Financials: Sept. Bonds are currently 14 lower at 136'20 and the 10 Yr. Notes 3 lower at 130'00. Yields are still down with the 30 Yr. at 3.6% and the 10 Yr. at 2.25%. This mornings PPI was up 0.2% vs. average expectation of 0.1%. Ex food and energy was up 0.4% vs. average expectation of 0.2%. The markt is looking at these figures as potentially inflationary, leaving less room for the Fed's continues easing. I remain on the sidelines.

Grains: Yesterday Beans closed down 3, Corn up 7 and Wheat up 12. Over night Beans were 5 higher, Corn 1 higher and Wheat 4 higher. We remain long call spreads in Corn.

Cattle: Yesterday Oct. Live Cattle closed 7 higher and Oct. Feeder Cattle 35 lower. Over night Lc is about 25 lower and FC 50 lower. I continue to have a negative bias to these markets.

Silver: Sept. Silver is currently 23 cents higher at 40.05. We continue to hold a small long position. Resistance remains at 41.00. Dec. Gold is currently 1.00 at 1786.00. I prefer the short side of this market for the near term with protective buy stops above the contract high of 1817.00.

S&P's: S&P's are 3.25 higher at 1195.50. Treat as a trading market between 1175.00 and 1200.00.

Currencies: As of this writing the sept. Euro is 82 higher at 1.4471, the Swiss 114 higher at 1.2729, the Yen 42 higher at 1.3076 and the Pound 33 higher at 1.6484. Highlights from Sarkozy (France) and Merkel (Germany) meeting: EC needs stronger power for fiscal needs. Will do what's needed to shore up the Euro. Proposal for financial transaction tax. Proposal for Euro Zone economic council that wil help strengthen national fiscal solvency. Balanced budgets for Euro Zone countries. All good ideas, the problem being follow through. I remain on the sidelines.

Regards,

Marc
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mnemenoff@pricegroup.com