Financials: Sept. Bonds are currently 11 higher at 117'26, the 10 Yr. Notes 8 higher at 116'11, the 5 Yr. Notes 6 higher at 114'28 and the 2 Yr. Notes 2 higher at 108'07. Dec. Eurodollars are 2 higher at 99.330. This afternoon there will be an announcement by the FMOC on interest rates. As has been the case the last few months I expect that there will be no change. What needs to be paid attention to will be the language of the minutes and what they have to say about impending inflation. Keep in mind that at current levels for short term rates there is not much wiggle room to go lower. I continue to look at rallies in Sept. Bonds as selling opportunities. Near term support for Sept. Bonds is currently 115'20 and near term resistance 118'04.
Grains: Yesterday Nov. Beans were 28 cents higher, Dec. Corn fractionally higher and Dec. Wheat 7 cents lower. Over night Beans were unchanged, Corn 1 lower and Wheat 3 lower. This mornings USDA Crop Report showed the following: Corn crop estimate for 2009-10 is 12.761 Billion Bushels, yield per acre, 159.5 bushels per acre and ending stocks 1.72 billion bushels. Soybean crop estimate 3.199 billion bushels, yield per acre 41.7 bushels per acre and ending stocks 110 million bushels. The estimate for the Corn crop is a bit above expectation and Soybeans a bit below expectations. The early morning call (7:45 a.m.) is 3-5 lower for Corn and 3 higher for Beans. This will change as we get closer to the open.
Cattle: Yesterday Live Cattle closed unchanged to 65 lower with the Oct. contract closing 65 lower at 87.67. We remain on the sidelines. With the continuing drop in Hog prices it is hard to predict how much of an effect this will have on Live Cattle prices. I feel that supply fundamentals for Live Cattle are positive on their own compared with prior years, but the competition from bearish Hog fundamentals make Pork more competitive for the consumer dollar at the moment.
Silver: Sept. Silver is currently 6 cents lower at 14.28. Over night the market traded as low as 14.13. I am looking to reinstate a long position between the 13.80 and 14.20 levels.
S&P's: Sept. S&P's are currently 1.00 lower at 992.00. Support remains at 984.00 and resistance at 1008.00. Treat as a trading market between support and resistance. I need to see the market trade below support before I am willing to establish a short position in this market.
Currencies: As of this writing the Sept. Euro is 18 higher at 1.4166, the Swiss 34 higher at .9278, the Yen 29 higher at 1.0447 and the Pound 11 lower at 1.6462. If you remain short the Pound either take profits or lower your protective buy stop to the 1.6560 level. With the overnight low of 1.6389 my near term objective of 1.6400 has been met. Longer term my objective is in the 1.6100 area. The Sept. Dollar Index is currently 12 lower at 79.16.