Bobby Coats and Bert Greenwalt attend Ag council of Arkansas meeting
Bobby Coats and Bert Greenwalt, agricultural economists with the University of Arkansas and Arkansas State University, catch up at the Agricultural Council of Arkansas annual meeting in Little Rock.

Rice, corn bullish; soybeans, cotton searching for bottom

Watch price actions for crops such as cotton because of possibility for slide into 2016 lows.

(Note: To view this week’s charts, click on the download button below.)

What to expect from the markets this week

Market “Near Term” Snap Shot:

  • 10-year Treasury Yield: Remains Bullish: We enter the week with the 10 Year US Treasury Yield slightly bullish with a potentially lower yield (trend presently remains bullish or lower yield)
  • S&P 500: Near term cautiously bullish  
  • Global Equities: Near term cautiously bullish
  • U.S. Dollar: Remains Bearish: For a period the dollar should have more weakness than strength.  
  • Oil $WTIC: Remains Bearish:
    • Complex, geopolitically charged market filled with price uncertainty
    • The immediate question: Will current price level hold for a period?
  • Commodity Index: This index should be in a bottoming process   
  • Corn: Correcting upside move before moving higher toward the $4.55 area
  • Wheat: Price potential to $5.51 remains a possibility
  • Soybeans: In search of a bottom at current levels or the $8.35 area   
  • Rice: Bullish bias remains
  • Cotton: Another important week for cotton. Prices need to hold current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents   

In addition to the following “Expanded near Term Market Considerations Week Beginning June 26, 2017”

  • To download slide show for charts and expanded details, click download button below.

This Week’s Select Summary Considerations:

  • 10-Year US Treasury Yield:
    • We enter the week with the 10 Year US Treasury Yield slightly bullish with a potentially lower 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
    • Near term the yield curve is flattening
  • US Dollar Index:
    • Remains Bearish: For a period the dollar should have more weakness than strength
    • Big Picture: The dollar has a bullish bias given global economic, social, political and military challenges
    • Unless Middle East, North Korean, European or other anomaly events start to dominate market participant decisions for a period, then we are still DEFINING a trading range 95 -104
  • CRB Index:
    • Near-term bottom possibly forming
    • 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:
    • 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
    • Saudi Arabia, OPEC, other oil producers and others have major role in limiting 2017 price downside
    • As always, remain focused on the bigger “Geopolitical Picture and Building Military Friction”
  • Soybeans:
    • In search of a bottom in the $9.06 area
    • A resumption of commodity index weakness, a likely function of fundamentals and Fiscal and Monetary Policy and Global Economic Uncertainties, could translate into a final price low at $8.35 or lower
  • Corn:
    • Correcting upside move before moving to new highs
    • 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:
    • Another important week for cotton. Prices need to hold current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents
  • Wheat:
    • Price potential to $5.51 remains a possibility
  • SPY SPDR S&P 500 ETF:
    • Near term cautiously bullish
    • Allow price action to unfold
    • Larger trend remains up
  • QQQ NASDAQ Power Shares:
    • Near-term cautiously bullish
    • Momentum driven by a select few technology stocks
    • Allow price action to unfold
    • Trend remains up
  • EFA iShares ETF - Global Equities Excluding U.S. and Canada:
    • Cautiously bullish
    • Trend remains up
  • EEM iShares ETF, Emerging Market Equities:
    • Entering a cautionary period
    • Trend remains up
  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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