Marc Nemenoff
PRICE Futures Group
Financials: Dec. Bonds are currently 2 lower at 141’15, 10 Yr. Notes 1 lower at 126’29 and the 5 Yr. Notes fractionally lower at 119’29. Results of the 2 day FOMC meeting will be announced at 1:00pm Central. It is expected that we will see the end of Quantitative Easing and that language will reflect the Fed’s desire to keep short term rates (90 day) at their current low yields. For the near term I will be a buyer in Bonds in the 140’06 area and a seller above the 142’29 level. Ever watchfull of the Jue 2015/June 2017 Eurodollar spread, I will buy the spread under 142 premium the June 2015 and sell the spread above the 206 level should the market allow.
Grains: Dec. Corn is currently 2’4 higher at 367’0, Nov. Beans 5’0 higher at 1013’2 and Dec. Wheat 4’4 higher at 535’2. Increased demand, particularly for soymeal from Asia, and slowed harvest due to heavy rains have pushed these markets above resistance levels. We covered all recent hort positions earlier in the week (see Monday 10/27/2014 Report). I still feel that the bearish supply fundamental will eventually come into play and will be a seller in Dec. Corn above 378’0 and a seller in Nov. Beans above 1035’0.
Cattle: Dec. LC and Nov. FC settled moderately lower yesterday with FC continuing to lose ground to the live market especially considering the recent rise in feed grain prices. We continue to hold the combination of short the LCZ 162/170 strangle and long the 158/154 put spread.
Silver: Dec. Silver is currently 5 cents lower at 17.16 and Dec. Gold 4.00 lower at 1225.50. We remain cautiously long a small position.
S&P's: Dec. S&P’s are currently 4.00 lower at 1976.00. The equities have rallied sharply over the last week making up most of the losses from earlier in the month due in part to positive earnings news from most sectors. We are probably on the wrong side of the market being short from the 1920’s but will reserve judgement until tomorrow.
Currencies: We are still on the sidelines.
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