Cast your buttering vote here!
In this episode of Tech Talk, Andy and Cody discuss weekly CME cheese, weekly butter and Sep Soybeans.
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Charts sourced from Ever.Ag Platform.
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Future trading involves risk and not suitable for all investors. Content provided in this book is meant for educational purposes and is not a solicitation to buy or sell commodities.
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Hello everybody. Welcome back to another episode of Tech Talk. I am Cody, he is Andy. Together we make up the Tech Talk crew. It is almost the last day in May. We got one more. It is the 30th which is Thursday of May 2024. Tomorrow’s the last day and then we roll into June. How you feel about that?
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All in in the gym about that almost half of the year already on employment. Just like the last day of school today. It’s crazy Monday school around here. Yeah.
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So yeah okay. So now you’re on summer break. Big plans.
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Big plans. I don’t know about that. I can see why my parents are always, like, pissed about summer break. Agreed. You know, because it was like, what are you going to do? So then I get next 8 to 10 weeks. And so like I can see why all the kids are super excited, but then like, you know. So we’ll figure it out.
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Don’t worry about it. I don’t know. I mean, you get like big and it can come over and like is I gonna shovel anyways. Driveway. It’s it’s not snowing, but I’m sure you got some chores or something like that I.
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Good. That’s the best part about growing up on a dairy. You’re, you’re put right to work.
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Let’s go put right to work. So we’ll figure something out. But yeah. His last day school today. All right. It’s a time. Go. Who knows where does where does this chart going to go? Where does I think she’s all right. You’re up. What do you want to do here. What what do we do on the way to chase?
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We hit two bucks. So this is a weekly semi block barrel average. So two is basically two bucks. Got over two bucks. Not looking so hot. No. Do you think in here.
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I don’t know I was going to ask you. I mean, do we retrace all the way down to $1.67 and complete that gap down there? I don’t think so. At least right now. I really don’t think that we do. Do we go down to $1.80? I think that’s probably a little bit more realistic.
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Already there in a locker.
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You know. Exactly.
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So does the barrel do that also though? I mean, let’s say the barrel came down and meets a block, right. That will put you basically kind of right around here. You have like an itsy bitsy little gap.
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Right.
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Right there, don’t you. You sure do. So you’re saying we’re going to go sell this bad boy, but not this guy? Not does this right here.
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Yeah. The bigger gap in the bottom down to $1.60 $7.68. I don’t think you go there right now. It’s the summer. Everything’s getting hotter. There’s a couple different problems in the dairy industry right now. Down to dollar 80. Sure. Right. We’re almost there. Kind of like you mentioned. We’re at 187 half right now.
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Why not. Yeah. Why not I mean go back and look in historically like July can be a bearish month.
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We can make we’ve.
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Seen that in the past. And so it’s not outside of the realm of possibility. I mean I feel like a lot of folks look at July and say, well it’s going circuit in part in some issues, not production, but a lot of times like July, and you don’t start to see some of that drawdown until you get into like August or really September.
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So Q3 could be kind of like a little bit one of those almost like a check mark. Right.
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And I find it interesting before we get on here, I was just peeking at this, and I think last time we had talked about it was, hey, if we get over $2, the next testing point is 210. We got 205 cheese and that was it. That was on there.
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We could just call zero. So last time we did this, we went for two bucks. We went down $2.45. I agree, it seems like a bit of a stretch. There’s a lot of things that are kind of percolating, if you will. I’m going to get percolator accounts. I like Percolators, but things are perking. It’s interesting you got some like new potential demand functions coming into the market right now.
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McDonald’s and Burger King. I think, are both looking at trying to drive traffic for low income and bringing in like $5 meals, things like that. So trying to be like inflation busters I think is what they call them. But so there’s that and then, you know, do I mean house cost of farms, not production. That’s the question on everybody’s mind.
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Well, I mean, right now no production is doing good. But you got to remember we’re going to roll in the summer months here. The hot months July, August. Right.
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Would you say no production is doing better because like the last couple of months, we haven’t been no. Gross.
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No, I still don’t believe there’s going to be any growth. I think there’s certain places in the country that are okay right now. Obviously there’s other states that are having their own set of problems. Do I see milk production growing in the next couple months? No, I really don’t. I really don’t I know people have said that’s just not true.
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Dairymen always grow year over year, month over month. There’s just a lot of things that are popping up right now where I don’t think you’re going to see milk production grow. I think you’re going to see cows shift and move from farm to farm. Possibly the heifer inventory that we have in the States here is very tight, very, very tight and expensive.
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And I just don’t see the growth.
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Reason I bring it up is yeah, it could be set back. Sure. It feels like it. Right? I mean, you’re also about to enter into a calendar months where, you know, May’s average price is obviously a little bit higher. Obviously relative to April’s average price. Right. And so I’d like see, folks, as we start to decline the beginning of June, if we could, relative to like the high of May, I would say, like I must say, unless we retire tomorrow, assuming that’s the case and June’s price starting to shape up like it’s going to be cheaper than May’s, maybe you don’t see as much previous like people backing off a little bit, but that’s a
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short term deal. What’s interesting about it, too, is that the teachers market’s kind of still like trying to tell us that we’re are.
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We talking internally also like overseas? EU cheese is also starting to bolster itself up in pricing. GTI podcast John this week make sure to check that out Mr.. Spain our give you everything you need to know on European markets.
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Yeah I was just gonna say like you’ve got June that went from a premium to a discounted July. It’s been kind of you know, markets kind of had some on it, but you’re not seeing a ton of like extra selling or really like material weakness. No. Excuse me. Glossary. It’s been happy to kind of build in a little bit of a premium here hasn’t it.
00;05;17;16 – 00;05;33;07
I mean like I got so I have a it’s basically a dollar 97.5 last traded price. And she’s markets what 188. Yep 187. So it’s kind of healthy a little premium back I agree I think you fill this gap at the very least going down to 168 a number that seems tough.
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It does.
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You’re talking about let’s say the barrel maintains a premium, the block. You’re talking about a 165 block and like a one 6070 barrel, maybe I don’t know how much it gets into the Arctic Ojos bases loaded by the way. So that one.
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If let’s just say that we do let’s say we go down there and fill that gap at 167. Call it if it happens, it’s going to be a quick trip. Like you said, check mark style. It is going to be a quick trip back higher.
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Oh degree. I totally agree with that. They said they’re going to be a little bit careful. At the very least we’re going to see this little gap canceled. Does this bigger one you sold I would be on board with your thought. I think it’s going to be tough. And if it does, I think it prompts almost like a move like this.
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Yeah. We saw here right where it’s like we move so quickly because we get so cheap with this respect for us world. If we start talking about to book a lot of exports again. So that could be something. But I just think it’s it’s interesting to note that we’re seeing a decline in supply. Right. But you’re also starting to see things that are popping up that could potentially be like new demand function.
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So you know, are we entering a market where it’s like you’re going to have less supply and more demand? That could be a healthy bull market. So we’ll see. But like I said, you got to retrace some of this stuff. And that really isn’t that much further from here. Right. Or is that like an on nickel?
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We might be able to see it by the end of month, which is tomorrow. We’ll see.
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But for now probably got some weakness ahead of us. Here’s another one that’s super interesting. You pointed it out right before what we were doing our little pre prep here. This is weekly butter on a spot basis. This has been such a slow grind up. Yes it’s a weekly chart. So this piece is the beginning of the year right.
00;06;54;13 – 00;07;10;21
So this I think $0.70 pound right. Going from basically 215 up to three bucks. It feels like it’s just been this very slow steady grind higher. But for the first time in a while to your point this uptrend got violated. That’s interesting. It is commentary question though.
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My thought is everyone was still bullish last Friday at about 1 p.m.. Tell us the report came out and all of a sudden we found a lot more butter in storage. And anyone really knew about Open Up Tuesday because the long holiday limit on butter yesterday was down a little bit and today they came back behind butter and drove futures.
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I came out saying in Memorial Day you weren’t loading everything up with butter for the holiday.
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I mean, at that point you probably should have.
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It was did are you asking at this for like when you have corn on the cob? Are you one of those people that, like, takes up carb and like rolls and outer.
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Credit both ways? I see the people doing it like holding it one handed and twisting it, you know, like this on the they put it on and I’ve seen people put it on the plate and roll it that way. I don’t know if there’s a correct way. Both ways are messy. Both ways are okay. But I did learn last year.
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When you go to like a cookout or something, if you do it wrong or differently from the rest of the crew, I think you’re from a different planet.
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You from a different planet.
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I mean, good question for the viewers. What kind of.
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How do you butter your.
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Corn?
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Anybody for? Some people like to melt it and like, you know, dress it on there or something like that. I’ve seen that before.
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And maybe you’re a cycle that sprays it on. I’ve seen that before too. With that, you’re seeing that I can’t believe it’s not butter. I saw somebody spraying it on one time.
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I wish, yes, and I wish you would grow your hair out like the guy. What was this, Fabio? Or whatever it is like. You grow your hair out like that guy. That was phenomenal. I can’t believe it’s not bottom springs. All right, but on this chart.
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Back to the chart.
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Of the chart, I don’t think we actually fill this gap. And we.
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Know.
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Did happen. So we saw the gap and are now below this upward trend. That’s no good.
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We’re making our way back on to it.
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But to your point, I’m glad you said that. We haven’t closed below it and then opened beneath like this week’s close.
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There you go.
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Right. So like, let’s say you always look at, like, a pattern or like the trend clearly has a potential to have a break in it. Right. But then you also have to consider to like is there follow through like on the next bar, the next candle in this case starting next week. So I don’t know if you want to get short butter just yet.
00;09;03;08 – 00;09;16;28
Let’s say we closed here today 303 ish semi open next week at three bucks. So you’d have a three cent lower open relative to this week’s close. And after breaking this upward trend that would be a sign of weakness. Correct. You would be solidifying the weakness.
00;09;17;00 – 00;09;26;04
Agreed. Now let me ask you this. One more day left in the trading week, tomorrow’s Friday. What if we complete this, move ourselves higher and turn this into a bullish hammer?
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Look out! We’re going up all right, look out! Are we going to $4 better this year?
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What’s this kind of. My other thing is you talked to so many people in the industry that are extremely bullish. It’s hard to it’s hard to be a seller of butter right now. Right I mean some wild numbers have been thrown around $3.50, $4. And people are going to say.
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That a wild well.
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According to this. No. But if you look at $4 butter, your all time highs, right.
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Saying would be all time record highs.
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All time highs. Okay, so in that you can’t say that it cannot be done. It just seems like a wild number.
00;09;54;20 – 00;10;13;02
I’m not going to count anything else in butter. I make my way to you. Right. And so to me it’s like going back to like the technical piece of it. To your point, when we were getting ready to for the show, this is something to be mindful of. You broke this upward trend. If you get it close here and then open lower next week, you will have broken the trend and then confirmed it.
00;10;13;02 – 00;10;26;18
That’s a sign of weakness as butter. So it can be a little bit of a wild one, but that is potentially a sign of weakness. Last but certainly not least, this is special code Costa Seventeens sept beans. I don’t let you just like run with this bad boy. What do you got here?
00;10;26;18 – 00;10;32;28
Well, I do believe. Tell me if I’m wrong, that it is really bolstering itself up to be a big old information here, I.
00;10;32;28 – 00;10;44;01
Would agree it looks like it’s got a nice little double top in in the making. And this is what is this 200 day moving average. So this is one that the industry I would imagine a lot of folks look at 5102 hundred days are pretty popular ones.
00;10;44;04 – 00;10;50;15
Interesting. You just mentioned the 50 day because on mine I’ve got that. Also the 5000, 200. We settled right on the 50 day moving average today.
00;10;50;15 – 00;11;14;14
Today. Okay. Yeah. What I think is interesting is it’s actually, do something different. Let’s shake things up. All this noise here. Right? Basically 12 bucks was a number we struggled to get through this year. Right. So you may decide I try to get through 12 bucks. Couldn’t do it and then promptly like rejected that you know attempt at a second, you know, attempt to make a new high and then broke through this area where you’ve had all this consolidation.
00;11;14;17 – 00;11;28;22
Right. And multiple attempts. I mean, it’s 1 to 3 unless you want to call that saw, but at least like it’s called for test at 12 bucks, really failing to get through there with the close below it. And then open lower the next day. But here we are just like we left out with butter right when we had to close.
00;11;28;22 – 00;11;34;29
And then today you had the open lower. So this to me like solidifies that. Like this is a magnet right here where you think.
00;11;34;29 – 00;11;38;20
Could we have a quick check to 1150? I think. So if you’re going to complete the information.
00;11;38;20 – 00;11;44;01
Yeah, I know it’s a quick trip, but I would agree that. 1117 definitely in the cards after today’s close.
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Do you think we grind to 1150 or do you think we are on our way up where it took five six trading days?
00;11;50;06 – 00;12;06;06
Good point. I guess my guess would be that you probably get a little bit more of a grind. Like you see a few candles like this. Okay? Right. Like stair step it down. You see moves where it’s like, yeah, you get one, two, three days in a row. We kind of get some indecision in the market. You don’t get a lot of like price movement day to day.
00;12;06;12 – 00;12;22;17
Right. You get some ranges and then all of a sudden like you get a candle like this one right here, or it’s just like you get a big move that day. That’s kind of where my expectation is, where you get like 2 or 3 days in a row where you kind of stair step it down very small, but still moving lower, and then all of a sudden one day you just like bam!
00;12;22;17 – 00;12;37;21
And then next thing you know, we’re at 1130. That’s where my head’s at with that type of a trade. But to me it’s like, you know how you get there. It’s like it’s a means to an end. I think we both agree that it’s 1150 is the price. We’re looking towards the question of is it tomorrow? Is it Tuesday, Wednesday next week.
00;12;37;21 – 00;12;42;17
So I know you sound like you’re sick. You’re ready to be at level 50 this time tomorrow.
00;12;42;17 – 00;12;47;00
I mean, if you are short this market I think 1150 would be the place exit person. Look at the.
00;12;47;02 – 00;13;04;19
List. Do something right. Maybe you’re exiting. Maybe you’re at least like putting a stop in or something like that, I would agree. I mean, this, this 1150 number seem to be like a number. I mean, look at how much the market propelled once we bounce off that price right? So like you’d almost want to be a little bit careful about it too and say like, well let’s say you got through that.
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Get that by the way. Oh boy.
00;13;07;00 – 00;13;08;18
That is interesting.
00;13;08;21 – 00;13;20;21
That’s right on there. Yeah. I mean, let’s say it takes a day or two to get through this trend. I don’t know if I want to get out. If you get to 1150, unless you’ve got like a day like this, like right there, but at the very least, I think you and I go to great lengths of these in the cards.
00;13;20;21 – 00;13;32;07
How we get there’s a question, right? Is a few days is it a week, two weeks or a year by that moral who nuts? And then what do you want to do when you get there? Right. Is it? Let’s put around there for a little while and see if you can get through that. So it’s a big number.
00;13;32;08 – 00;13;40;06
It is seems like it’s a big number. And if you crack through that and got like let’s say yards. 1148 settle on 1145 open the next day, I want to stay short. Right.
00;13;40;06 – 00;13;48;05
And as our friends Jim and Jake on the green for you to tell us, the weather is going to dictate a lot of this in the next coming weeks, the weather for grains is going to dictate a.
00;13;48;05 – 00;13;50;20
Lot of it. Check it out. And whether it’s getting like wild.
00;13;50;24 – 00;13;54;28
It is hot. One day, rain for three days, hot for two days, vice versa.
00;13;54;28 – 00;14;05;21
It’s absolutely just madness. Madness. This is just tough.
00;14;05;23 – 00;14;10;18
Maybe we should tech talk some some grease or something like that. I’ll do that on elevation.
00;14;10;23 – 00;14;31;00
Awesome. Well, with that everybody, we appreciate you tuning into Tech Talk. We didn’t have anyone call or email info request, but if you do for next week, please let us know. We’d be happy to take a look at those. Want to give a big shout out to Paige and Lexi, who are the heads of the show here. Do our Alvin the Animation keeping Andy Knight on track for the most part.
00;14;31;03 – 00;14;47;00
Keeping that locomotive just full steam ahead. If anyone would like to see any other charts, please email us, call us, let us know and we’ll be back next week. First part of June 2024 with some more charts. Till then, have a great weekend and even better week and we’ll see you next time.
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