Round cotton modules line Arkansas field

Soybeans regaining bullish momentum, closing above $10

This week may determine if cotton's bullish bias remains with a price consideration of 91 cents.

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: [email protected]

DISCLAIMER-FOR-EDUCATIONAL-PURPOSES

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