Financials: Sept. Bonds are currently 3 higher at 123'22 and the 10 Yr. Notes 5 higher at 123'00. The 10 Yr. Note/ Bond spread has broken through support of 0'28 premium the Bonds and is currently trading at 0'19 premium the Bonds. The yield on the 10 Yr. Note is now about 3.08% up from a low of 2.89% early in the week as the market absorbs the ending of QE2 (quantitative easing). Support on the Bonds is currently 122'21 with resistance being lowered to the 124'28 level. Treat as a trading market between support and resistance.
Grains: This mornings Grain Report showed the following: Planting Estimate: Corn 92.3 million acres versus an average estimate of 90.776 million acres. Beans 75.2 million acres vs. 76.476. All Wheat 56.4 vs. 56.607.
Grain stocks: Corn 3.670 vs. the average estimate of 3.324. Beans 0.619 vs. 0.597. Wheat 0.861 vs. 0.825. (billion bushels). Currently the market is called sharply lower in Corn, lower in Beans and Wheat as the market digests the fact that supplies are not as tight as once thought and acreage in corn is up by 1.5 million acres. We continue to hold a combination of long futures and short calls in Dec. Corn and Dec. Wheat. We are also long out of the money call spreads in Corn. I will reconsider these positions after the "dust has settled".
Cattle: Live Cattle are currently sharply lower and Feeder Cattle moderately higher as a result of this mornings grain report. Cheaper feed grain makes Feeders look attractive and lowers the cost of gain allowing heavier weight cattle. We are currently on the sidelines after recommending to liquidate long Dec. Live Cattle futures over the last few sessions.
Silver: Sept. Silver is currently 8 cents higher at 34.85. We continue to hold a small long position.
S&P's: Sept. S&P's are currently 2.00 higher at 1306.25. We remain short from the 1293.00 level with a protective buy stop in the 1309.25 area.
Currencies: As of this writing the Sept. Euro is 32 higher at 1.4427, the Swiss 4 lower at 1.1984, the Yen 84 higher at 1.2481 and the Bond 43 lower at 1.5995. Yesterday we tried the short side of the Euro only to be stopped out of the position when the market traded above the .14416 level overnight. As many of you may know from reading this Report I have been contemplating the short side of the Swiss. You might consider a low risk trade such as buying the Aug. Swiss 1.15 put for about 30 points.
888.908.4310 | 312.264.4310