Tech Talk – On the Spot – December 20, 2023

In this episode of Tech Talk, Andy and Cody discuss spot whey, cheese, butter, and nonfat.

Questions or comments? Charts you’d like to see? Contact us at Insights@Ever.Ag, or give us a call at (312) 492-4200.

Charts sourced from Ever.Ag Platform.

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00;00;00;17 – 00;00;08;25
VOICEOVER
Future trading involves risk and it’s not suitable for all. Investor contact provided in the statement is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;08;27 – 00;00;09;18
CODY
Hello everybody.

00;00;09;18 – 00;00;19;27
ANDY
Welcome back to the last episode of Tech Talk for 2023. I’m Cody from Wheaton, Illinois. Mr. Anti following Queen Eddie.

00;00;19;27 – 00;00;22;12
CODY
I am. Well, how are you doing?

00;00;22;13 – 00;00;23;22
ANDY
I’m in. I’m doing well.

00;00;23;22 – 00;00;30;26
CODY
Rounding out 2023, I got the vintage the vintage gear on saying the old.

00;00;30;26 – 00;00;32;10
ANDY
Jimmy Rice dairy, sweatshop.

00;00;32;11 – 00;00;35;20
CODY
These things. Greatness sets out a few battles, if you will.

00;00;35;22 – 00;00;37;00
ANDY
So got mine somewhere.

00;00;37;04 – 00;00;43;27
CODY
Speaking of Wheaton, I got the Spartan bag fly or Spartan Flag fly in there in Illinois.

00;00;43;28 – 00;00;48;29
ANDY
Just picked up a three star recruit right next to here. I mean, pretty much right down the road from your Wheaton.

00;00;49;01 – 00;00;52;09
CODY
From Wheaton, that quarterback. See how it goes.

00;00;52;11 – 00;00;56;19
ANDY
National champs, 20, 24, 2025. Excuse me. Here to here first.

00;00;56;21 – 00;01;03;12
CODY
We didn’t bets on that or like, what’s going on? Is it like I don’t I do I just get the field and like you get Michigan State Sure.

00;01;03;15 – 00;01;03;21
ANDY
Whatever.

00;01;03;21 – 00;01;09;24
CODY
You want. I got to timestamp something here so I get the field. You get Michigan State National champs straight up.

00;01;09;26 – 00;01;10;10
ANDY
Straight out.

00;01;10;15 – 00;01;16;22
CODY
Here. The time stamp on that ice time stadium. That’s sweet. Give me something to look forward to.

00;01;16;24 – 00;01;17;02
ANDY
All right.

00;01;17;02 – 00;01;25;02
CODY
Well, at Anschutz, that and charts come up all around in this year out with some interesting charts all spot all the time I think is what we’re talking about here.

00;01;25;09 – 00;01;27;10
ANDY
I’ll spot charts to round off the end of the year, and we’re.

00;01;27;10 – 00;01;29;22
CODY
Going to do them in order to write. And so.

00;01;29;28 – 00;01;31;07
ANDY
In order of how they trade.

00;01;31;07 – 00;01;38;03
CODY
In order to parlay trades away cheese butter in the not fat, what do you think you perfect what do you think this is way weekly basis.

00;01;38;07 – 00;01;44;12
ANDY
Weekly way stagnant here. I mean it really starts looking like it’s starting to roll over here.

00;01;44;14 – 00;01;53;04
CODY
I was going to say so I would agree. And it looks like it’s it’s maybe it was this a double top or not even a double top. It’s a failure to make a new high. And.

00;01;53;07 – 00;01;55;09
ANDY
Yeah, yeah.

00;01;55;11 – 00;01;59;21
CODY
That’s a no Gouda. As I think Leslie Nielsen said.

00;01;59;23 – 00;02;07;18
ANDY
It really showed on here for the past couple of sessions we’ve had between what 120 trades for the past week, week and a half. And today I think we had five.

00;02;07;20 – 00;02;24;19
CODY
Starting to see some volume. I mean we got to $0.40 and then just started to, like I said, failed to put in a new high. Right. And you’re starting to see some of the other stuff like, you know, the RSI got didn’t get into overbought territory, was awfully close. Look at how close that was. I mean that is just like that’s right there.

00;02;24;19 – 00;02;46;18
CODY
But to see that roll over, that’s another like and momentum to take a piece of that. So again some stuff those trade technically you can make that argument right And when I say stuff I mean like the secondary indicators. And so this is kind of crudely drawn, but it seems like there was an uptrend that got broken here.

00;02;46;21 – 00;03;01;05
CODY
So not only was the uptrend broken in the momentum, but you have a failure to put in the new high here too. So it sure feels like I mean, how much does it roll over? I think you can make the argument it goes back kind of into this area, right? I don’t think it’s a tremendous move. We’ll see.

00;03;01;07 – 00;03;19;22
CODY
We’re starting to see a lot more cheese trade hands, too, right? Well, what today was today, another 11 barrels, I think, traded. So if we start to see maybe the more way that’s being produced is coming into the exchange as well. So this is this is an interesting one. Like I said, it’s it’s got it’s it’s got like the ability here.

00;03;19;22 – 00;03;27;16
CODY
It’s it’s trying to like roll over. To your point, do you think let me ask you this. Do you think we trade 35 first or do we trade our 45 first?

00;03;27;18 – 00;03;36;06
ANDY
I think based on this, I think we trade 35 first, 35, maybe a quick trip down to 30, 31 and then and then higher, probably the 45.

00;03;36;06 – 00;03;42;19
CODY
Promptly moving up. Okay. I would agree. I think I think we trade 35. We trade 40. Before we trade 45.

00;03;42;21 – 00;03;53;11
ANDY
I think we’ll see some more violent moves in way. Even if you go back to what we saw in July and even at the beginning of 2023, those are some some massive moves on a weekly chart right there.

00;03;53;11 – 00;04;16;07
CODY
That’s a big I mean, you think about on a class three basis as to what every penny and weighs $0.06 in class three. So going from 45 to 24, I’m ass ain’t that good. So 45 -24 is what, 21? Hmm. So 21 times six. Let’s do that math. 120. 126. So but 26 and class three from here to here, that’s a big number, right?

00;04;16;08 – 00;04;23;02
CODY
I mean, not move cheese at all. And you move your milk check. Costa Dairy milk check devalues by dollar 26.

00;04;23;04 – 00;04;23;20
ANDY
You move it.

00;04;23;21 – 00;04;24;27
CODY
That’s not good.

00;04;24;29 – 00;04;26;12
ANDY
The Why not so well.

00;04;26;15 – 00;04;45;14
CODY
Yeah, this looks like it wants to rollover I would agree trade 35 before it trades 45 so not that far away for settle 38 to. You know what let’s handicap a little bit do you think it trades 32 since we were in trade. 38 Right. It would be easier to make that bet for at $0.40. But since already at $0.30 you think a trade is 32 before it trades 45?

00;04;45;16 – 00;04;46;23
ANDY
I yes, I do that.

00;04;46;23 – 00;04;57;05
CODY
So. All right. 32 for 45. I agree with that also. So I think we do 32 before we trade 45 based on this chart. All right, cool. So next one. Oof!

00;04;57;08 – 00;04;59;00
ANDY
Earth kids.

00;04;59;02 – 00;04;59;14
CODY
What do you think?

00;04;59;14 – 00;05;18;05
ANDY
So I was going to ask you the same thing. So what I think we’re at a dollar 42 cheese after today for block and barely average, right? We’re not doing the block in the barrel cheese together. I believe we hit a dollar 40 before the end of this week. And I think we sit down at a dollar 35 for a little bit of time.

00;05;18;07 – 00;05;20;11
CODY
So we’re at 142.

00;05;20;14 – 00;05;23;23
ANDY
Because current cash, we have current cash $14.

00;05;23;25 – 00;05;26;26
CODY
By 1422 that’s using December way.

00;05;26;28 – 00;05;27;10
ANDY
Okay.

00;05;27;12 – 00;05;42;22
CODY
So that’s using 4135, which may be, you know, according to what we just looked at, 41, 35, maybe a shade higher. So maybe you’re probably more I guess if we’re to use like a 38 cent way you got a knock off was at 18 $0.20. So yeah, I’m really 14 bucks.

00;05;42;24 – 00;05;49;04
ANDY
As I said on my platform using spot everything spot. I’ve got 14 Armada 14.

00;05;49;06 – 00;06;11;12
CODY
On the dot 14 bucks as before any premiums. Check out bases loaded if you want to learn more about premiums and all that stuff and in the last and the trading or the expiration. But yeah I mean you had this gap and it’s been painfully moving its way towards there. I guess the question is like so what’s this high right here, this 139 So we need to go trade like a dollar 39 to go fill that gap.

00;06;11;19 – 00;06;33;07
CODY
I mean, seems reasonable. I mean, it seems like it’s certainly in the cards given the way that cash markets trading in the way they’re the volume they bring in. And I guess it’s a question of like, do we see like a July, you know, like one of these, right where we get down in that price level, maintain that price level for a few weeks, clear some stuff out, and then do we get a rally coming out of that?

00;06;33;10 – 00;06;47;11
ANDY
I think we get a rally coming out of it. It just feels a little bit different this time. It feels like we’re going to sit at a dollar 35, a dollar 44. You know, I don’t want to say weeks on end, but if you stayed on for two, three, four weeks and just kind of piddle around there, you’re much more apt to get product moving.

00;06;47;13 – 00;06;55;25
ANDY
And if you look at that same same time frame that you have in July right there, there was a lot of weather that dictated heat stress.

00;06;55;25 – 00;07;00;29
CODY
So yeah, that’s right. I forgot about that. We have like record and record highs here.

00;07;01;01 – 00;07;09;19
ANDY
Exactly. So I think there’s a little bit different mindset, a little bit different market mentality back then. Now it feels it just feels very different at this point.

00;07;09;19 – 00;07;29;00
CODY
Okay, fair enough. You were sweating back then. It was hot. Is hassles hassle? Well, I think we can agree that we’re going to fill this gap and then maybe we. But do we? I guess the other question is, do we go trade below this low 132 and a half, or do we maintain that price? I gut feeling I think we maintain that like we I think we failed to put in a new low.

00;07;29;02 – 00;07;29;26
ANDY
Wow. I mean.

00;07;29;26 – 00;07;31;13
CODY
Mr..

00;07;31;16 – 00;07;35;09
ANDY
Okay. So lower than that is you’re talking maybe.

00;07;35;14 – 00;07;36;07
CODY
Like a sub mark.

00;07;36;07 – 00;07;37;00
ANDY
That.

00;07;37;02 – 00;07;57;08
CODY
Looks like a sub 130 when you talk about like a once a sub 130 barrel and a like a 133 type block. Yeah. That’s, that’s just seems awfully low when we’re definitely starting to see more bidders popping up in the barrel like we’ve just seen like the stack bids like 37 on three, 38 on two, 36 on three and then trading a bunch like around 140 ish, 139.

00;07;57;08 – 00;08;23;11
CODY
So yeah, I think we feel this gap and we kind of have like more of these types of deals where it’s like you have gap lower maintain this right here is an interesting this is I believe this is a harami bullish Harami where you have a big red candle a green candle that sits inside of it. Right. This thing is totally within the range of the preceding candle and then you gap higher out of that.

00;08;23;13 – 00;08;32;02
CODY
That right there. I mean, it’s easy to say in hindsight, right? But I mean, at this this is a possibility too, this type of candle formation. I think we have to be really careful of that.

00;08;32;04 – 00;08;46;02
ANDY
So let me ask you, if we go down to a dollar 32, even a dollar 35, do you think we do the same thing that we did back in June-July where we rebound pretty fast? Or do you think we sit down there for a little bit of time at that dollar, $35, 40 ish a number?

00;08;46;02 – 00;09;04;23
CODY
I think we sit down there for longer than maybe what the market’s anticipating. Futures have a pretty healthy premium baked into them up front. Yeah, right. But I think we sit down there longer than maybe anticipated and then have a pretty aggressive pop out of it. If we were to just do a quick down up. I don’t know if that’s enough to really maybe it is.

00;09;04;23 – 00;09;21;01
CODY
Maybe it’s enough to get exports going or something, you know, some sort of new demand function that comes in. But I think the longer we sit down and stay down at this, like, let’s say we get it below 40 on average and stay there, I think that’s the type of stuff that we start to see a lot of volume get moved.

00;09;21;03 – 00;09;36;09
CODY
And the more volume that we move at a lower price, I think the more abrupt we rally out of it. So I think that’s what it’s going to take to break this trend here. We’ve been trading along this trend for since, what is this, August, late August, early September. I think that’s what we’re all we’re going to see is kind of this like rounding pattern.

00;09;36;09 – 00;09;52;00
CODY
And then you’re going to get like a wicked candle that takes us out of it. We shall see. You start to see some these other futures built in. Like I said, I mean, gosh, the Fed is at 160. We’re about to go trade 140, you know, So you’ve got premiums that are baked into the market trend tells I don’t know who knows.

00;09;52;02 – 00;10;02;07
CODY
But next up on the docket, your favorite shining star here. Look at this. Oh, my gosh. Yikes.

00;10;02;09 – 00;10;03;17
ANDY
Talk about a whipsaw this year.

00;10;03;17 – 00;10;13;05
CODY
So I had somebody asked me this yesterday, Are we going to do this again? Think, oh, it was a good time. That was I.

00;10;13;05 – 00;10;13;16
ANDY
Don’t think.

00;10;13;19 – 00;10;17;07
CODY
That was a big, heavy sigh.

00;10;17;09 – 00;10;23;29
ANDY
Because I was looking at I was going to ask you, so where your cursor is right there, what do you do with to what do you do it to gaps at about the same price at $3.

00;10;24;01 – 00;10;47;08
CODY
Two gaps, same price, $3, correct. Question I think to me that just says that. I mean, look at this right over here to right. The market does not like to be the market doesn’t like to sit still at $3. It’s a price that’s going to bring volatility. So I think you’d have to be prepared for that. But here, I mean, this is a price where the market has been pretty content on sitting still normally.

00;10;47;10 – 00;11;15;00
CODY
Like if you have we have this huge break, this is 348, basically 350 down to what is basically 250. Right. So you’re talking about a dollar break. And if all you see is kind of this like to you, to use your parlance, pitter patter, like just the sideways trade, the usually that is an indication that you’re going to get a continuation of the preceding move, which in this case would be lower.

00;11;15;03 – 00;11;33;00
CODY
I think that’s what’s going on. I think that’s what we’re going to see. I think. And I don’t think it’s going to be a big fall in a bid type move. I think what we’re going to see is just us go trade back down around this, like go test this low right. Go back to 25 two in that area.

00;11;33;00 – 00;11;53;27
CODY
Right. Because I think we need to go get back into this range here and see how this see how this trades. And so you’re like we’ve been kind of bumping up against the upper end of this. I think what’s going to happen is you’re going to get sideways trade that usually is like the bulls are. I mean, they can barely put up a fight after a dollar break.

00;11;53;27 – 00;12;16;25
CODY
That’s that’s not bullish. So then I think we just get back into this all this noise. But I do think we go and test that low. I think that would be to me, it feels like it would be a big surprise for the marketplace, too. You know, this had this big rally. It was corrected. Futures out forward are telling us we’re going to be a 260 market into perpetuity, it feels like right then you go to 57 out to like December.

00;12;16;25 – 00;12;33;16
CODY
You don’t you have to look at December of 24 before you get below to 50. Right. But I think what we ultimately see is just a consolidation that leads to a continuation. And we go test this low. I think that would be a surprise to the market. Well, I’d ask if you’re baking anything, but like, do you have an oven.

00;12;33;19 – 00;12;36;25
ANDY
Mean I have an oven. I just don’t use it for baking or anything else.

00;12;36;25 – 00;12;42;23
CODY
Really. You not supporting the butter? Cause like I’m working with butter. Use butter like at home.

00;12;42;26 – 00;12;43;18
ANDY
On the sticks.

00;12;43;25 – 00;12;54;14
CODY
Like you Syrians and butter you like put like a butter based on basis so you don’t have like multiple forks, but you are a baster of steaks, right?

00;12;54;16 – 00;13;00;28
ANDY
Just a general spoon of spoon. Draw the lucky contestant. Pick it up with terrible.

00;13;01;01 – 00;13;03;16
CODY
Always blush. Here’s a lucky one.

00;13;03;18 – 00;13;05;10
ANDY
So, yeah.

00;13;05;13 – 00;13;08;22
CODY
Now, man. All right, last one. Certainly not least.

00;13;08;24 – 00;13;10;13
ANDY
Let’s win at least nonfat.

00;13;10;16 – 00;13;19;16
CODY
I didn’t. We didn’t touch a thing here. By the way. We haven’t touched a thing, though. And I don’t even remember what this was. Cody’s test was you were.

00;13;19;23 – 00;13;23;09
ANDY
Was this three, three episodes ago when we were talking about nonfat?

00;13;23;09 – 00;13;24;14
CODY
I think so.

00;13;24;17 – 00;13;35;02
ANDY
I think we’re kind of testing that bottom 105 ish area and then rallying from there. But I think you had said here pretty soon, if you have that. Yeah, you sort of had drawn a breakout above to 23.

00;13;35;02 – 00;13;39;26
CODY
And so I think what we originally said was this was.

00;13;39;29 – 00;13;41;20
ANDY
An Elliott wave, right? That’s what we’re.

00;13;41;21 – 00;13;58;21
CODY
Correct. So this is wave one. You would take this and lay it on top of wherever it breaks out from. I think we like we said right here, and you’d add approximately 20%. Usually the third wave is the biggest and is usually 20. You know, you take whatever the first wave is and like multiply it by like one point to 1.3.

00;13;58;27 – 00;14;20;13
CODY
So I still think this is something to be mindful of. I don’t think you can say this is like failed until we get back down into like a 110 type number. I think you have to totally retrace the first wave to say that that’s not I guess, relevant and you really haven’t. And you’ve only like really retraced is this one 2124 easy math.

00;14;20;20 – 00;14;40;06
CODY
115 So there’s still I mean, you’ve got about half of this move retraced if that futures continue to point to like now this like you want to buy if you’re spot buy you should be buying in this break and others you want to add a carry into the futures. I get that per month. But this is this is acting like it wants to this.

00;14;40;08 – 00;14;43;25
CODY
I think this is still in play. I think we have to be really careful here.

00;14;43;28 – 00;14;50;23
ANDY
So I agree. So we’re both under the same premise that we could break out above a dollar. 23.

00;14;50;25 – 00;14;52;19
CODY
Is I still think maybe.

00;14;52;22 – 00;14;53;14
ANDY
Soon.

00;14;53;16 – 00;15;17;17
CODY
Direct. Like if you just look at the price action, it’s starting to kind of round itself out. So it’s it’s very slowly trying to retrace this. To me just looks like a wave two And then the third one is going to take us coincidentally to this area of retracement this like first like level 33%. Yeah, this to me it’s still what was that movie like from I think, Dumb and Dumber.

00;15;17;21 – 00;15;21;15
CODY
So you’re saying there’s a chance. So you’re telling me.

00;15;21;15 – 00;15;22;29
ANDY
There’s a chance.

00;15;23;01 – 00;15;24;21
CODY
I still think it’s there. So.

00;15;24;26 – 00;15;25;11
ANDY
Okay.

00;15;25;14 – 00;15;52;21
CODY
Cody’s test. We didn’t move it. We haven’t touched that 2024 spot markets coming in hot. Look further. Look for a rounding and see images. Get there Look for this Elliott wave to play out spot nonfat I guess way we think is going to 32 before it goes to trades 45 and then ipso facto butter as I still feel like to be surprise this market would be if if butter goes and trades to 20 I think it good spot with both hands especially through what we saw this past year.

00;15;52;24 – 00;15;55;07
CODY
But I think that that would be a surprise.

00;15;55;09 – 00;16;04;13
ANDY
So same kind of question. But do you think we stay down there long enough for us to you don’t see it being a seven month trend in butter like it was before? I don’t I.

00;16;04;16 – 00;16;20;05
CODY
I don’t think so. I think it will. Yeah. Good feeling as we go test that price. I just think we like perk back up and like the two forties and maybe we trade sideways around that level for a while but to go trade like a T 25 to 20 on the exchange in maybe the spot market, maybe futures maintain a premium to that.

00;16;20;05 – 00;16;37;10
CODY
That would surprise us. I think it’ll be a surprise to the market to see the spot market trade that price. Right I think it gets ultimately gets bought both hands so yeah not that this could get a little dicey here I guess flip side, what if this fails then I guess your target is, you know, it goes in 110.

00;16;37;10 – 00;16;43;17
CODY
Yes. So it gets back down to where it started to really break out from, which would be like 109 110.

00;16;43;19 – 00;16;44;05
ANDY
Right.

00;16;44;08 – 00;16;46;17
CODY
So like the Elliott wave coming in hot.

00;16;46;20 – 00;16;56;27
ANDY
Well, you know what? This is our last episode for TikTok this year, yet one another week and then we got into 2024. So New Year.

00;16;56;29 – 00;17;01;05
CODY
New not New Year, new. You given New Year’s resolution, by the way.

00;17;01;08 – 00;17;10;14
ANDY
I never do resolutions because they never pano and I never keep them long enough. I just try to be a better person, 1% better every single day.

00;17;10;16 – 00;17;16;12
CODY
Didn’t like your New Year’s resolution. Be that you actually keep a New Year’s resolution.

00;17;16;15 – 00;17;22;15
ANDY
But I just don’t do resolutions either. They just don’t work out. I just told myself, going to be better every single day. I mean.

00;17;22;17 – 00;17;33;20
CODY
We could do like a paradox where it’s like your New Year’s resolution is to, like, fail at your New Year’s resolutions so that if you fail at them, then you’ve actually accomplished a New Year’s resolution about that.

00;17;33;23 – 00;17;51;04
ANDY
I’m going to try to be nicer to you and Jim MATTHEWS this year. Next year. And you know what? We’ll see if we can get past Jan ten. All right. I don’t want to put my sights too high and we’re going to look far enough. And with that resolution, everybody, we appreciate you watching. Have a very merry Christmas and happy holidays.

00;17;51;11 – 00;17;56;16
ANDY
And even better New Year. And we will see you in 2024.

00;17;56;16 – 00;18;03;01
CODY
I’m looking forward to be nicer to me. Like, that’s just that’s that’s great. I’m excited finger personal. The whole thing right now.

00;18;03;03 – 00;18;05;15
ANDY
I mean like we’re not even into January and I don’t.

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