What to expect from the markets this week, July 17, 2017: (To see charts with this analysis, click download button below.)

Market “Near Term” Snap Shot:

·         Rice: Bullish bias remains, but corrective price action desirable

·         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

·         Soybeans: Global macro forces possibly price supportive, a price move through $10.21 and holding opens the door to higher prices

·         Corn: An important week for price action, as long as corn remains above 3.69 given global economic dynamics this market is near term more bullish than bearish

·         Wheat: May be premature to be overly bearish wheat, soybeans and corn

·         10-year Treasury Yield: Bullish bias or lower yield

·         U.S. Dollar: In search of a bottom with a near term potential of 92 and possibly lower to 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? This week will provide additional guidance  

·         S&P 500: Prices still moving higher, but a cautionary time period

·         Global Equities: A cautionary time period, global dynamics remains supportive   

In addition to the following “Expanded near Term Market Considerations Week Beginning July 17, 2017”

·         Download Slide Show for charts and expanded details, Click Download Button below.

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 and possibly lower to 87

•      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:

•      Will global reflation efforts be enough to keep this index from revisiting previous lows? This week will provide additional guidance  

•      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:

•      Global macro forces possibly price supportive, 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:

•      An important week for price action, as long as corn remains above 3.69 given global economic dynamics this market is near term 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 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:

•      May be premature to be overly bearish wheat, soybeans and corn

•      $5.51 price target achieved, now price action needs to provide guidance

•      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:

•      A cautionary time period, global dynamics remains supportive     

•      Allow price action to provide guidance

•      EEM iShares ETF, Emerging Market Equities:

•      A cautionary time period, global dynamics remains supportive     

•      Allow price action to provide guidance

Dr. Bobby Coats is a professor in the Department of Agricultural Economics and Agribusiness, Division of Agriculture, University of Arkansas System. E-mail: [email protected].

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