Corn rises out a field in front of a row of grain bins near Clarksdale, Miss., in May 2017
Corn rises out a field in front of a row of grain bins near Clarksdale, Miss., in May 2017

Grains showing strength, cotton searching for bottom

Soybeans and Corn Building Momentum Rice and Wheat Remain Bullish Cotton Searching for Bottom

What to expect from the markets this week, July 3, 2017

Market “Near Term” Snap Shot

  • 10-year Treasury Yield needs to finish the countertrend move started the week of July 3, 2017 from 2.14 to 2.31
  • S&P 500: A cautionary time period   
  • Global Equities: A cautionary time period  
  • U.S. Dollar: In search of a bottom with a couple of options being 95 area (basically achieved) or 92
  • Oil $WTIC: Likely assume Bearish until $48 holds as support
  • Commodity Index: Most likely this index at the very least needs to revisit previous lows
  • Corn: Appears the correction of the upside move has completed with potentially higher prices
  • Wheat: Price potential to $5.51 almost achieved
  • Soybeans: The bottoming process likely has not yet completed, a retest of the $9.00 area or lower a possibility
  • Rice: Bullish bias remains
  • Cotton: Prices need to hold current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents or lower

In addition to the following “Expanded near Term Market Considerations Week Beginning July 3, 2017”

  • Note: Download Slide Show for charts and expanded details, Click Download Link

This Week’s Select Summary Considerations:

  • 10-Year US Treasury Yield:
    • The 10-Year US Treasury Yield needs to finish the countertrend move started the week of July 3, 2017 from 2.14 to 2.31
    • We enter the week with the 10 Year US Treasury Yield slightly bearish with a potentially higher yield (trend presently remains bullish or lower yield)
    • Demand, Economic Weakness, Event Risk Concerns, or Other Market Concerns/Factors will likely take yields lower to 2 or below before significant move higher
  • US Dollar Index:
    • In search of a bottom with a couple of options being 95 area (basically achieved) or 92
    • Big Picture: The dollar has a bullish bias given global economic, social, political and military challenges
    • Unless Middle East, North Korean, European, other anomaly events start to dominate market participant decisions for a period, then we are still DEFINING a trading range 95 -104
  • CRB Index:
    • Most likely this index at the very least needs to revisit previous lows
    • Caution is advised since global economic uncertainties remain problematic
    • Bigger Picture: Though spastic global macro and growth forces in general remain supportive of the commodity sector
  • $WTIC Light Crude Oil:
    • Likely assume Bearish until $48 holds as support
    • Complex and volatile market
    • Fundamentals have overridden OPEC verbal guidance and an array of other factors
    • Fundamentals and other factors now suggest consideration of a possible price move below $41
  • Soybeans:
    • The bottoming process likely has not yet completed, a retest of the $9.00 area or lower a possibility
    • A price move through $9.70 opens the door to higher prices
    • A resumption of commodity index weakness, a likely function of fundamentals and Fiscal and Monetary Policy and Global Economic Uncertainties, could translate into a price move to $8.35 or lower
  • Corn:
    • Appears the correction of the upside move has completed with potential higher prices
    • Cautionary Note: Sustained oil price weakness could possibly be problematic for corn prices
  • Long Grain Rice:
    • Bullish bias remains
    • This is a highly complex market with an array of factors impacting price from 2016-2017 fundamentals; 2017 acreage, production and quality uncertainties; present underlying aggregate commodity sector dynamics; problematic global economic momentum, geopolitical uncertainties, and/or global agronomic outlook
  • Cotton:
    • Prices need to hold current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents or lower
  • Wheat:
    • Price potential to $5.51 almost achieved
  • SPY SPDR S&P 500 ETF:
    • A cautionary time period
    • Allow price action to provide guidance
  • QQQ NASDAQ Power Shares:
    • A cautionary time period
    • Allow price action to provide guidance
  • EFA iShares ETF - Global Equities Excluding U.S. and Canada:
    • A cautionary time period
    • Allow price action to provide guidance
  • EEM iShares ETF, Emerging Market Equities:
    • A cautionary time period
    • Allow price action to provide guidance
  1. Bobby Coats is a professor in the Department of Agricultural Economics and Agribusiness, Division of Agriculture, University of Arkansas System. E-mail: [email protected]

DISCLAIMER-FOR-EDUCATIONAL-PURPOSES

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