Financials: Bonds are currently 16 lower at 116'10. We continue to hold the combination of short the Mar. Bond 112'00 put and short the Mar. bond 119'00 call. We have an open order to buy back this position at 48 points (buy the 112'00 put and buy the 119'00 call for a premium of 48 points). Near term support is currently 115'20 and near term resistance 117'06.

Grains: Yesterday Beans were 32 cents lower, Corn down the 30 cent limit and Wheat 36 cents lower. Over night Beans were 2 lower, Corn 17 lower and Wheat 5 lower. Yesterdays Crop Report showed Corn production at 13.151 billion bushels, above the average estimate of 12.819. The average yield per acre was 165.2, above the average estimate of 162.5. Soybean production was 3.361 billion bushels, the average estimate was for 3.337 billion bushels. Yield per acre was 44 bushels, the average estimate being 43.4 bushels per acre. Needless to say traders responded by liquidating long positions. I feel we are now approaching long term support in Mar. Beans in the 955'0 area and for Mar. Corn in the 360'0 area. I will be willing to try the long side of the market at these levels.

Cattle: Yesterday Feb. Cattle closed 40 higher at 85.45. The market was helped by sharply lower grain prices, Feeder Cattle being the main beneficiary closing sharply higher. We remain long Feb. Cattle with a protective sell stop just below the 84.00 level. We remain spread long Feb./short Apr. which gained 40 points but still remains at a loss.

Silver: Mar. Silver is currently 20 cents higher at 18.45. If you remain long futures either take profits or continue to use a protective sell stop at 18.06. We remain long out of the money call spreads in the July contract.

S&P's: Mar. S&P's are currently fractionally higher at 1134.75. We remain long out of the money puts as both a speculative position and portfolio insurance.

Currencies: As of this writing the Mar. euro is currently 56 higher at 1.4551, the Swiss 14 higher at .9845, the Yen 47 lower at 1.0944 and the Pound 90 higher at 1.6261. I am currently on the sidelines. As mentioned in previous letters, I am waiting to see how the currencies perform for the month of Jan. which historically has been a trend setting month for the year.