Financials: Mar. Bonds are currently 14 lower at 118'27. We continue to hold the combination of short Mar. Bonds and short the Mar. Bond 115'00 put. We continue to use a good till cancel order to cover the Mar. Bond 115'00 put at 19 points (currently trading at 60 points).
Grains: Yesterday the Beans closed 15 cents lower, Corn 1 lower and Wheat 4 lower. Over night Beans were 2 higher, Corn fractionally lower and Wheat fractionally lower. This morning's USDA Grain Reports showed the following: Corn Production 12.920 billion bushels and a carryout of 1.675 billion bushels. Soybean Production 3.319 billion bushels and a carryout of 255 million bushels. The trade is currently looking at the report as neutral for Corn and slightly negative for Beans. The question at the moment, has the recent 50 cent break in Beans been enough of a break to price in a somewhat negative report? Near term support in Jan. Beans is currently the 1020'0 level and near term support for Mar. Corn remains at the 378'0 level. We continue to hold the combination of short the Mar. Beans 960'0 put and short the Mar. Beans 1160'0 call. I recommend covering this position at 35'0 cents or better (currently at 37'4). I am willing to try the long side of Mar. Corn below the 378'0 level with a 15'0 cent risk.
Cattle: Yesterday Feb. Cattle closed 1.20 lower at 81.92. The long Feb. / short Apr. spread closed at 3.27 premiums the Apr., losing 40 points. The spread is currently trading at 307 premium the Apr. We continue to hold this spread.
Silver: Mar. Silver is currently 20 cents higher at 17.39. We remain long futures from the 17.80 level and long out of the money call spreads in the July contract.
S&Ps: Mar. S&P's are currently 6.50 higher at 1097.50. I continue to recommend being long out of the money puts as both portfolio insurance and speculative positions.
Currencies: As of this writing the Mar. Euro is 35 higher at 1.4747, the Swiss 24 higher at .9767, the Yen 60 lower at 1.1346 and the Pound 47 higher at 1.6283. We remain long out of the money puts in the currencies. If the Pound trades below the 1.6100 level I recommend selling the 1.5700 put against your current long put positions leaving you with a put spread. The Mar. Dollar Index is currently 16 lower at 76.27. I will once again be looking to the long side of the Mar. Dollar Index below the 75.60 level if the market allows.
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