’ affidavits, however, also raise the issue of whether the affidavits transgress the principle that an affidavit that is in direct contradiction of prior deposition testimony does not raise an issue of material fact. See RSBI Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 402 (8th Cir.1995); Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361 (8th Cir.1983). In determining whether the Producers’ respective affidavits may be considered and whether it creates a genuine issue of material fact, this court must consider application of the rule identified in Camfield and any exceptions to it. In Camfield, the Eighth Circuit Court of Appeals was called upon to determine whether the conflict between a last minute affidavit and the affiant’s earlier deposition testimony created a genuine issue as to any material fact, thus precluding the entry of summary judgment for defendant under Federal Rule of Civil Procedure 56. Camfield, 719 F.2d at 1364. The court noted a split in the circuits on this issue. Id. (comparing the conclusions in Radobenko v. Automated Equip. Corp., 520 F.2d 540 (9th Cir.1975), which concluded that the conflict created by a later affidavit was not a genuine issue but a sham, and Kennett-Murray Corp. v. Bone, 622 F.2d 887, 893 (5th Cir.1980), which concluded that a genuine issue can be raised by a conflicting affidavit in certain circumstances). In Camfield, the Eighth Circuit Court of Appeals found that other courts had considered various factors that might be adequate to fall within an exception to the rule that conflicting affidavits do not create a genuine issue of fact. Camfield, 719 F.2d at 1364. Finding none of these circumstances present in the case before it, the court ruled that the affidavit did not create a genuine but only a sham issue of fact. Id. at 1365. Subsequent appellate decisions in this circuit have sometimes read Camfield as stating the rule that courts will not allow an affidavit in conflict with earlier sworn testimony to create an issue of fact. See, e.g., Adams v. Greenwood, 10 F.3d 568, 572 (8th Cir.1993) (“an affidavit denying what is established by one’s own evidence ... does not preclude summary judgment”); Schlup v. Delo, 11 F.3d 738, 742-43 (8th Cir.1993) (concluding that same rule should apply in the context of habeas corpus litigation), vacated on other grounds, 513 U.S. 298, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995). However, other decisions have observed exceptions to the rule. See, e.g., RSBI Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 402 (8th Cir.1995) (noting that “[i]n Camfield, we held that contradictory affidavits will preclude summary judgment only if the prior testimony reflects confusion on the part of the witness and the affidavits explain why the earlier testimony is in conflict with the affidavits.”); Garnac Grain Co., Inc. v. Blackley, 932 F.2d 1563, 1568 (8th Cir.1991) (in Camfield, “[w]e noted that the affidavit presented by the plaintiffs president failed to ‘explain aspects of his deposition testimony, nor [did] the deposition reflect any confusion on Camfield’s part that ... require[d] explanation,’ ” and extending the holding with these exceptions to an affidavit submitted by a non-party); Kim v. Ingersoll Rand Co., 921 F.2d 197, 199 (8th Cir.1990) (in Camfield, “we held in the context of summary judgment that unless a party explains the conflict in his own testimony, discrepancies in testimony do not create credibility issues for a jury when the district court perceives a readily apparent sham,” and finding adequate explanation in the plaintiffs trial testimony of the discrepancy with prior testimony). The court concludes that the rule in Camfield can most fairly be stated to be that an affidavit inherently contradicting the prior deposition testimony of the affi-ant and containing no explanation or clarification for the disparity fails to generate a genuine issue of fact. Landmark Bank of St. Charles County v. Saettele, 784 F.Supp. 1434, 1439 (E.D.Mo.1992), vacated on other grounds, 21 F.3d 233 (8th Cir.1994). Decisions of the Seventh Circuit Court of Appeals, which has a rule similar to the one stated in Camfield, also stress the existence and plausibility of the affiant’s explanation of the differences between his prior testimony and that found in the affidavit. See, e.g., Unterreiner v. Volkswagen of Am., Inc., 8 F.3d 1206, 1210 (7th Cir.1993) (“ ‘A party may not create a genuine issue of fact by contradicting his own earlier statements, at least without a plausible explanation for the sudden change of heart,’ ” quoting Richardson v. Bonds, 860 F.2d 1427, 1433 (7th Cir.1988)); Holland v. Jefferson Nat’l Life Ins. Co., 883 F.2d 1307, 1315 (7th Cir.1989) (affidavit in civil case must explain apparent inconsistency with deposition testimony in order to create an issue of fact on summary judgment); Babrocky v. Jewel Food Co. and Retail Meatcutters Union, Local 820, 773 F.2d 857, 861 (7th Cir.1985) (affidavits did not create factual issue precluding grant of summary judgment where they contradicted earlier deposition testimony without explaining the contradiction or attempting to resolve the disparity). Here, from the court’s review of the record, with the exception of plaintiff Gardner, the court does not perceive a direct contradiction between a plaintiffs deposition and their respective affidavit. The Producers use of the terms “sell” and “market” in their respective deposition testimony is not necessarily synonymous with delivery. Thus, the court cannot say that the Producers’ deposition statements, with the exception of plaintiff Gardner, were so contradictory of the statements contained in their respective affidavit as to foreclose the affidavit’s use for summary judgment purposes. See Kennett-Murray Corp. v. Bone, 622 F.2d 887, 894 (5th Cir.1980) (“In light of the jury’s role in resolving questions of credibility, a district court should not reject the content of an affidavit even if it is at odds with statements made in an earlier deposition.”). However, because the court concludes that a direct contradiction exists between Gardner’s deposition and affidavit, the court must scrutinize Gardner’s affidavit to see if it presents a plausible explanation for its discrepancies with his prior testimony or other factors justifying an exception to the rule stated in Cornfield and whether the affidavit generates a material issue of fact precluding summary judgment. Here, Gardner’s affidavit offers no plausible explanation for his change in testimony. As a result, the court concludes that Gardner’s affidavit does not fall within the exception stated in Canfield that an affidavit contradicting the prior deposition testimony of the affiant but containing an adequate explanation for the disparity may create a genuine issue of fact. The court finds that Gardner’s affidavit does not create a genuine issue of material fact as to his intent to deliver grain under the HTAs. Thus, if Gardner’s affidavit is excluded from consideration, the court concludes that Gardner has failed to set forth specific facts sufficient to raise a genuine issue for trial on his CEA claims because it is un-contradicted that he intended to physically deliver under the HTAs. Thus, with respect to his HTAs, there was a legitimate expectation that physical delivery of grain by him to Wesley would occur in the future. Therefore, the court grants ADM’s motion for summary judgment on Gardner’s CEA claims. This conclusion, however, leaves open the question of whether, under the muti-factor test approved by the Eighth Circuit Court of Appeals in Grain Land Coop., 199 F.3d at 991-93, there existed a legitimate expectation on the part of the parties to the remaining HTAs “ ‘that physical delivery of the actual commodity by the seller to the original contracting buyer [would] occur in the future.’ ” Id. at 991 (quoting Andersons, Inc., 166 F.3d at 318); see Nagel, 217 F.3d at 441; Lachmund, 191 F.3d at 787. b. Multi-factor analysis of contemplated delivery In Grain Land Coop., 199 F.3d at 991, the Eighth Circuit Court of Appeals instructed that in ascertaining an answer to the question of “whether there is a legitimate expectation that physical delivery of the actual commodity by the seller to the original contracting buyer will occur in the future,” courts should apply a multi-factor analysis and examine each transaction for such characteristics as whether the parties are in the business of obtaining or producing the subject commodity; whether they are capable of delivering or receiving the commodity in the quantities provided for in the contract; whether there is a definite date of delivery; whether the agreement explicitly requires actual delivery, as opposed to allowing the delivery obligation to be rolled indefinitely; whether payment takes place only upon delivery; and whether the contract’s terms are individualized, rather than standardized. Id.; see Nagel, 217 F.3d at 441 (adopting “totality of the circumstances” and noting that when the following three features are present that the contract will be deemed a cash-forward contract: “(1) The contract specifies idiosyncratic terms regarding place of delivery, quantity, or other terms, and so is not fungible with other contracts for the sale of the commodity, as securities are fungible ... (2) The contract is between industry participants, such as farmers and grain merchants ... (3) Delivery cannot be deferred forever, because the contract requires the farmer to pay an additional charge every time he rolls the hedge .”). Applying the multi-factor approach, the court concludes that the HTAs here are all cash-forward contracts. The court turns first to the terms of the HTAs themselves. As the Seventh Circuit Court of Appeals instructed in Lachmund: In determining whether a contract is a cash forward contract- or a futures contract, our starting point must always be the words of the contract itself. The contract’s terms will provide several indications of the nature of the transaction it memorializes. The document itself will reveal whether the agreement contemplates actual delivery, by indicating the following: whether the parties to the contract are in the business of producing or obtaining grain; whether the parties are capable of delivering or receiving actual grain in the quantities provided for in the contract; whether there is a definite date of delivery; whether the agreement explicitly requires actual delivery, as opposed to allowing delivery obligations to be rolled indefinitely into the future; whether payment takes place only upon delivery; and whether the contract’s terms are individualized, as opposed to standardized. Lachmund, 191 F.3d at 787. Here, each of the HTAs are on identical form contracts. Blank spaces are provided on the HTAs for the “Contract No.,” the name of the “Seller-producer,” “Customer No.,” “Merchandizer of delivery,” “Broker,” “Quantity,” “Grain and Grade,” “CBOT Futures Month and Price,” “Delivery Mode,” “Grades to Govern,” and “Weights to Govern.” Each of the HTAs also contained the following terms: Time of Shipment At least two days prior to the first notice day of the underlying futures month held or if a basis has been written, within the terms of the basis contract. Terms and Rules: Flex Hedge Contract * The Buyer (Merchandizer) and the Seller (Producer) will not write Flex Hedge Contracts or Multiple Year contracts for more than can be produced or will be delivered in a normal crop year by the producer. * The Buyer has the discretion to be informed of the Producers past and current record of production. * Final Pricing (Setting of the Basis Level and the Basis Delivery Month) will be done at the Sellers discretion, but a least two (2) days before the first notice dáy and before delivery occurs. * Final pricing will be done at Merchandizes quoted (Basis Bid) for applicable delivery period. Once a basis is applied to a particular Flex Hedge Contract, all standard delivery contract terms will apply. * This Flex Hedge Contract must be priced (Basis Set) or rolled to another futures month at a cost of one (1) cent plus or minus the spread to that futures month, prior to the first notice day of the underlying futures month currently held, by the Seller. * If the underlying futures hedge is not rolled by the first notice day. The merchandizer will elect to roll. * Multiple year Flex Hedges must be scaled up in subsequent price levels of proportionate and ascending levels. * The Buyer and seller must be in agreement regarding a multiple year Flex-Hedge plan before it is submitted for implementation in the futures market. * If a Multi year plan is implemented and the Seller because of higher prices at harvest elects to roll the lower price level Flex Hedges fpr future use, the Seller will be obligated to deliver the harvested bushels to the buyer of the Flex Hedge Contracts rolled, at the Buyers quoted bid for the applicable period. The Seller may also elect to use an implemented Flex Hedge Contract equal to the current futures price for the applicable period. * The implementation or Rolling of Flex Hedge futures will be done during open and trading hours at the Chicago Board of Trade. * If it is determined by the Buyer and Seller that contract bushels are undeliverable, the Producer may elect to buy out of the Flex Hedge Contract at the net equity of the trade plus a cost of five (5) cents per bushel. * Failure by the Seller to advise the Buyer within 15 days of receipt of this confirmation will be understood by the Buyer as an acceptance of the terms. Flex-Hedge Contract at p. 1, ADM App. at pp. 31, 33, 35, 37, 39, 41, 43, 45, 47, 49, 51, 53, 55, 57, 59, 61, 63, 65, 67, 69, 71, 73, 75, 77, 79. It is uncontested that the Producers are farmers or officers of farming corporations engaged in the business of producing grain. Likewise, it is an uncontested fact that Wesley is a grain elevator involved in the business of purchasing grain from farmers for resale. Thus, the parties to these HTAs “are in the business of obtaining or producing the subject commodity.” Grain Land Coop., 199 F.3d at 991; see Nagel, 217 F.3d at 441 (identifying as one of the three central characteristics of a cash-forward contract the fact that the contract “is between industry participants, such as farmers and grain merchants”). The court further notes that the terms of the HTAs limited the amount of grain that could be contracted to no more than “can be produced or will be delivered in a normal crop year by the producer.” Thus, by the terms of the HTAs, the Producers are capable of delivering the commodity in the quantities provided for in the contracts. See Grain Land Coop., 199 F.3d at 991; see also Lambert, 191 F.3d at 788 (considering such a factor and noting that “[tjherefore, it cannot be said that, although the parties are in the business of producing and buying grain, the contract quantities are so much greater than the parties’ capacities that the contract, on its face, must not contemplate actual delivery.”). The HTAs here also contained definite dates of delivery. See Grain Land Coop., 199 F.3d at 991. The court further finds that the HTAs here are individualized with respect to such terms as the quantity of grain, the grade and type of grain, the point of delivery, and the weights and grades that will govern. See Grain Land Coop., 199 F.3d at 991; see also Nagel, 217 F.3d at 441 (considering whether “[t]he contract specifies idiosyncratic terms regarding place of delivery, quantity, or other terms ... ”); Lambert, 191 F.3d at 788 (considering such a factor). Finally, the court concludes that while the HTAs do provide a rolling option, “delivery cannot be deferred forever, because the contract requires the farmer to pay an additional charge every time he rolls the hedge.” Nagel, 217 F.3d at 441. Indeed, in Oeltjenbrun v. CSA Investors, Inc, 3 F.Supp.2d 1024(N.D.Iowa 1998), this court rejected the argument advanced by the Producers here that the ability to roll their HTAs allows them to avoid delivery: This argument, however, disregards the fact that there are indeed limits on rolling in the contracts, because there is a price to be paid for every roll. Not only is there a spread/rolling fee, ... but the CBT price, and hence the cash price, changes that occur with every roll will eventually make it more cost effective to deliver on the contracts than to roll them. Oeltjenbrun, 3 F.Supp.2d at 1044 (citations omitted). Since Oeltjenbrun was decided, the Eighth Circuit Court of Appeals and the Seventh Circuit Court of Appeals have both concluded that rolling fees effectively place a limit on a producers ability to engage in endless rolling. Grain Land, 199 F.3d at 992 (noting that a producer’s “ability to roll the contracts merely allowed him to delay his delivery obligation rather than avoid it altogether.”); accord Nagel, 217 F.3d at 442 (noting the fee for rolling “places a practical limit on how long delivery can be deferred.”). Therefore, applying a multi-factor analysis, the court concludes that the HTAs at issue in this litigation contemplated actual delivery of the subject grain. Thus, because the parties to the HTAs had an obligation to make or take delivery of the subject commodities, the HTAs at issue here are cash forward contracts — i.e., contracts for “sale of any cash commodity for deferred shipment or delivery,” 7 U.S.C. § la(ll) — that fall outside the purview of the CEA. As a consequence of this conclusion on the issue, ADM is entitled to summary judgment in its favor on Count VI. The court next turns to ADM’s assertion that the Producers cannot demonstrate any agency relationships between ADM and anyone who made representations regarding the HTAs. 2. Proof Of Agency Relationships The Producers’ claims are premised on allegations that certain representations were made to them regarding HTAs. It is uncontested that no ADM employees ever promoted the HTAs at issue in this case nor did any ADM employee ever make any representations or solicitations to any of the Producers. Rather, the Producers contend that defendants Agri-Plan and FAC-MARC, acting as agents of ADM, made representations and solicitations to the Producers regarding the HTAs on the behalf of ADM. ADM asserts that the Producers cannot establish that ADM granted anyone actual or apparent authority to make representations and solicitations to the Producers regarding the HTAs on its behalf. ADM contends that the absence of such proof is fatal to the Producers’ claims against it. a. Agency under Iowa law An agency relationship may be established in three ways under Iowa law: an agent may possess express, implied or apparent authority. See Gatzemeyer v. Vogel, 544 F.2d 988, 992 (8th Cir.1976); Mayrath Co. v. Helgeson, 258 Iowa 543, 139 N.W.2d 303, 306 (1966); see also Thorp Credit, Inc. v. Wuchter, 412 N.W.2d 641, 646 (Iowa Ct.App.1987). An agent whose authority has been granted either expressly or by implication possesses actual authority to act on behalf of the principal. Grismore v. Consolidated Prods. Co., 232 Iowa 328, 5 N.W.2d 646, 651 (1942); see State v. Sellers, 258 N.W.2d 292, 297 (Iowa 1977) (“Ordinarily, an agent has implied authority to act for his principal to accomplish the purposes of grants of express authority and may not extend actual authority unreasonably beyond the authority expressly granted.”). On the other hand, apparent authority is that which, although not actually granted, has been knowingly permitted by the principal or which the principal holds the agent out as possessing. Magnusson Agency v. Public Entity Natl Co.-Midwest, 560 N.W.2d 20, 25 (Iowa 1997); Helgeson, 139 N.W.2d at 306; Hall v. Crow, 240 Iowa 81, 34 N.W.2d 195, 200 (1948). A determination of an express or implied agency focuses on communications and contacts between the principal and the agent. In describing express authority, the Iowa Supreme Court has observed: “An agency results from the manifestation of consent by one person, the principal, that another, the agent, shall act on the former’s behalf and subject to his control, and consent by the other so to act. *** An agency may be proven not only by direct evidence of an agreement between the parties but also by circumstantial evidence, such as their words and conduct, from which the intention to create an agency may be fairly implied.” Walnut Hills Farms, Inc. v. Farmers Coop. Co., 244 N.W.2d 778, 781 (Iowa 1976) (quoting Martin v. Jaekel, 188 N.W.2d 331, 333-34 (Iowa 1971)). Creation of apparent authority, on the other hand, focuses on the effect the principal’s conduct or communications has on a third party: Apparent authority is authority which, although not actually granted, has been knowingly permitted by the principal or which the principal holds the agent out as possessing. Magnusson Agency v. Public Entity Nat’l Co. Midwest, 560 N.W.2d 20, 25-26 (Iowa 1997). Apparent authority must be determined by what the principal does, rather than by any acts of the agent. Id. The burden of showing that an agent acted within the scope of the agency’s actual or apparent authority is on the party claiming that such authority existed. Hendricks v. Great Plains Supply Co., 609 N.W.2d 486, 493 (Iowa 2000); Magnusson Agency, 560 N.W.2d at 25; Waukon Auto Supply v. Farmers & Merchants Sav. Bank, 440 N.W.2d 844, 847 (Iowa 1989); Sellers, 258 N.W.2d at 297; Grismore, 5 N.W.2d at 651. As the Iowa Supreme Court pointed out in Sellers: “Stated inclusively, then, the rule is that if a principal acts or conducts his business either intentionally, or through negligence, or fails to disapprove of the agent’s act or course of action so as to lead the public to believe that his agent possesses authority to act or contract in the name of the principal, such principal is bound by the acts of the agent within the scope of his apparent authority as to any person who, upon the faith of such holding out, believes, and has reasonable ground to believe, that the agent has such authority, and in good faith deals with him.” Sellers, 258 N.W.2d at 297 (quoting 3 AM. JuR.2d, Agency, § 74 at 477 (1973)). In the present case, the clearing agreement between Agri-Plan and ADM unequivocally states that Agri-Plan is not an agent of ADM: 15. IB is an independent contractor and not an agent of ADM. Without prior written approval of ADM, IB will not use the ADM name on its door or on its office facility, on its stationary, in its telephone listing or in any other commercial listing. IB shall not use the name ADM in answering its telephone or in any other way hold itself out to be associated with ADM other than in the relationship of independent contractor, i.e. IB to a futures commission merchant which carries IB’s trades on a disclosed basis and holds the funds of its customers. In contracting for support services such as rent, telephone, quotations, utilities and the like IB shall contract in its own name and not use or refer to the name ADM. Clearing Agreement at pp. 5-6, ADM App. at 847-48. The CTA agreement between ADM and FAC-MARC similarly contains a provision outlining the scope of their relationship which explicitly states that FAC-MARC is not an agent of ADM: 1. SCOPE OF RELATIONSHIP. Ad-visor is not an employee, joint venturer, or partner of ADM, and Advisor shall have no authority, express or implied, to act as an agent of ADM. Advisor shall have no authority to represent, contract for or bind ADM, or to assume or create any obligation on behalf of ADM. Advis- or agrees that it shall not hold itself out or represent to any person to the contrary. CTA Agreement at p. 1, ADM