Yields Fall To 3-Week Lows

The 5 and 10-year U.S. Treasury notes rose today, on signs
that the Fed rate hikes are slowing economic growth.  Yields fell to their
lowest numbers in three weeks, as investors began to see signs that the Fed may
pause the rate hikes in August, ending a streak of 17 hikes in a row.

The Japanese Yen rose against the U.S. dollar today on signs
that the Bank of Japan will raise interest rates later this week.  On
Monday, July 3, the BOJ released a report which expected the bank to raise rates
a quarter point on July 14.  However, gains were capped on news that Japan
is considering a pre-emptive strike against neighboring North Korea. 

Crude oil rose 0.8% to $74.16 on news that Iranian President
Ahmadinejad has no plans to tone down the country’s uranium enrichment program. 
Natural gas traded higher during today’s session, but gave back gains to close
flat for the day.

Gold futures traded higher today, up 3% at $643.10 an ounce as
investors sought safe-haven futures on Iran’s nuclear stance.  Copper also
traded higher, up nearly 2%.

Grain futures traded higher across the board after a USDA
report showed a serious drop in this year’s crop ratings, due to hot, dry
weather in the Midwest.  The harmful weather shows no signs of a reprieve. 
Corn futures traded higher 2.4% and wheat traded higher just over 4%. 

The softs traded mixed to close the day.  Cocoa fell
1.4%, coffee fell 0.7% and orange juice gained 0.6%.

Meats traded mixed, as potbellied pigs continued a move up to
close up 2.8%, while feeder cattle dropped slightly, down .4%.

John Patrick Lee