Commodities Take A Breather

The ten-year Treasury yield rose for the first time in almost
two weeks after the government released a report showing a 0.5% increase in
producer prices, a larger percentage than what analysts predicted.  The
rise in bond prices comes as investors sway towards expecting more rate hikes in
August, which may be cemented after tomorrow’s CPI numbers are released. 
Fed Chairman Bernanke also speaks in front of Congress tomorrow, so investors
are waiting for any sort of inclination that the Fed will or will not raise
rates for the 18th straight time.

The Dollar rallied to three-month highs against the Euro and
the Japanese Yen today, after a government report showed that foreign purchases
of securities increased in May.  May purchases were $69.6 Billion, up from
$51.1 Billion purchased in April.  The increase shows a foreign demand in
U.S. investments, as the U.S. Dollar continues to remain attractive as an
international investment.

The energies fell across the board, as crude took a break from
its run up and natural gas took a sharp fall.  Weather predictions in the
U.S. forecast a reprieve from the hot weather, which led to a sell-off in
natural gas.  An increase in inventories, coupled with the weather
predictions, led to a nearly 5% decline in the price of natural gas.  Crude
oil futures fell over 2%, down $1.76 at $73.54 a barrel.  Despite
continuing violence in the Middle East, investor sentiment seemed to calm down
on the fact that Iran has not yet entered the conflict, as the world waits on
edge for a peaceful solution.

As the dollar rose against foreign currencies, demand for gold
futures fell dramatically.  Gold fell 3%, silver fell over 5% and aluminum
closed down over 2%.  With investors hedging that the Fed will raise rates
in August, more people looked for safety in the growing American economy.

The softs traded mostly lower to close the day.  Cocoa
was down 3.6% and orange juice fell nearly 2%.

The grains traded mixed during today’s session.  Corn
closed down 2%, wheat closed up just over 1% and bean oil traded lower just over

The meats traded mixed with some fractional losses. 
Feeder cattle rose 0.4% and potbellied pigs slumped 0.8%.

Economic News

Wholesale Prices Increase On Higher Food Prices (full

A round of foreign economic reports was released
Check them

John Patrick Lee