Financials: Bonds are currently 13 higher at 127'00. This mornings PPI report showed prices down 0.5% versus expectations of down 0.2%. Ex food and energy was in line with expectations of up 0.1%. Weekly Jobless Claims were down 29K versus expectations of down 9K. All in all the trade looked at these numbers as disappointing indicating sluggish growth. Technically the market has penetrated near term upside resistance of 126'27. If you are spread long the 10 Yr. Note/short Bonds I would recommend giving the spread another day or two to see if the Bonds settle back below the 126'15 level and liquidate when the (if the Bonds trade below 126'15. For the near term support is currently 126'09 and resistance 127'14. Treat as a trading market.
Grains: yesterday Nov. Beans closed 7 cents higher at 962'0, Dec. Corn 9 higher at 396'2 and Dec. Wheat 10 higher at 588'2. Over night Beans were 12 higher, Corn 3 higher and Wheat 15 higher. Continued heat in growing areas and a weak Dollar have pushed these markets higher. With Nov. Beans now above the 970'0 level I recommend taking profits on out of the money Nov. Bean call spreads. Producers should start looking for hedging opportunities in Dec. Corn now that the market has reached the 400'0 level. I would recommend a strategy of a combination of buying out of the money puts and selling out of the money calls (the 430'0 strike price or higher).
Cattle: Yesterday Live Cattle closed 100+ higher and Feeder Cattle slightly higher to slightly lower depending on the contract month. The markets arer slightly higher as of this writing. Yesterday the market gave us the opportunity to try the short side of the Oct. Live Cattle above the 93.00 level. I recommend using an initial buy stop at 95.65 for protection.I feel that the ever increasing cost of feed grain should eventually have a negative impact on nearby contract months of both Live and Feeder Cattle.
Silver: Sept. Silver is currently 3 cents higher at 18.32. Early in the session the 18.50 resistance level was tested before the market settled back to current levels. We remain long out of the Dec. Silver 20/22 call spread.
S&P's: s&P's are currently 8.50 lower at 1082.50. Dissapointing economic data this morning has had the expected results. We continue to have a short bias to the market (either short futures, short call or long puts). Near term support remains at the 1072.00 level.
Currencies: As of this writing the Sept. Euro is 130 higher at 1.2860, the Swiss 91 higher at .9579, the Yen 115 higher at 1.1455 and the Pound 118 higher at 1.5366. We have been stopped out of any remain short positions in the Yen. We still have a negative bias to the Euro and looking for an opportunity to throw in the towel on this position over the next few days. The Dollar Index is currently 66 lower at 82.94, trading below support of 83.30-83.50.