In this episode of Tech Talk, Andy and Cody discuss barrel cheese, feeder cattle, and spot nonfat.
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Future trading involves risk and is not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities. You do.
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Find. Hello everybody. Welcome back to another episode of Tech Talk. I am Cody, he is Andy. We are coming to you live on the 17th of September. Andy, how you doing?
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You know what, Cody, if I was any better, would be. How’s it going?
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That’s what I like to hear, buddy.
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There you go. I tell you, we already talked about it, I think, but I’ll show the rest of the world. I found we were doing a little bit of spring cleaning, fall cleaning this weekend. I guess that’s what happens when you get. When you married for ten years. You clean stuff.
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Happy anniversary, by the way.
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Here you go. Thank you. Yeah. So I found my original, very first trading card from Spot Market.
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What’s the date on that?
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So I sold one block two BJ am at a price of $1.34. Not two, but $1.34. Timestamp is December 18th, 2008 at 11:01 a.m. central time.
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That’s pretty cool.
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I know. How about that? I found that, like clean it. Like, you know, you never know what you’re going to find when you’re cleaning it. Glasses.
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Nostalgia.
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It was it was very nostalgic. It was cool. I’ll tell you what else is pretty cool. What’s that? I think it’s what is this new high record for the barrel today? Is that what I heard? Is that what I heard?
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New? I mean, that is the gossip on the street. New high barrel price today.
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I don’t know if it’s gossip or not, but it’s definitely out there about that check. That was a tribute for our song coming into the show.
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Very well. Also extra.
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Just out in the outer space. This thing is gone crazy.
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Now people are going to ask who may have asked. It sounds like you. Where does the barrel go from to 56?
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At popular request. We are doing the barrel today and we should do right. I mean this thing. I guess this is a weekly chart in the barrel and you know, you go back and look at it a monthly and it’s just like it’s flying. So I had I had one gentleman ask me today is this is this formation a W.
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And did we just complete the W okay. Right. This is a monthly. So this goes back to you know mid 2020.
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Right.
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I mean I don’t know maybe you know to me it’s it’s I was looking into more on like a weekly basis. And you know you just what’s interesting is that we’ve been looking at this more as like an average. But you know, this is something that we’ve been, you know, really talking about is this breakout, right. And the you know, once the bull flag that was taken and we really just completed it.
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So if we look at it I want to show this to this is the this is the weekly average. We’ve been talking about 240 for a while. Right. Basically this time.
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By the way.
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Oh take this thing and put it on there. You’re basically here right. And so this, this, this measurement of flag broke out and it went to the in a went to like it’s measurement. So it’s a question of can we continue on. I mean sure an answer isn’t sure why not. But it feels like the way the futures have been trading, things are starting to kind of run out of gas a little bit.
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Yeah. Right. So what do we mean by that. So if you go and look at like even October is trading at 232. Right. And so October futures are telling us you know this that’s an average price right. But the October block is at 223. So it’s it’s it’s it’s telling us that the barrel here, you know north of 250.
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It’s it’s just not long for this world. It’s what it’s telling us. So I, I like I said, I want to look at it a much longer time on a much longer timeframe. This is a monthly and this is what stuck out to me last time we got into this territory. I mean, look at this 253 basically on Halloween of 2020 by Thanksgiving, the $1 41.5, right.
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Good night. I mean, that is just getting destroyed. A dollar, $1.11 lower in 30 days. Are we going to do it again? I don’t know, it’s that was a really wild time. Right. But to me it’s like that’s what if we don’t get let’s say we close here that by the end of this month and we don’t get an open higher, I think I think that’s in trouble.
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I think it’s I think it gets you might have some, some I think it starts to get weak and I can have.
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I think on this chart is you had a gap at what, $1.80 give or take. Going back to October when we first saw that run up in 2020. Yeah. I mean, when you had this on a weekly, you have to be mindful and respectful of the gap at $2 and there’s another one, $1.70, right?
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Yep, yep.
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Not filled right now. But I guess if we’re going to look back and if history is going to teach us anything, there’s a possibility, right?
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Likelihood it’s the onus is definitely like on the bull side. Now from here. Right. To continue this and continue this momentum again. You just closed in a new all time highs today. And futures are telling us that that price is just not sustainable. Right. It’s not like we’re not it’s not like futures are premium. There’s a pretty hefty discount built in some of these monthly.
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If you’re looking at just like the barrel from a barrel perspective. And so yeah to me it’s like I think you have to be super careful. You go back and look at some of the like the last time we were here, you don’t have that many iterations or times to go back and kind of reflect that. But it was a quick trip lower.
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And to your point, you’ve got some big gaps to go and fill this one and this one. So I think you have to be. Yeah. To me it’s we’ll see. But I mean, to me it’s like I think you’re going to have like October be kind of one of those months where it just kind of grinds itself up.
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Maybe we stay here for another couple weeks, but like, it’s the November and December contracts I think could get really wicked in. So already by the way. Right.
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Like exactly. But if we take a look at real quick and I think this kind of leans into it, the, the cheese spread, the black barrel spread right now, I mean, we haven’t seen this number, this kind of discrepancy since on a monthly you got to go back to 2019 almost 2020. Look at that.
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There you go. I mean, you’re you’re in uncharted territory in so many different ways spread between the two. The barrel itself. Yeah, I don’t know. This is this is getting to be this is just wild this year. It’s just wild. And what’s interesting too, is that you’re in a time of the year where, you know, you’ve got schools that just started up and we’re seeing the like the McDonald’s promotional activity persisting into the end of the year.
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They’ve renewed that deal. You know, you’ve got obviously, you know like football started. How did Michigan State this week. And by the.
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Way big lunch big big.
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Packers. What about them. What’s going on.
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The yeah they had a win also backup quarterback win.
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Have you made that decision by the way like Packers versus Michigan State. Like just wanting to like win it. All right.
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Yeah I think I’m more sad if the if green Bay loses like on a Monday if they’re playing on Sunday I’m more sad if they lose. But both of them I’m still distraught. Right. I’m still very upset.
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All right. So I’m going to take that as Packers right.
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Well that we’ll.
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Put a pin we’ll put a pin on it. But all right so back to the charts. Yeah the barrel. Like I think you got to be super like just careful here. Obviously it’s completed. You know what we’ve been talking about for a while in terms of like when you have these flag formations, it’s completed these moves. Yeah. Right.
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Just the measurement from there to that. That’s that’s what you’re looking for. And so from here the idea would be you’d see some sort of retracement. What’s wild is that like even if you retrace this thing, let’s say you just took us back down to like in here. Yeah. You’re talking about like, you know, let’s say like a 228 or season, a 230, you’re talking about a 25 ish cent break in the in the spot market, which is massive, by the way.
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That’s $0.25. It’s just it’s huge. But that’s still that would still mean the barrels is in an uptrend.
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Yeah.
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So I definitely it definitely feels like you could see some sort of retracement here. I don’t think it’s like like I said I don’t think we’re breaking the uptrend just yet. But I definitely think you get some sort of retracement. And I think futures really wash out too. I think any sign of weakness there is just going to be like, you know, limit down like that.
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If you start seeing the weakness in the barrel. Yeah, I agree I think it’s I think the question becomes what happens if you see strength in the block? What if we start narrowing that gap between the block and the barrel there?
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I yeah, that’s a good question. I think that ceiling is bullish.
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I think, you know, when they say feed the bulls I think that is the next portion of that I agree.
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I agree. I think initially any sort of weakness off of these highs in the barrel, regardless of what the block does, is going to be met with pretty aggressive zone in futures. Is that. Yeah, it’s just a gut feeling I’m getting.
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You see I mean still in class with futures. We’ve kind of, you know, dug ourselves I would say when I was talking to people, we have three days where we’re higher. Two days. Well, we’re washed out $0.75 to a dollar. Then we have another 3 to 4 days in that range where we’ll create new highs and right now we’re not into new highs October through December by any means.
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But we’re starting to kind of stair step our way higher right now.
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This could be the beginning of a move where you get something like this and then something like this towards like the end of you it get rid of that for a second for the end of the year.
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Right. Yeah.
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And then maybe you just like, what kind of one more gasp. But then it comes down to here and it’s this move that breaks through the trend.
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Of trade.
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And seasonally it makes sense. Right tail end of the year. You know we’re done with holiday stuff. You really don’t have any sort of like seasonal pick up and demand until what like Super Bowl if the if even. Yeah. So again thinking about a much longer term this is kind of where my head’s at as what we get I think the futures any sign of weakness we get you’re going to get a big like oh just a wash out upfront.
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I agree so I agree.
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We shall see. It’s going to be an easy one. I think it’s going to be a rocket man. All right. So next one we looked at this one last week I believe we did. This is feeders. This is also been one. And we’ve been getting a lot of questions about like throughout the week.
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And I will say that you were right on this one. You said feeders are going to work their way higher. I took the other side of that I was wrong.
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That’s okay. You know, since this is a two sided trade.
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This is.
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Right and wrong. Yeah. So like again, going back to what we talked about, you had this and I just I didn’t touch anything here from last time we spoke. And so you have this guy right here engulfing this basically I think what we talked about before we said was it basically this right here, this two candle formation is the inverse of this one right here.
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And so we got that. And now we’re back at this 240. This area where the market does not like it. Right. Anytime it sees it kind of put around 240 breaks here. It broke here. It you know on it around here. So I think I close over this like 242 243 area. And like if you’re basically going to go off the closes it would be about right there.
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242 and some change I think if you got a 243 settlement here and then an open higher the next day, I think you end up quickly going back into all this noise. I think this just turns into a magnet. And let’s see if I can get.
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That to 55.
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Yeah, I like so basically this range. Yeah I think this range becomes a magnet. I think you got to get closer to 43 or better leave all the selling behind. There’s a lot of trade here. Right. And so you got to think about it from like a, you know, psychologist. Like if we get a 243 settle anybody that was selling it here going back as early as the August early August.
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To.
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Anybody that was selling it is now underwater. Yeah. So yeah that’s the first step. I think you get the 243 settle. And then I think it’s a quick trip into this range. And then we’ll see.
00;11;04;27 – 00;11;07;05
Some more on the bullish side of feeders.
00;11;07;07 – 00;11;24;04
Well I think it’s going to do or die time right. I don’t know if I can say it’s balls from here. Like we had the two. We had the two candle formation. That was the inverse of this one. Right. And it played out. But now we’re to a point where it’s like the next. Like if I didn’t if I didn’t have anything on, I guess I would wait to see if they got that close.
00;11;24;06 – 00;11;38;01
Yeah. Okay. Get the 243 close. Let’s watch the open the next morning. If you get the, you know, like a two 43.5 open whatever it is and I think you can take a shot in it. But I think here it’s got no man’s land. Right. Because the opposite. Is it like this market doesn’t like 240. It doesn’t like to sit.
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It’s still 240. It moves away from it.
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Agreed. Yeah.
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So like I said, let’s get that close over 243 and then I’ll open higher and let’s talk about like another, you know, around a 250. Until then, two we. Yeah. You got to stay tuned. You got to be a little careful on that one. So this is spot nonfat. Our last one we looked at this last time.
00;11;57;03 – 00;11;59;20
It’s like one of the industry.
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That’s super sneaky for sure. Everybody and feel like it’s super focused on on cheese. And why not. Right. The barrel just put a new record here. But the, you know, the nonfat space it has very quietly and sneakily it’s sneakily is even a word. It it’s moved from 1 to 25. But is it a move from 125 to 140 basically.
00;12;17;29 – 00;12;30;28
Right. And 140 it’s been a number where we just like I think we’ve traded a handful. Is there this we just can’t seem to get through that number cap ceiling. I think we do. You know, and to me this is the start of a new trend.
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If you’re like a.
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It does, you know, you have kind of all the makings of it. Right. You have this big trend lower, you consolidated and now we’ve broken out of you’ve had like this big basic it’s build a higher low. Clearly right here. Right. So you have this guy and you know a clear higher low from here. Right. And so it’s it’s just to me it’s, it’s got all the makings of like, this is, this is this wave one that we’re seeing right here.
00;12;57;13 – 00;12;58;10
Right, right.
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Maybe it runs out of gas at $1.40, retraces maybe 25% of that down to something like here and then proceeds, you know, you take you always want to take the first blank of the first wave and then add, you know, another like 25 to 30% of it. Right? So you do something like I’m just I’m not going to do the math, but like something like this.
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Right on top of that.
00;13;18;22 – 00;13;20;04
Okay. As I say about 50.
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But yeah. And that’s that’s still I mean, you still haven’t retraced all of this move, but now you’re starting to talk about trade, retracing your call in the, you know, 60% type number. And I think that’s I think that’s possible. Got a lot of things on the docket here. Big election this year. So that’s you know different policies and stuff like that.
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So that’s obviously going to play a big role. We’ll see. But that to me like if we start to run out of gas here and retrace a little bit, I’d be really cautious about getting overly short that at least until you’ve probably, if you want to, just looking at just from a technical precedent. Yeah, I think you’d have to retrace at least 50% of this move on spot basis and then consider selling it and think there might be like a I forget what?
00;13;56;20 – 00;14;01;12
That’s a trap, like a bear trap or something like that. Do you have any traps at home.
00;14;01;14 – 00;14;03;28
And not any traps? I think what we kind of look at, what kind of traps are.
00;14;04;03 – 00;14;09;01
Like those like steel traps that like clap, you know, like, you know what I mean? You know the catch here.
00;14;09;07 – 00;14;10;27
I’m not a trapper trap.
00;14;10;29 – 00;14;20;27
Is a video of my friends. Like, maybe Paige can toss it in the TikTok. The video of my friend’s driveway where he lives in Colorado. And like the like the bear, like, try to get in those car.
00;14;21;00 – 00;14;37;06
The traps, like the old metal traps, always make me nervous. Because what happens if your hand slips, like, give you a, you know, a bear trap, right? You got to have a lot to pull that thing apart. Set it down. If one hand slips, these fingers are gone. And like, poof, your new nickname is nubs, right? You’re done.
00;14;37;09 – 00;14;46;00
And that’s why I don’t have bear traps. Right? So right there is the reason why don’t have traps.
00;14;46;02 – 00;14;48;07
All right, well, on that note, okay.
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With that, we will wrap up this great episode.
00;14;51;27 – 00;14;57;08
I’m glad that I can just, like, show up at your door one day and know that I’m not going to get up and like, you know, step in a bear trap or something like that.
00;14;57;08 – 00;15;04;11
Like, if I did, I tell you where they were like, hey, don’t step in the bear trap, don’t step in the raccoon trap. Don’t answer. Don’t go out here to the traps.
00;15;04;14 – 00;15;14;02
Just don’t come over. But hopefully they don’t show up right. We’ll do it. Well, I just don’t show up. Here’s another,
00;15;14;04 – 00;15;29;24
Awesome. All right, everybody, we appreciate you tuning in to this episode of Tech Talk. And we’ll be back next week. Next Tuesday to be exact for another episode. If anyone has any charts they like to see, please let us know. We’d love to take a look at them going off, see if that, the barrel chart. You know, I’m sure.
00;15;29;24 – 00;15;32;08
I’m sure we’ll be looking at the barrel here soon again.
00;15;32;11 – 00;15;32;16
I think.
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So this is going to get nasty and dirty is going to be fun. It’ll be fun.
00;15;37;22 – 00;15;45;26
Really fun. But all right, well, until next week everybody. Appreciate you tuning in. Have a great week and even better weekend. Enjoy the weather. See you next time.
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Block Cheese: $1.6400, unchanged, 4 lots tradedBarrel Cheese: $1.6150, unchanged, … Read more