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Wheat target of $5.51 per bushel achieved as markets seek directionWheat target of $5.51 per bushel achieved as markets seek direction
While wheat moves to higher target, jury appears to be out on direction of other commodities.
Bobby Coats
July 10, 2017
3 Min Read
The diversity of Arkansas crops is shown in this field with cotton in the foreground and grain bags in the distance in 2016.
What to expect from the markets this week, July 10, 2017
Note: To see this week’s commodity charts, click on the download button below.
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 2.39
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: Volatility rules and likely assume bearish until $48 holds as support
Commodity Index: Most likely this index at the very least needs to revisit previous lows
Corn: Important week for defining near term price strength with near term upside potentially $4.55
Wheat: $5.51 price target achieved, waiting on price guidance
Soybeans: A price move through $10.21 and holding opens the door to higher prices
Rice: Corrective price action needed before moving higher
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 10, 2017. Note: See slide show by click on download button below.
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 June 26, 2017 from 2.14 to 2.39
We enter the week with the 10 Year US Treasury Yield slightly bearish with a potentially higher yield (larger trend presently remains 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 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 in search of a low for the dollar
CRB Index:
Most likely this index at the very least needs to revisit previous lows
Caution is advised since global economic, social, political and military 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 to $41 or lower
Soybeans:
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:
Appears the correction of the upside move has completed with potential higher prices with near term upside consideration to $4.55
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:
$5.51 price target achieved, now price action needs to provide guidance
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]
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