Financials: Sept. Bonds are currently 18 lower at 149'01 and the 10 Yr. Note 4 lower at 133'28.5. Friday's stated support of 147'18 has held. Yesterday's ISM Manufacturing Index came in at a disappointing 49.7 vs. expectations of 52. A number below 50 is considered by many in the industry an indication of possible economic contraction. Hence a rally through resistance of 149'18 to just above the 150'00 on speculation of possible stimulus. Given the 4th of July holiday, Jobless Claims on Thurs. and Unemployment on Friday, I'm headed for the sidelines.

Grains: Dec. Corn is currently 8'0 higher at 664'0, Nov. Beans 10'0 higher at 1448'0 and Dec. Wheat 4'0 higher at 795'0. Hot dry weather has been the dominant force for the last few trading sessions pushing markets to new recent highs. On Friday we tried the short side of Dec. Corn in the 652'0 area with a 15 cent protective stop only to be stopped out over night in the 667'0 area. Until there is precipitation in the forecast these markets appear destined to trade higher. As for hedging opportunites for producers (as opposed to users), I caution against using futures at this time and feel more comfortable paying the premium for out of the money puts, especially in Corn. The potential problem with using futures is this: If hot dry weather continues and Corn continues to rally you may find lower crop yields and be over hedged (too many futures) and find yourself with unlimited risk.

Cattle: Aug. LC is currently 27 higher at 119.55 and Aug. FC 30 lower at 149.35. As mentioned last Friday, my bias has turned from the long side to the short side of the market. Higher feed grain prices should pressure the market, especially Feeder Cattle prices. Producers should be looking for hedging opportunites on any further rallies.

Silver: Sept. Silver is currently currently 50 cents higher at 27.07 and Aug. Gold 17.00 dollars higher at 1615.00. We remain lightly long Silver. Look for resistance in the 1620-1626.00 area for Aug. Gold.

S&P's: Sept. S&P's are currently 2.00 higher at 1359.00. We took profits from long positions last Friday just above the 1343.00 area missing out on an additional rally which saw the market trade just above the 1360.00 area. My bias has now changed to the short side of the market but I'm staying on the sidelines through the Holiday.

Currencies: As of this writing the Sept. Euro is 3 lower at 1.2590, the Swiss 4 lower at 1.0484, the Yen 55 lower at 1.2540 and the Pound 17 lower at 1.5672. I am still on the sidelines.

Regards, Marc
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