Financials: June Bonds are currently 28 lower at 147'01 and the 10 Yr. Note 11 lower at 133'09. Technically these market appear to be forming a top, especially the 5 Yr. Note. Yields are about 2.85% on the 30 Yr. and 1.76% on the 10 Yr. Note. Consider out of the money puts and/or put spreads for Sept. expiration on either the Bonds or 10 Yr. Note.
Grains: Over night July Corn is trading 8'2 lower at 624'6, July Beans 4'0 lower at 1408'2 and July Wheat18'2 lower at 686'0. Yesterday's high of 644'0 in July Corn may hold for sometime. The market will need more positive export news to go much higher than present levels. That being said, I also believe the downside is limited to the 590'0 to 610'0 level. In about a month focus will start to switch to new crop (Dec.) which will be subject to ever changing weather conditions. Of note: Wheat has had quite an advance due to increasing dry global weather in Wheat growing areas. Admittedly I am not a very good short term Wheat trader.
Cattle: Aug. LC is currently 40 higher at 121.20 and Aug. FC 27 higher at 159.37. Friday's Cattle on Feed Report showed the following: On Feed 99% of a year ago vs. average expectations of 100.3%. Placements 85.0% vs. expectations of 88.4%. Marketed 100% vs. expectations 98.6%. All in all a construtive report but given the recent run up in prices I feel that further gains will be limited as evidenced by yesterdays early rally and lower close. As mentioned last week, producers should be looking for hedging opportunities. Technically, support for Aug. LC is currently 118.50 with resistance at 122.50-123.00.
Silver: July Silver is currently 8 cents lower at 28.25 and Aug. Gold 8.60 lower at 1582.6. We remain long a small position in Silver. I will also be looking to be a buyer once again in Aug. Gold below the 1545.00 level if the market allows.
S&P's: June S&P's are currently 1.00 higher at 1317.00. Support is currently 1294.00 and resistance 1326.00. Treat as a trading market. Trends remain down.
Currencies: As of this writing the June Euro is trading 36 lower at 1.2755, the Swiss 27 lower at 1.0627, the Yen93 lower at 1.2511 and the Pound 8 lower at 1.5796. I am on the sidelines at the moment. I had been looking for a bounce in the Euro (we had one from 1.2644 to 1.2820) and to be honest, I still do not know what to do. Technically the trend remains down with long term support in the low 1.20's. That being said, I feel these markets are too risky at the moment to be involved in futures and recommend using options if you have a strong opinion because of the limited risk.
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