Rushing to the scene of a tragic railroad accident, paramedics converged on a ditch full of broken and bleeding bodies. One young emergency worker blurted out in horror, “How in the world did this happen?”
From the bottom of the pile of agony, groaned a painful voice: “What we thought was the light at the end of the tunnel turned out to be an oncoming train.”
This old, macabre joke reflects real fear within the cattle market this week. Just when producers and analysts seemed to be gaining confidence that the mysterious price implosion of September was set to be erased by the return of fourth-quarter sanity, the wheels of the market have suddenly resumed a dangerous wobble.
For example, spot December live futures have been trapped this week in state of near-panic selling, retreating more than $11 from the high of the last trading session of October. While feedlot cash remains poorly established as of this writing, some live business in parts of Nebraska and Iowa has been marked as much as $6-$7 lower than last week.
No, one tough week does not a disaster remake. Yet given the size, abruptness, and out-of-nowhere nature of early November problems, it’s not surprising that many are dreading the return of the early fall nightmare. I mean it’s not like anyone could make a convincing case in the middle of last month’s recovery that any market problem had been “fixed.”
Hell, I never thought bears made much of a reasonable, late-summer case that anything was “broken.” But that didn’t stop them from slamming the per cwt value of finished steers and heifers by $33 in just eight weeks.
Whether serving the forces of good or evil, market psychology can be as inexplicable as it is powerful. While the jury remains out on this week’s specific verdict, this much we know.
For more of John’s commentary, visit http://feelofthemarket.com/…
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