Describing the performance of stocks, bonds and commodities the past five sessions as a week of, “frog walkers’ would be fitting, suitable and appropriate. In my column from July entitled “Frog Walker Time” I wrote: “One of my all-time favorite songs is a saddle song entitled, ‘The Strawberry Roan’ composed by Curley Fletcher, an American composer of cowboy songs and cowboy poetry. The classic cowboy song, ‘The Strawberry Roan’ was written in 1915. Curley passed away in 1954.”

And I went on to write, “Over the years, I have referred to, ‘Strawberry Roan’ often when markets become volatile, unpredictable and so difficult to trade that I dub them ‘frog walkers.’ Curley Fletcher dubbed that strawberry roan a ‘frog walker,’ a, ‘regular outlaw.’ The, ‘worst bucker’ on the range. Strawberry could, ‘turn on a nickel and give you some change.’ He would, ‘hit on all fours and goes up on high’ leaving the rider, ‘spinning up there in the sky.’”

Here are just a few of the events that unfolded this week that led me to describe many markets as, “frog walkers.” “First, the Tyson beef processing plant in Holcomb, Kansas, which slaughters about 30,000 head in a five day week, 6% of all cattle processed in the US, was severely damaged by fire. It will take months to repair. That news hit on a Saturday with the cattle futures market not scheduled to open until Monday.

The loss of the Tyson plant was bearish for cattle prices because a significant over-supply of cattle was not slaughtered for market. On Monday, cattle and feeder cattle futures opened limit down and Tuesday, as well. August feeder cattle fell nearly $13 from the Friday high to the Tuesday low. It was one of the largest declines in history for cattle and feeder cattle futures in such a short period. Two days, to be exact.

On Monday, the USDA released its “do-over” report regarding acres and ending stocks for grains. I thought the report would be bullish for corn. Instead, the USDA came out with a report that was shockingly bearish for corn but surprisingly bullish for soybeans. The USDA did not lower corn acres as much as most expected but it pegged soybean acres at a 12-year low. I cannot recall the last time soybean acres slipped to a 12-year low!

When the grain data hit the wires, corn prices fell down the limit of $.25 and then lost another $.15 over the next few sessions. At the same time as corn being limit down, so were cattle and feeder cattle futures. I have been in the futures industry for nearly 125 years, give or take a bit. I cannot recall a day when corn and cattle futures were locked limit down at the same time. Talk about a frog walker!

The next day, Wednesday, was historically bearish for the Dow Jones adding it to the long list of frog walkers for the week. The Dow turned lower when it was announced that Wall Street’s most widely watched gauge for a coming recession, the slope of yield curve, inverted. Simply put, yields on the 30-year U.S. Treasury bond fell to the lowest levels in history. It was the clearest sign to date that the U.S. is set to face another recession.

A CNBC News headline blared, “Dow tanks 800 points in worst day of 2019 after bond market sends recession warning.” At the close, the Dow Jones was down 800 points, it’s worst percentage drop of the year and the fourth largest point drop of all time. The Dow did just as poorly as corn and cattle!

Amid the carnage taking place in the U.S. ag markets, Agriculture Secretary Sonny Perdue was speaking at a farm show in Minnesota. Perdue said, “What do you call two farmers in a basement? A whine cellar!” According to Newsweek.com, “There was laughter but boos came as some members of the crowd did not find Perdue’s joke funny, just two days after China declared it would no longer buy any American agricultural products to hit back at Trump for imposing an additional 10 percent tariff on Chinese goods.”

Not only was this a week of frog walkers for stocks, bonds and commodities but that moniker can also be applied to Perdue, who finds humor in the economic pain and suffering of American farmers and ranchers. He is indeed a frog walker. And in my humble opinion, anyone who finds fun in a trade war is a frog walker, as well.

Trade wars are not fun, nor easy to win. Anyone that thinks otherwise does not know history. The economic damage being done to U.S. agricultural, farmers and ranchers is a travesty. The trade war is no longer simply uncomfortable. It is now scary.

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