Take a look at a chart of Gold recently.  Gold held the 50 day ma of $920 and the slow stochastics along with the RSI and MACD all point lower.  Can it break the potentially pivotal $860 level on the downside?

The Buenos Aires grain exchange lowered Argentina crop expectations by 2.2 MMT. They are now at 34 MMT versus 41 just 3 months ago. This has the whole floor rallying. Beans are the biggest receipant of upside momentum.

watch the rally for signs of flounder ing late day as intraday profits are taken.

Corn is strong with beans weak…no real reason.

July is losing to Nov, remember last weeks blog about this collapsing.

Wheat is gaining against corn if only slightly.

Small selling of July corn volatility representing te highest on the floor at 44.25%.

The markets this morning will start slightly higher but I do not expect that to last with crude and equities gravitating lower. The overnight was lower in corn due to plantings speeding up with beans and wheat recovering slightly. Overall a mixed day in the market with swine flu remaining a major factor. Keep an eye on Mexico for talk of mass slaughter with this eating into corn demand.

This is a major deal to start the week. It is likely no market will survive unscathed. Wheat should be the strongest due to the limited impact as compared with corn and meal consumption. Look for beans to get hurt the worst due to exports being curtailed as fear dominates the marketplace.

I am off the floor today to return tomorrow,

Matthew M. Pierce

A developing story in Mexico with a swine flu outbreak that may not seem directly related to agriculture but it is. Think about it as a function of feed demand with Mexico representing one of our largest customers. Less swine means less corn needed for feed. This has a possibe bearish impact on the trade but it remains early in the cycle giving us the rest of the weekend to keep updated.

It was looking great for the USD up until the last two days of this past week losing over two and a half cents to $1.3220 against the Euro.  This fueled the commodity rally as Oil spiked up $2.00 on Friday to over $51.00 even with all the bearish fundamental news with incresed supplies and decreasing demand.  Gold and Silver had greta weeks as Gold is trading right at the resistence of $920.  You need to pay special atention to the currency markets and the USD because sometimes this can override fundamental reasons.  Even with the DJIA recovering old prices have remained steady up here.

Keep a close eye on this spread. It is trading on either side of $1.00 already having collapsed by 8-9-cents on the day. As stated earlier this week, once uner $1.00 thsi should target .80.

Also watch SX-CZ…this is on the move as well with beans losing to corn on psition reversals.

Somebody had been acquiring July longs around 11350 for the past few days. One thought was that it might be the same party who bought the July 110 puts delta neutral with futures. Regardless, they probably scored big today with coffee.

No, I don’t fully trust the move yet, hoping for a test of 116.20 to see if it can hold first, or a move over 118.80. Yet, it will be hard to chase fresh longs as it seems they have deep pockets, so while the persistent call for tight supplies leaves me a long term bull I remain uncommitted in a big way holding only a small long volatility position.

So techs are leading the market meanwhile every other sector is sucking wind. Traders will find any reason to keep the market on the up and up. We see most sectors are struggling such as; pharmaceuticals, machinery, banks, airlines, and retail. The numbers may be improving from worse to bad but this does not mean the market deserves positive momentum. I really have to question the government giving Chrysler and GM more money. We have small and local businesses that could use short term loans and yet we still help the floundering fish. We need to help the small business owner get on their feet. Market resistance at 7500 on the Dow and 800 on the S&P gives the market some cushion if earnings and the stress results of the banks are not what the market wants.