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The “can’t lose” market continued its grind higher today as the S&P tacked on 0.15% – within earshot of 1,200.  The market has been on a relentless tear towards 1,200 for the last two months.  Today’s move was very similar to every day over the last few months.  Volume was very light, breadth was modestly positive, any dips were bought and most importantly, stocks finished in the green.  As I’ve said previously, this is by far the most impressive portion of the rally.  Perhaps the most impressive part of today’s rally was that it came in the face of continued dollar strength, copper weakness and general commodity weakness.  The VIX sank to recent lows, but found support near 16.30.

From Daily Futures:

Today’s minutes from the Federal Reserve’s meeting of March 16th show support for keeping the federal funds rate near zero “for an extended period.” The chart above, however, shows that the June 2011 eurodollar closed below its 50-day average on Friday – a sign of weakness. Which factor will be more reliable?

U.S. Economy
The U.S. Treasury sold $40 billion of 3-year T-notes at a median yield of 1.72% with a bid-to-cover ratio of 3.10. The June U.S. T-bonds ended up a tick at 114.13/32nds.

This afternoon, the Federal Reserve’s minutes of its March 16th meeting showed that “participants took note of signs that inflation expectations were reasonably well anchored.” The low inflation expectations are said to be behind their decision to keep the federal funds rate near zero “for an extended period.”

Grains and Cotton
After yesterday’s close, the USDA said that 65% of the winter wheat crop was rated good to excellent, up from 43% a year ago. July wheat closed up 12.25 cents at $4.795, blamed on short-covering.

June hogs took a break from yesterday’s new contract high and closed down .75 at 84.30.

May cocoa fell $40 to $2,913 ahead of next week’s report on North American cocoa grindings.

The selling pressure continued on sugar today. May sugar fell .51 to 15.89, the lowest close in ten months.

Orange juice
The Florida Department of Citrus said that there were 121.7 million gallons of frozen orange juice concentrate in inventory on March 27th, up almost 2% from a year ago. May orange juice ended down 2.30 cents at $1.3340.

The U.S. Energy Department (DOE) said in today’s Short-term Outlook that they expect West Texas Intermediate crude oil to average above $81 per barrel this summer and $85 by the fourth quarter of 2011. They also expect retail regular gasoline to average $2.92 this summer. June crude oil ended up .26 at $87.39.

The DOE also said that they expect the Henry Hub natural gas spot price to average $4.57 per thousand cubic feet in 2010, down from last month’s estimate of $5.32. June natural gas fell 18.2 cents to $4.189 with mild to warm temperatures in the eastern two-thirds of the U.S.

June gold started the day lower in the face of a stronger dollar, but closed up $2.20 at $1,136.00.

Currencies – New High Aussie
The Reserve Bank of Australia increased its interest rate from 4.00% to 4.25%, the fifth increase in the past year. The June Australian dollar closed up .65 at a new contract high of 92.03.

The June Canadian dollar closed up .0033 at $1.0000 even for the first time since July of 2008. The loonie is being helped by improvement in Canada’s economy and recent strength in the commodity markets.

U.K.’s Prime Minister Gordon Brown announced that their national election will be held on May 6th. The June British pound finished down .0020 at $1.5268 with concerns that the new Parliament will lack a majority party.

The June euro is trading lower, with ongoing concerns about Greece.

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