Soybeans regaining bullish momentum, closing above $10

What to expect from the markets this week, September 25, 2017

Market “Near Term” Snap Shot

• Rice: Price action appears to be corrective
• Cotton: Cautiously Bullish
• Soybeans: Regaining bullish momentum, closing above $10.22 and holding implies a likely price bottom in place
• Corn: Bearish with a bottoming process underway
• Wheat: Holding current price levels implies a building bullish bias
• 10-year Treasury Yield: Sideways-Trading-Range on expectation of U.S. and Global fiscal simulative activities like corporate and individual tax relief and expectations of Fed balance sheet reduction
• S. Dollar: Bearish – Possible corrective activity likely, then the door will open for a decline to 87 or lower
• Oil $WTIC: Consideration now needs to be given to a near-term price floor being in place. The ongoing sideways choppy price action may be more bullish than bearish this week. The $45 to $50 trading range giving way to an upside potential of $55 or higher.
• $CRB Commodity Index: Cautiously optimistic as this index builds a base to move higher
• S&P 500: Primary trend remains up, but cautionary time period with momentum waning and consolidation needed
• Global Equities Excluding U.S. and Canada: Primary trend remains up, but a cautionary time period with momentum ever so slowly declining
• Feeder Cattle: Moving higher   

In addition to the following “Expanded near term market outlook considerations for week of Sept. 25.”

• Download Slide Show for charts and expanded details, Click download button below

This Week’s Select Summary Considerations:

• 10-Year US Treasury Yield:
  • The 10-Year US Treasury Yield: Sideways-Trading-Range on expectation of U.S. and Global fiscal simulative activities like corporate and individual tax relief and expectations of Fed balance sheet reduction
  • What could move the yield lower? Demand, Economic Weakness, Event Risk Concerns, or Other Market Concerns/Factors could take the yield lower
• S. Dollar Index:
  • Possible corrective activity likely, but once complete the door is open for a decline to 87 or lower
  • Given global macro considerations coupled with no significant global anomaly event moving forward this index may have some serious weakness
  • Unless Middle East, North Korean, European, Venezuelan or other anomaly events start to dominate market participant decisions, then we are still in search of a low for the dollar
• CRB Index:
  • Cautiously optimistic as this index builds a base to move higher
  • Global government and Central Bank actual and anticipated intervention are giving every indication of bearing fruit
  • Bigger picture: Though dangerously spastic, global macro and growth forces in general remain supportive of the commodity sector
• $WTIC Light Crude Oil:
  • Consideration now needs to be given to a near term price floor being in place. The ongoing sideways choppy price action likely more bullish than bearish this week. The $45 to $50 trading range giving way to an upside potential of $55 or higher.
  • A complex, volatile and an uncertain market that deserves a great deal of respect in a world with building economic, social, political and homeland security uncertainties
  • North Korea, market structure, geopolitical considerations and building possibilities of a Venezuelan civil war are just some of the supportive factors
• Soybeans:
  • Regaining bullish momentum, closing above $10.22 and holding implies a likely price bottom in place
  • Given improving complex global macro forces a retest of the $9.00 area or potentially lower into the $8.35 area is becoming increasingly less likely
• Corn:
  • Assume bearish until price action becomes more supportive of a bullish case and give consideration to prices moving to their previous 2016 lows of $3.15 or below
• Long Grain Rice:
  • Price action appears to be corrective
  • Remain aware of potential near term uncertain global economic crosscurrents related to currencies, bonds, equities and commodities as they go through a rebalancing process
• Cotton:
  • This week may determine if the bullish bias remains with a price consideration of 91 cents
• Wheat:
  • Holding current price levels implies a building bullish bias
• SPY SPDR S&P 500 ETF:
  • Primary trend remains up
  • A cautionary time period with momentum waning and consolidation needed
  • Allow price action to provide guidance
• QQQ NASDAQ Power Shares:
  • Consolidation needed
  • Near term remain cautious of this index with momentum slowing
  • Allow price action to provide guidance
  • Primary trend remains up
• EFA iShares ETF - Global Equities Excluding U.S. and Canada:
  • Primary trend remains up
  • A cautionary time period with momentum ever so slowly declining
  • 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: recoats@uark.edu.

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