Financials: Bonds are currently 17 lower at 145'28 and the 10 Yr. Notes 10 lower at 133'02. The yield on the 30 Yr. is now just a bit under the 3.0% level and the 10 Yr. Note just under 1.8%. Since my last letter (May 11th) we were stopped out of a short position when the market traded above the 145'08 level in the Bonds and 133'08.5 in the 10 Yr. I suspect that the most recent rally is in part due to J.P Morgan's unwinding of it's hedge position, in addition to a continued flight to safety into the Dollar due to uncertainty in Europe. I am cautiously pursuing the short side of these markets once again.

Grains: Over night July Corn traded 2'6 lower at 594'6, July Beans 16'0 lower at 1397'0 and July Wheat fractionally lower at 608'2. If you remain long July Corn form the 583'0 area, either take profits or raise your protective sell stop to the 589'0 level.

Cattle: Aug. LC is currently unchanged at 118.72 and Aug. FC 20 higher at 157.87. Late last week we took a profit on long Jne LC positions and remain on the sidelines.

Silver: July Silver is currently 60 cents lower at 27.48 and June Gold 17.00 lower at 1541.00. Silver is now nearly 45.0% off the highs made above 49.00 in May 2011. If you consider Silver as part of your overall portfolio strategy, I recommend buying futures or options which have a contract value of 6-10% of your portfolio. As for Gold I recommend trading from the long side on breaks.

S&P's: June S&P's are currently 6.00 higher at 1334.25. Uncertainty in Europe looms large in this market in spite of favorable Housing and Production stats. Treat as a trading affair between 1320.00 and 1350.00.

Currencies: As of this writing the June Euro is currently 6 lower at 1.2730, the Swiss 10 lower at 1.0597, the Yen26 lower at 1.2433 and the Pound 60 lower at 1.5940. I have covered all short biased positions in the Euro at somewhat higher prices. To be honest, I do not have a feel as to what may happen in the near future given the Greek situation. It seems like a slam dunk that the Euro is headed lower which makes me wonder where the chink is in conventional wisdom. I am on the sidelines.

Regards,
Marc
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mnemenoff@pricegroup.com