What to expect from the markets this week, September 4, 2017
Market “Near Term” Snap Shot
- Rice: Bullish bias remains
- Cotton: Price needs to confirm that a bottom is in place, otherwise additional price weakness could resume given current global economic uncertainties
- Soybeans: Bearish bias remains, price discovery this week should be helpful in understanding if price action is corrective, and we can expect lower prices or a bottom is in place
- Corn: Bearish with a bottoming process underway
- Wheat: Strong resistance headwinds imply continue giving consideration to prices returning to their 2016 low of $3.90 or lower
- 10-year Treasury Yield: Yield Sideways-to-Down
- S. Dollar: Corrective activity of the recent ongoing decline is underway, before likely resuming its downside move to 87 or lower
- Oil $WTIC: Trading range $43 to $52 with this week’s prices more bearish than bullish
- $CRB Commodity Index: Government, Central Bank, other intervention certainly creating commodity market uncertainty. Do not rule out a revisit to previous index lows during this period of global consolidation. That said, this index is building a base to move higher
- S&P 500: A cautionary time period with momentum waning
- Global Equities Excluding U.S. and Canada: Cautionary period, but attempting to regain momentum
- Feeder Cattle: Consolidating before moving higher
In addition to the following “Expanded near term market outlook considerations for week beginning Sept. 4, 2017:”
- Click on download button below to download slide show for charts and expanded details. (Click download link)
This week’s select Summary considerations:
- 10-Year US Treasury Yield:
- Yield Sideways-to-Down: We enter the week with the 10 Year US Treasury Yield slightly bullish with a potentially lower yield
- What could continue to move the yield lower? Demand, Economic Weakness, Event Risk Concerns, or Other Market Concerns/Factors could take the yield lower to 2 or below before a move higher
- If the yield moved above 2.75 then some consideration would need to be given to a change in trend
- Big Picture: This is a market that likely moves sideways for a few years and even revisits the previous low or lower
- S. Dollar Index:
- Bearish – Possible corrective activity, but breaking support at 92.56 opens the door for a likely 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:
- The question in search of an answer: What is the near term impact of Government and Central Bank intervention globally on economic activity? Do not rule out a revisit to previous index lows during this period of global consolidation. That said, this index is building a base to move higher
- Caution is advised since global economic, social, political and military uncertainties remain problematic
- $WTIC Light Crude Oil:
- Sideways choppy price action with this week’s prices more bearish than bullish
- 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:
- An important short week for market price discovery, assume bearish until price action proves otherwise
- Given seasonal complex global macro challenges, as previously stated assume until price action proves otherwise that the bottoming process has not yet completed, and a retest of the $9.00 area or potentially lower into the $8.35 area is still a possibility
- 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:
- Bullish bias remains, but keep peripheral vision on potential near term uncertain global economic crosscurrents related to currencies, bonds, equities and commodities as they go through a rebalancing process
- Cotton:
- An important short week, price needs to confirm that a bottom is in place, otherwise additional price weakness could resume given current global economic uncertainties
- Wheat:
- Presently strong resistance headwinds, in this aggregate market seasonality period give consideration to prices returning to their 2016 low of $3.90 or lower
- SPY SPDR S&P 500 ETF:
- A cautionary time period with momentum waning
- Allow price action to provide guidance
- QQQ NASDAQ Power Shares:
- Near term remain cautious of this index with momentum slowing
- Allow price action to provide guidance
- EFA iShares ETF - Global Equities Excluding U.S. and Canada:
- A cautionary time period of consolidation or even a correction
- 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.
DISCLAIMER-FOR-EDUCATIONAL-PURPOSES
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