Cotton and grain bags shown in northeast Arkansas field.
The diversity of Arkansas crops is shown in this field with cotton in the foreground and grain bags in the distance in 2016.

Wheat target of $5.51 per bushel achieved as markets seek direction

While wheat moves to higher target, jury appears to be out on direction of other commodities.

What to expect from the markets this week, July 10, 2017

Note: To see this week’s commodity charts, click on the download button below.

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 2.39
  • 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: Volatility rules and likely assume bearish until $48 holds as support
  • Commodity Index: Most likely this index at the very least needs to revisit previous lows
  • Corn: Important week for defining near term price strength with near term upside potentially $4.55
  • Wheat: $5.51 price target achieved, waiting on price guidance
  • Soybeans: A price move through $10.21 and holding opens the door to higher prices
  • Rice: Corrective price action needed before moving higher
  • 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 10, 2017. Note: See slide show by click on download button below.

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 June 26, 2017 from 2.14 to 2.39
    • We enter the week with the 10 Year US Treasury Yield slightly bearish with a potentially higher yield (larger trend presently remains 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 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 in search of a low for the dollar
  • CRB Index:
    • Most likely this index at the very least needs to revisit previous lows
    • Caution is advised since global economic, social, political and military 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 to $41 or lower
  • Soybeans:
    • 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:
    • Appears the correction of the upside move has completed with potential higher prices with near term upside consideration to $4.55
    • 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:
    • $5.51 price target achieved, now price action needs to provide guidance
  • 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

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish