The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

By Roger Baettig | September 12 2012 10:07 AM

Financials: Dec. Bonds are currently1'02 lower at 147'22 and the 10 Yr. Note 11 lower at 132'14. Germany is likely to allow participation in the ECB proposed Bond buying program of up to 3 year maturities issued by troubled members such as Spain, Italy and Greece to prevent rates from those nations rising too dramatically. This has removed some of the "flight to safety premium" that has kept U.S. Bonds at record low yields. The next item to watch for will be the FOMC announcement tomorrow and whether or not there will be further Quantitative Easing. For the moment I am a buyer below the 147'00 level and a seller above the 151'00 level for short term trades.

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Grains: Dec. Corn is currently 9'0 lower at 768'6, Nov. Beans 17'0 higher at 1718'4 and Dec. Wheat 6'0 lower at 877'6. This mornings Report showed the following: Corn production at 10.727 billion bushels vs. an average estimate of 10.403. The yield came in at 122.8 bushels per acre vs. an estimate of 120.6. The reaction was negative pushing Dec. corn as low as 759'2. Keep in mind this now represents a break of more than 80 cents from the contract high. Long term support is in the 740'0 area and I will be looking to be a buyer at this level if the market allows. Soybean production was estimated at 2.634 vs. a pre-report average estimate of 2.638. The estimated yield per acre was slightly below expectations at 35.3.

Cattle: Oct. LC is currently unchanged at 127.10 and Oct. FC 65 higher at 147.00. The immediate reaction to the Grain report was a rally to the 127.60 area for Oct. LC and 148.15 for Oct. FC. As exspected with lower feed grain prices, Feeders are gaining on the Live market. Currently Hogs are gaining slightly on Live Cattle.

Silver: Dec. Silver is currently 15 cents higher at 33.73 and Dec. Gold 3.00 dollars higher at 1738.00. We remain long Silver with an upside objective in the 36.00 area.

S&P's: Sept. S&P's are currently 7.00 higher at 1438.00. The market continues to rally and hold gains as the Dollar weakens against the Euro due to actions taken by the ECB. The market is also awaiting signals from the Fed on the possibility of another round of Quantitative Easing. I am on the side lines leaning towards a short bias. Resistance is currently in the 1341.50 area (the high in May 2008 was 1441.00). A close below the 1412.00 level will generate a sell signal.

Currencies: As of this writing the Dec. Euro is trading 30 higher at 1.2902, the Swiss 12 higher at 1.0681, the Yen 30 higher at 1.2841 and the Pound 17 higher at 1.6081. I am still on the sidelines.

Regards, Marc 888.908.4310 | 312.264.4310 mnemenoff@pricegroup.com * Click Here to View The Nemenoff Report archive