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