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

Possibly premature to be overly bearish wheat, soybeans, corn and rice

Bullish factors could help boost prices for the grains in days ahead.

What to expect from the markets this week, July 17, 2017: (To see charts with this analysis, click download button below.)

Market “Near Term” Snap Shot:

·         Rice: Bullish bias remains, but corrective price action desirable

·         Cotton: Prices need to continue holding current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents or lower

·         Soybeans: Global macro forces possibly price supportive, a price move through $10.21 and holding opens the door to higher prices

·         Corn: An important week for price action, as long as corn remains above 3.69 given global economic dynamics this market is near term more bullish than bearish

·         Wheat: May be premature to be overly bearish wheat, soybeans and corn

·         10-year Treasury Yield: Bullish bias or lower yield

·         U.S. Dollar: In search of a bottom with a near term potential of 92 and possibly lower to 87

·         Oil $WTIC: Likely assume Bearish until $48 holds as support

·         Commodity Index: Will global reflation efforts be enough to keep this index from revisiting previous lows? This week will provide additional guidance  

·         S&P 500: Prices still moving higher, but a cautionary time period

·         Global Equities: A cautionary time period, global dynamics remains supportive   

In addition to the following “Expanded near Term Market Considerations Week Beginning July 17, 2017”

·         Download Slide Show for charts and expanded details, Click Download Button below.

This Week’s Select Summary Considerations:

•      10-Year US Treasury Yield:

•      Bullish bias or lower yield

•      We enter the week with the 10 Year US Treasury Yield slightly bullish with a potentially lower yield

•      The larger trend remaining bullish or lower yield

•      Most likely 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 near term potential of 92 and possibly lower to 87

•      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 in search of a low for the dollar

•      CRB Index:

•      Will global reflation efforts be enough to keep this index from revisiting previous lows? This week will provide additional guidance  

•      Bigger Picture: Though spastic, global macro and growth forces in general remain supportive of the commodity sector

•      Between Fed off-again and on-again accommodation and/or misdirectional verbal guidance, building uncertainties surrounding fiscal, trade and regulatory policy simulative activities, the $CRB Commodity Index: a key economic indicator, has struggled

•      $WTIC Light Crude Oil:

•      Likely assume Bearish until  $48 holds as support

•      Complex and volatile market

•      Fundamentals are overriding OPEC verbal guidance and an array of other factors now suggest consideration of a possible price move to $41 or lower; that said being short this market has its challenges

•      Soybeans:

•      Global macro forces possibly price supportive, a price move through $10.21 and holding opens the door to higher prices

•      Assume until price action proves otherwise that the bottoming process has not yet completed, and a retest of the $9.00 area or lower is still a possibility

•      Corn:

•      An important week for price action, as long as corn remains above 3.69 given global economic dynamics this market is near term more bullish than bearish 

•      Cautionary Note: Sustained oil price weakness could possibly be problematic for corn prices

•      Long Grain Rice:

•      Bullish bias remains, but corrective price action desirable

•      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 continue holding current levels or otherwise consideration has to be given to revisiting the 2016 low around 55-cents or lower

•      Wheat:

•      May be premature to be overly bearish wheat, soybeans and corn

•      $5.51 price target achieved, now price action needs to provide guidance

•      SPY SPDR S&P 500 ETF:

•      Prices still moving higher, but a cautionary time period

•      Allow price action to provide guidance

•      QQQ NASDAQ Power Shares:

•      Technology continues to perform, remain cautious 

•      Allow price action to provide guidance

•      EFA iShares ETF - Global Equities Excluding U.S. and Canada:

•      A cautionary time period, global dynamics remains supportive     

•      Allow price action to provide guidance

•      EEM iShares ETF, Emerging Market Equities:

•      A cautionary time period, global dynamics remains supportive     

•      Allow price action to provide guidance

Dr. 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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