The overall trend remains down

Financials: As of this writing (6:15am) June Bonds are 5 higher at 156’07 overnight and 25 higher over the last 5 sessions. 10 Year Notes are 4 higher at 132’05, up 7 for the week. The 5 year notes are 2 higher at 124’0 and up 3 for the week. Since last week yields are slightly lower with the 2 year down 2 basis points yielding 0.15%, the 5 year down 2 basis points at 0.85%, the 10 year down 2 at 1.67% and the 30 year bond down 4 at 2.37%. The overall trend remains down. The FMOC minutes were released yesterday and the market had little response. The minutes indicated what we already know: Things are getting better, inflation is a transitory risk, however, the Fed will remain data dependent. What is interesting is that there was some conversation on tapering ( the fed easing off on buying bonds and mortgage backed securities) but let me stress that there was only mention of it, no timetable for action.

Grains: July Corn is 4 cents higher at 662’2 but down 38’0 for the week, new crop Dec. is 5’0 higher at 544’0 also down 38’0 for the week. July Beans are 4’0 higher overnight at 1489’4 down 143’0 for the week. Nov. Beans are up 3’0 overnight at 1372’0 and down 52’0 for the week. We may have overstayed our welcome on long Nov. Bean positions but we are still profitable having gone long in the 1100’0 area. Some rain in Southern Brazil and decent growing conditions here in the USA have added momentum to the downside in prices.

Cattle: Yesterday June June Live Cattle closed 15 higher at 116.90 down 1.70 for the week. Aug. LC closed 40 higher at 120.12, down220 for the week. Aug. Feeder Cattle closed 95 higher at 152.87 up 235 for the week. The LC has been plagued by heavy Marketings in response to higher feed prices over the last month or so. The recent break in feed grain prices has supported deferred contracts as witnessed by the large premium of October, December and February contracts over the June and Aug. Feeder Cattle prices have benefited from the break in Corn and have gained substantially on LC prices. My bias is now to the Long side of the market.

Silver: July Silver is 12 cents lower at. 27.90 up $1.03 for the week. I feel this market is going into a wide sideways formation between 27.00 and 29.50.

S&P: June S&P’s are currently 8.00 lower at 4102.00. The market may have put in a short term double top in the 4178-4179.00 level. Support is currently 4036.00 and resistance 4156.00. Treat as a trading affair between support and resistance. My bias is toward the short side on rallies.

Currencies: I continue to have a long bias on the Pound which is currently up 106 for the week at 1.4131. My objective is the 1.4250 area. I continue my long bias to the Yen, currently up 47 for the week at 0.9172.