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.

Soybeans, corn, rice, wheat building price momentum

New Rice Webinar to feature update from USDA's Nathan Childs on U.S., world rice outlook for remainder of 2017 and into 2018.

What to expect from the markets this week, July 24, 2017

Market “Near Term” Snap Shot

  • Rice: Bullish bias remains, but corrective price action desirable
  • Cotton: Bottoming process underway
  • Soybeans: Corrective price action likely underway before moving higher, a price move through $10.21 and holding opens the door to higher prices
  • Corn: As long as corn remains above $3.69 given global economic dynamics this market is near term more bullish than bearish
  • Wheat: Likely premature to be overly bearish wheat, soybeans, corn, and rice
  • 10-year Treasury Yield: Bullish bias or lower yield
  • S. Dollar: In search of a bottom with a near term potential of 92 and increasingly likely lower to at least 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? Do not rule out a revisit to previous lows, but this index is building a base to move higher
  • S&P 500: Prices still moving higher, but a cautionary time period
  • Global Equities: Global dynamics remains supportive, but remain respective of market dynamics and volatility
  • Feeder and Live Cattle: Remain bullish

New Rice Webinar:

Date and Time: Thursday July 27, 2017 2:00 PM Central Time (US and Canada) 

Connect with Computer or Smart Phone by Internet or Dial-in and Listen by Phone

Host: Dr. Bobby Coats, Professor in the Department of Agricultural Economics and Agribusiness, University of Arkansas System, Division of Agriculture, Cooperative Extension Service. E-mail: [email protected]

Producer: Mary Poling, Coordinator for Interactive Communications, University of Arkansas System Division of Ag, Cooperative Extension Service, E-mail: [email protected]

  • Topic: U.S. Rice Supplies Expected to Tighten in 2017/18; U.S. Prices Projected Higher (45 minutes)

Presenter: Dr. Nathan Childs, Agricultural Economist with USDA’s Economic Research Service

Description: The June NASS Acreage report indicated a 20-percent decline in U.S. harvested rice area in 2017-18 to 2.5 million acres. Assuming trend yields, the U.S. rice crop is projected to drop 15 percent from a year earlier to 191.3 million cwt, pulling total supplies down 11 percent. Both domestic use and exports are projected to contract in response to the tighter supplies and resulting higher prices. Despite smaller use, U.S. stocks are expected to drop to a more normal level after three consecutive years of abnormally high ending stocks. Globally, rice trade is expected to increase, with China remaining the largest rice importer and India and Thailand remaining the largest exporters. Global rice stocks are projected to increase to the highest level since 2001-02.

  • Topic: Arkansas Rice Crop Update – (10 – 15 minutes)

Presenter: Dr. Jarrod Hardke, Associate Professor and State Rice Extension Agronomist, Crop, Soil & Environmental Science Department, University of Arkansas System-Division of Agriculture

Webinar Registration Link:

https://uaex.zoom.us/webinar/register/a2f76e5e2b748053d746f627e8486654

 

In addition to the following “Expanded near Term Market Outlook Considerations for Week Beginning July 24, 2017.”

  • NOTE: To see slide show for charts and expanded details, click on the download button at the bottom of this article.

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, but increasingly appears lower to 87
    • Near term some correction of downside move should be anticipated
    • Bottoming process may take longer than previously expected
    • Big Picture: The dollar has a bullish bias given global economic, social, political and military challenges, but present macro factors favor more dollar weakness than strength
  • CRB Index:
    • Will global reflation efforts be enough to keep this index from revisiting previous lows? Do not rule out a revisit to previous lows, but this index is building a base to move higher
    • 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:
    • Corrective price action likely underway before moving higher
    • Global macro forces possibly price supportive, a price move through $10.21 and holding opens the door to higher prices
  • Corn:
    • As long as corn remains above $3.69 given global economic dynamics this market near term is 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 2017-2018 beginning stocks; 2017 acreage, production and quality uncertainties; present underlying aggregate commodity sector dynamics; problematic global economic momentum, geopolitical uncertainties, and/or global agronomic outlook
  • Cotton:
    • Bottoming process underway
  • Wheat:
    • Global macro dynamics a key consideration in being overly bearish wheat, soybeans, corn and rice
  • 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:
    • Trend remains up
    • A cautionary time period
    • Allow price action to provide guidance
  • EEM iShares ETF, Emerging Market Equities:
    • Trend remains up
    • 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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