Are cotton, soybean prices headed higher?
<p>Considering global risks and uncertainties, reflation expectations, and the quality of this hard-asset as a speculative investment, we must consider: 1. A trading range is being defined; 2. A price bottom is in place with higher highs and lower lows; or 3. We are still in search of a price bottom.</p><p>-- Bobby Coats on soybeans</p>
November 28, 2016
Chart 1. $UST10Y - 10-Year US Treasury Yield
Primary Consideration:
Near-term, the 10-Year Treasury likely consolidates, before searching for a higher yield possibly in the 2.75 to 3.00 area.
The Bond market topped (low yield) back in July anticipating that domestic and global fiscal policy stimulus activities (infrastructure, etc.) would be elevated to a level to compliment ongoing monetary policy and drive a higher level of global growth.
Trumpflation expected to be friendly to business (tax and regulatory relief), near term favors investing in equities and the dollar, followed by investments in commodities over bonds and utilities.
Charts 2 - 4. Soybeans
Primary Consideration:
Neutral Soybeans – Possible Trading Range Being Defined
Considering global risks and uncertainties, reflation expectations, and the quality of this hard-asset as a speculative investment, we must consider: 1. A trading range is being defined; 2. A price bottom is in place with higher highs and lower lows; or 3. We are still in search of a price bottom
Additional Thought:
Market participants appear to be building a risk appetite. If this market does not show weakness at $10.49, then shorts should be mentally vigilant of price action.
Charts 5 – 6. Corn
Primary consideration:
Neutral Corn
Coiling in preparation of making a major move either higher or lower. This market is similar to soybeans in that:
A trading range is being defined;
a price bottom is in place and potentially heading to $4.15; or
Still in search of a price bottom potentially at $2.75
Chart 7. Rice
Primary consideration:
Neutral Rice
Bottoming process underway
Chart 10. Cotton
Primary Consideration:
Bullish prices likely into the 84-cent area
Chart 11. Wheat
Primary Consideration:
Forming a price bottom
Price weakness into the $3.80 area a possibility
Chart 12. Copper
Primary Consideration:
Bullish
Corrective price action needed (not required)
Bullish until price action tells us otherwise
Chart 13. $WTIC
Primary Consideration:
Neutral - Light Crude Oil
Bullish above $52, but potential downside to $34 still remains
OPEC guidance likely defines price low near term
A challenging market for a number of economic and geopolitical reasons
Chart 14. CRB Index
Primary consideration:
If OPEC cannot provide bullish oil guidance by Nov. 30, this index will remain under downside pressure and select commodities will likely become highly speculative.
Charts 15 - 16. Power Shares US Dollar Index and Dow Jones Industrial Average,
Weekly Charts
Primary Considerations:
Dollar and Dow Jones Industrial's remain “Bullish”
Dollar running into fairly strong resistance; consolidation likely, but expect more dollar strength than weakness
Global Government and Central Bank intervention activities will define dollar strength or weakness over the next 3 to 12 months
Charts 17 – 18. Australian Dollar and ETF – EWA Equity iShares, Weekly Charts
Primary Consideration:
Neutral – Potentially Bullish, Australian dollar and equity market found support last week
Generally a weakening Australian currency implies weakening demand for their commodity based economy and vice-versa
Charts 19 - 20. Canadian Dollar and EWC (ETF) Equity iShares, Weekly Charts
Primary Consideration:
Canadian Equities showing signs of price strength, while Canadian Dollar softens
Canadian dollar weakness likely indicates lagging demand for Canadian commodities
Near term bearish indicator for their commodity prices in the aggregate
Charts 21 - 22. Canadian Dollar and EWC (ETF) Equity iShares, Weekly Charts
Primary Consideration:
Euro likely to have more weakness than strength near term, while the EuroNext 100 is neutral, but trying to capitalize on currency weakness
European Union economic weakness and political and social uncertainty problematic for the Euro currency
Charts 23 - 24. Japanese Yen Trust and ETF: EWJ (ETF) Equity iShares, Weekly Charts
Primary Consideration:
Expect more Yen currency weakness than strength, while the EWJ shows strength
Dollar shows strength, while the Yen shows weakness, presently and vise-versa
Charts Book Index – http://deltafarmpress.com/datasheet/weeks-commodity-and-financial-chart-analyses
Chart 1. $UST10Y - 10-Year US Treasury Yield, Monthly Chart, November 2014 – Nov. 25, 2016
Chart 2. Soybeans, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 3. Soybeans, Daily Chart, May 2016 – Nov. 25, 2016
Chart 4. Soybeans, Monthly Chart, May 2016 – Nov. 25, 2016
Chart 5. Corn, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 6. Corn, Daily Chart, May 2016 – Nov. 25, 2016
Chart 7. Rice, Weekly Chart, October 2013 – Nov. 25, 2016
Chart 8. Rice, Daily Chart, February 2016 – Nov. 25, 2016
Chart 9. Cotton, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 10. Cotton, Daily Chart, May 2016 – Nov. 25, 2016
Chart 11. Wheat, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 12. Copper, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 13. $WTIC, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 14. $CRB Reuters/Jefferies CRB Index, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 15. Power Shares US Dollar Index, Weekly Chart, November 2013 – Nov. 25, 2016
Chart 16. Dow Jones Industrial Average - iShares, Weekly Chart, August 2014 – Nov. 25, 2016
Chart 17. Australian Dollar, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 18. EWA - iShares, Weekly Chart, August 2014 – Nov. 25, 2016
Chart 19. Canadian Dollar, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 20. EWC - iShares, Weekly Chart, August 2014 – Nov. 25, 2016
Chart 21. EURO Trust, Weekly Chart, October 2013 – Nov. 25, 2016
Chart 22. EuroNext 100 Index, Weekly Chart, August 2014 – Nov. 25, 2016
Chart 23. Japanese Yen Trust, Weekly Chart, September 2013 – Nov. 25, 2016
Chart 24. EWJ - iShares, Weekly Chart, August 2014 – Nov. 25, 2016
Chart 25. EFA – iShares (Global excluding U.S. and Canada), Weekly Chart, November 2014 – Nov. 25, 2016
Chart 26. Emerging Markets (EEM – iShares), Weekly Chart, November 2014 – Nov. 25, 2016
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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