Financials: Mar. Bonds are currently 1'29 lower at 141'07 and the Mar. 10 Yr. Note 20 lower at 129'03. Over night: China reduced bank reserve requirements by 50 basis points (0.5%). Global Central Banks moved in tandem to ease financial strain and boost liquidity by lowering the price of Dollar swaps by 0.5%, in effect lowering the value of the Dollar. Italy announced new measures (unspecified) to reduce public deficits in the near term in the hopes of balancing their budget by 2013. ADP estimate of private sector jobs showed an increase of 260,000 vs. expectations of 130,000. All of this was like a perfect storm boosting equities sharply and consequently pressuring treasuries. We remain long out of the money puts.

Grains: Yesterday Jan. Beans closed 7 cents higher at 1132'2, Mar. Corn 7 higher at 605'4 and Mar. Wheat 23 higher at 616'0. Over night Beans were 5 higher, Corn 3 higher and Wheat 8 higher. Renewed Dollar weakness due to international economic events (see financials comments) took the Grains from moderately lower early in the overnight session to higher for the day. We remain long Mar. Corn.

Cattle: Yesterday Feb. LC closed 10 lower at 122.45 and Jan. FC 10 higher at 144.82. Over night Feb. LC are trading 125 higher and Jan. FC 100 higher. I am taking this opportunity to put on a combination of short Feb. LC futures and short Feb. LC 118 puts.

Silver: Mar. Silver is currently 41 cents higher at 32.36. We continue to hold a friendly bias and recommend only using call options to position yourself for a price advance.

S&P's: Dec. S&P's are currently 33.00 higher at 1229.50. Just after yesterday's close S&P announced a lowering in the credit ratings for most major banks (Morgan Chase, Bank of America, etc.) which sent the S&P futures lower, with an overnight low of 1183.00. The surprising announcements early this morning by China and Central Banks (see Financial comments) pushed the market sharply higher with an overnight high of 1234.50. I am taking this opportunity to go short for the near term with a risk of 12.00 points ($600.00). Support is currently 1204.00 and resistance 1235.00.

Currencies: As of this writing the Dec. Euro is currently 158 higher at 1.3488, the Swiss 135 higher at 1.1006, the Yen 65 higher at 1.2902 and the Pound 127 higher at 1.5729. Dollar weak across the board this morning for all the reasons stated elsewhere in today's Report. We remain long out of the money puts in the Yen and Euro.

Regards,

Marc
888.908.4310 | 312.264.4310
mnemenoff@pricegroup.com