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Financials: Sept. Bonds are currently 0 higher at 155’24, 10 Yr. Notes 7.5 higher at 128’03 and 5 Yr. Notes 5.75 higher at 118’09.5. Yesterday the FOMC announced no rate change as expected. However, the language in the notes leads one to believe a rate cut is imminent. Also of note: Mario Draghi of the ECB indicated that the ECB is willing to do whatever it takes in terms of stimulus (rate cuts that will take their 10 Yr. Note into further negative territory) to create some inflation and counter an ever-present economic slowdown. As mentioned last week I believe these factors to be recessionary but must face the bald truth that these markets appear to be headed higher. I am covering shorts in the 5 Yr. for the moment but keeping the long Dec.19/short Dec. 20 Eurodollar spread.
Grains: July Corn is currently 0’6 lower at 440’2, Beans 0’2 lower at 903’6 and Wheat 4’0 lower at 518’2. I remain long Dec/short July Corn believing that new crop Corn will be victim to less acreage and declining yield and that old crop Corn has an ample supply in storage to meet immediate needs.
Cattle: Live and Feeder Cattle edged lower for the week due to ample supplies and higher priced feed grains. I remain short the Aug. 102 put. Longer term I will be looking to be a buyer in OCT. or Dec. LC on breaks.
Silver: Silver is 42 cents higher at 15.39. A decline in the Dollar due to potential rate cuts have lit a fire under this market. Raise protective sell stops to 14.67. WE remain long.
S&P’s: Sept. S&P’s are currently 28.50 higher at 2962, mostly due to the prospect of a rate cut in July. We are near all time highs. I am on the sidelines.
Currencies: I am on the sidelines, regretfully having missed the break in the Dollar.