Oil, Equities drop as Iran and Saudi's disagree on production freeze

Financials: June Bonds are currently 2 higher at 166’06, 10 Yr. Notes 2 higher at 130’23, 5 Yr. Notes 1 higher at 121’09 and June 2017 Eurodollars steady at 99.085. Initial reaction to the disarray at the Doha (Qatar) conference of which several invitees did not show (Iran) and which resulted in inaction pertaining to a freeze on oil production was a flight to safety in treasuries and a drop in equities. The markets have seen a bit of recovery over night as equity losses and treasury gains have been somewhat trimmed. We remain short June 2017 Eurodollars.

Grains: May Corn is currently fractionally higher at 378’6, Beans 5’2 higher at 961’2 and Wheat 5’0 higher at 464’6. I feel Beans are entering overbought territory and will be selling the July Bean 10.00 calls this morning looking to make 5-10 cents over the next few sessions.

Cattle: June LC closed out the week lower at 122.025 and May FC also lower for the week at 150.20. Early last week we took profits from recent long positions (see Report 4/11/2016). I continue to have a negative bias to FC and have a neutral bias on LC. I will be a buyer in LCM in the 119.00 area and a seller in the 124.25 area.

Silver: May Silver is currently 7 cents lower at 16.24 and June Gold 5.00 dollars higher at 1239.00. We remain long coming in this morning. I will take profits in Gold above 1260.00 and recommend taking partial profits in Silver if you are long multiple contracts.

S&P's: June S&P’s are currently 9.00 lower at 2066.00. The market is lower this morning due to a lack of an agreement on a cap on Oil production. We were stopped out of short futures positions last week when the market settled above the 2072.00 level. We do, however, still hold options positions of either long puts or short the May 2100.00 calls.

Currencies: As of this writing the June Euro is currently 24 higher at 1.1328, the Yen 29 higher at 0.9243, the Pound 30 lower at 1.4176 and the Dollar Index 14 lower at 94.545. I remain negative on the Dollar and bullish the Yen. A bit of incite into my thinking: Lower oil puts stress on U.S. oil industry, Repatriation of funds from tax inversion will put stress in the short term on U.S. corp., the movement to return jobs to the U.S. from cheaper workforces overseas will have an initial negative effect on the dollar as production costs increase. I am NOT making a political statement, just trying to interpret current trends and thinking.

I am once again looking to the long side of June Nat. Gas below 1.8800.