Sometimes the markets can be very cruel.
Think back a year ago today, when Lehmann Bros went belly up then sank to sleep with the fishes. That’s when my Dow Jones Industrial Average chart shows a slashing near-vertical line downwards, which flattened, fell, bounced, fell again into March 9, when it hit the near term bottom. That was a cruel day, exactly a year ago, for all those invested in the stock market.
And it was very cruel to those long commodities too – like farmers everywhere – because the collapse of the equities market took the already falling market and dragged them down to the pavement and kicked them in the teeth. Like equities they leveled, actually rose then fell again into the early March low, which became the double bottom.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
Since then the equity markets have rallied strongly – rising more than 50 percent – a rise that was not echoed in size by the ag commodities, which limped about 20-25 percent higher before falling back again.
Cruel.
Today’s a nice antidote to the recent slide in ag prices: markets are rocketing up. The electronic newsletters I read on the way to work were calling for wheat, corn and soybeans to all be up three to five cents. A little while ago, in between sorting out my calendar for the coming months, trying to get my expenses filed, grousing about that empty feeling in my belly where food should be (I’m on a minor diet), and reading about a boom and bust in the diamonds market (fascinating commodity!) I checked on the markets: soybeans up about 45 cents, corn 25 cents and wheat 12 cents. Golly! That’s a bunch more than three to five cents. And in a good way for farmers.
Perhaps it’s a commemoration for Lehmann. Perhaps its revenge on 2008’s cruel market that raised hopes so high and slammed them so low. Perhaps its a market echo of last year’s event. Or perhaps its because some weather forecasting outfits say next week’s projected cool weather might cause frost damage to late crops.
It doesn’t yet look like much on the weekly charts and could be just a blip and not a change of direction. But perhaps we’ll be lucky and look back on this as the The Day Things Turned Around for crop prices. Wouldn’t that be grand? Well, if it happens, farmers will get blamed for expensive cereals, inflation and the food versus fuel debate, because, after all, the market likes to be cruel, not kind. But I don’t think farmers would complain, because a higher price with criticism is better than a lower price with love.
