According to John Adams, July 2, 1776, was Independence Day. Following generations decided it should be July 4.For the record, Canada Day is July 1, and yes there is an interesting connection.
Thursday morning will see the release of June employment numbers. Will these leave the US White House “burning”, or support US Fed puppet Warsh's less hawkish comments from Wednesday.
As for the Grains sector: King Corn is quiet, Watson could be getting interested in the Wheat sub-sector, and Soybeans are the more fundamentally thanks in large part to the soybean oil market.
Morning Summary: I’ve used Barchart’s stock photo titled “The White House at Sunset” a number of times, usually to depict fury coming from the inhabitant at the domestic or global development of the day. Why? To me the picture looks like the White House is on fire. When I first saw it years ago, it reminded me of the scene from the 1996 movie Independence Day when aliens blew up the White House. It’s fitting to talk about Independence Day today, for as John Adams famously said, “The second day of July 1776 will be the most memorable epocha in the history of America. I am apt to believe it will be celebrated by succeeding generations as the great anniversary festival.”[i] My friends in Canada have their own celebratory Day on July 1. To them I offer a belated Happy Canada Day. Before I get to markets, I’ll mention the connecting thought to all this: Canada burned the US White House during the War of 1812 in retaliation for the American “looting and burning of York (present-day Toronto).[ii] Okay, a look at the quote screen early Thursday morning shows the US dollar index ($DXY) under pressure ahead of the June jobs data. Despite this, both Metals and Energies are in the red as well pre-dawn.
Corn: The corn market was in the green, though overnight trade volume was moderate-to-light once again. The September issue (ZCU26) rallied as much as 2.75 cents with 15,000 contracts changing hands and was up 2.25 cents at this writing. The more heavily traded December issue (ZCZ26) also gained as much as 2.25 cents on trade volume of 26,000 contracts and was sitting 1.75 cents in the green to start the day. Years gone by saw the US July 4 holiday be a pivotal turning point for new-crop corn. Old seasonal charts showed the December issue tended to post a high weekly close around the holiday (if memory serves me right) before trending down through harvest. However, times have changed, with the latest seasonal studies showing Dec corn flattening out after a late spring to early summer selloff. Today’s weather forecast shows nearly all of the US Plains and Midwest getting some sort of rain with the heaviest amounts stretching from the Northern Plains across Minnesota, Wisconsin, and northern Iowa. The latest 6-to-10-day outlook (July 7 to 11) also calls for above normal precipitation for most growing areas. As the combination of the Wilhelmi Element and Goldilocks Principle tell us[iii], let’s see how the market closes the trading week. (Markets are closed Friday for the July 4 holiday, despite John Adams thoughts on the matter.)
Soybeans: The soybean market was also higher early Thursday morning. The November issue (ZSX26) posted an 8.0-cent trading range, from down 1.75 cents to up 6.25 cents on still light trade volume of 16,000 contracts and was sitting 5.5 cents higher at this writing. Fundamentally, soybeans are more bullish than either corn or the wheat sub-sector, due in large part to the continued strength of domestic crush demand reflected in soybean oil’s inverted forward curve. Speaking of crush, USDA released its May number Wednesday, coming in at 213 million bushels and putting the 2025-2026 total at 1.998 billion bushels. The total was up 8% from last year at this same time, with the pace projection coming in at 2.647 bb. Recall USDA upped its 2025-2026 crush projection to 2.65 bb in the June WASDE report, also up 8% from last year’s reported crush of 2.445 bb. A look back at Wednesday’s settlement and we see the Nov-January futures spread covered a neutral 52% calculated full commercial carry with the January-March covering a bullish 28%. A year ago this week, the previous editions of these same spreads closed covering 55% and 43% respectively.
Wheat: The wheat sub-sector was in the green pre-dawn with most of the activity again in SRW. Here we see the September issue (ZWU26) up 2.25 cents after posting a 7.0-cent trading range, from down 3.0 cents to up 4.0 cents while registering 9,700 contracts changing hands. Heading into the last trading day of the week, September is up about 12.0 cents from last Friday’s close, in position to complete a bullish reversal pattern on its weekly chart. What does this mean? Possibly nothing given Watson doesn’t use classic technical patterns. That being said, September also has oversold momentum numbers while its volatility has continued to die down. These numbers do interest Watson and could lead to a round of short-covering. Recall funds held a net-short futures position of 48,410 contracts as of Tuesday, June 23, then finished the latest Tuesday-to-Tuesday noncommercial positioning week 7.75 cents lower indicating the net-short futures position increased. Over in HRW we see the September issue (KEU26) up 1.0 cent after adding as much as 3.0 cents overnight on still light trade volume of 2,200 contracts. As with its SRW cousin, the September HRW issue is in position to complete a bullish technical reversal pattern on its weekly chart at today’s close.
[i] In his book “John Adams”, author David McCullough wrote, “So, it was done, the break was made, in words at least: on July 2, 1776, in Philadelphia, the American colonies declared independence.” (page 129)
[ii] Yes, I know, it was actually British troops as Canada was still a British colony in August 1814, when the attack on the US White House occurred. But I like the legend better. As James Stewart famously said in the 1962 movie The Man Who Shot Liberty Valance, ”When the legend becomes fact, print the legend.”
[iii] The Wilhelmi Element: The only price that matters is the close. The Goldilocks Principle: Daily charts are too hot, monthly charts are too cold, but weekly charts are just right.
On the date of publication, Darin Newsom did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
