In this episode of Tech Talk, Andy and Cody discuss CME cheese, Dec class III and Jan feeder cattle.
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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.
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Oh everybody, welcome back to another episode of Tech Talk. I am Cody, he is. And it is the 24th of October, just about 4:00 eastern time, 3:00 Central time. I do Lud.
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I’m. Well. How are.
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You doing? Very well, thank you for asking.
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So it’s a week away from Halloween to the day.
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I know you got your costume ready.
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Go ahead. Of course. I have my silly question. Silly question. I’ve got the new batteries in it, the whole thing ready to go. But you, he’s not the response that I feel like I shouldn’t be getting from you. Yeah, it should be like.
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I had an idea, and I kind of went away from the idea. But I have another idea that I see the need to piece together. We got a piece it right it. Which is what Halloween’s all about. Right? Take your favorite things. Kit is ordering from Amazon. That’s not fun. You got to go shopping for it. You got to look for thrift stores, right?
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Get excited.
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Get excited. I’m excited for your costume. I didn’t realize you were, like, putting this much like shopping effort. And you don’t strike me as, like, the shopper.
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Yeah, I did until 10s ago. I didn’t either, so I just put my foot in my mouth. So this better be really darn good. As I’m talking through this, I’m like, oh boy.
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Oh boy, oh, you didn’t li you ever watch The Addams Family?
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I have, yeah, I saw a lot of. We had, like, a mini trick or treat. I don’t know why. It’s really weird to me in the neighborhood here. A lot of Wednesday Addams walking past a lot.
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Okay, you could be Fester Addams.
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That’s a good point.
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Yeah. Let’s give you some of the think about.
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It, a couple ideas.
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All right? Fester, we had a request. Oh. So we have three shirts today. Two of them came at request, and one of them has actually come at request several times over the last month.
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Okay.
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And so I think we can safely say every shirt was a request today. Okay. But the first two came from the same gentleman. He wanted to be called Tinker.
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Tinker.
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Tinker, din k e r intro.
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Shout out.
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Shout out to Dinger.
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He’s we know he’s watching. He’s a very avid watch.
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Yes. First time caller, long time listener. Tinker. He wants to look at Sparky’s The block in the barrel. And then we’re going to look at the summer milk after that. So thanks. Thanks. So I’ve been out of the loop. This is my first day back in several weeks, so I’ve been out of the loop. I drew this line right here because you had talked, I think last night you had talked quite a bit about this little gap.
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Bruschi.
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Right here I am at about 83.
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So yeah, interestingly enough, I mean, we’re basically stopping short of that number and kind of more or less hovering around all this noise when this buffoon, this bull flag was taking shape back in the day. Coincidence? I don’t know. What do you think?
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You know, I think you and I were talking to 2 or 3 weeks ago when we had that massive rally from a buck 85, almost back to $2 in the same week. And it was it kind of felt like the same thing that we’re seeing right now. Every time we got close to that dollar 85 number, all of a sudden the selling kind of slowed a little bit on the CME.
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We weren’t 7 or $0.08 lower in the block and barrel. I think today we were what, three and a quarter lower in the barrel unchanged in the block. And it just seemed you know they were just kind of ticking it down, putting their toe in the water, feeling filling out the market. And as soon as one traded futures probably went from 26 lower to about 11 lower upfront.
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And it just it really feels like the same kind of trade is happening. I really want to go fill that gap of the dollar 83. Just to get product out of the country. That’s what we’re told. A lot of exports will get bought is between dollar 80 to $1.85. And you got that gap at $1.67 ish I agree.
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And I think if the futures are going to meet we’ll take a look at this in a second. But at the futures are going to make I think another big leg lower. You got to get in this gap. And there’s a lot of noise here. I mean we haven’t been $1.83. Let’s go to Gold Peak Mr. Fester Adams since May may, may I mean it’s been a while since we traded that price on average.
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So. Yeah, it’s a it’s a big area, right? I mean, crack into that price I think the next stop is you got to go fill this gap here. You’re talking about getting back down the low mid to low one 60s I don’t know if the market’s ready for that red just yet I don’t know like I said I’ve been out for a while but like it seems like your point you’re getting some export business done.
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I I’m really curious to see how the next month starts. Zero. Have you know, we knew that there was you know, you think about like the previous month pricing the way that model works. It certainly gave folks cause to kind of pause the buying a little bit. You know, when October started, I think September was so hot. But now that, you know, October will clearly be lower than September, I think.
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So when Calendar November begins, do we start to see buying pick back up as people want to pay the previous month’s average of October, which again theoretically should be a much better price in September? Right. We’ll see. I think that’s one to be mindful of. But just thinking about from a chart perspective to your point, this gap is key.
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We got to go fill it first. If we’re going to have another big like down.
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It almost feels like to me we’re going to make a head and shoulders where. And this is in my, my opinion, worst case scenario, we balanced between this dollar $92 for the next three weeks. We don’t fill that gap at 220. And all of a sudden, you know, we get back to $2 and then promptly fall off the face of the earth come December I, December 10th, somewhere on there.
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Yeah, I agree, I think that’s what we’re getting ready to do. I think we have another little pop before. And I think it’s to your point like this high is about 2 or 5.
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Right.
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It’s also like the midpoint of this bar, which is where we really started to accelerate, obviously. Right. It opens with this big gap and then really took off. So yeah, I mean, to me, I think you got to go back and go test this area. Green filling this gap seems tough, but I don’t think it’s a straight shot down from here.
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Right. To your point, it seems like it’s more of a let’s go do this guy real fast. Well yeah I think I said I think it’s going to come based on that previous month buying I just talked about. We’ll see before you go and test this guy again. We’ll see. That’s there’s a lot still up in the air.
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There is right in the air in with getting back to $2. And then if we can get to two bucks and fall off, let’s say mid December, even rolling into quarter one, I think you’re going to see a lot of eager buying. If we can get down to the $1.67 gap down there and fill it, because there’s a lot of things in country that are going out on the West Coast with milk production and animals and so on and so forth, that are going to be around that same time period that we’re talking about, where some of these reports, these new production reports are going to come out, what are they going to say?
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What are they going to show us? Sure.
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And a lot still to be said, yeah, there’s a lot to be said. So but again, charting wise we got to like two here. I think the longer we trade sideways, the more prone we are to a little bit of a path that takes us back to this 205 area. I think that’s definitely in the cards. We shall see.
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Courtesy of Denker D’s class three. He had some commentary about it, by the way, that I’ll share with everybody here. I’m just in that. Well, it was more of a question. And he said, are we forming a W d cluster?
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I was just going to ask you that and I want to bring this up. I’m actually looking at it right now. Settlement stats this morning November down 62. And December actually up 223 contracts for open interest. Class three is class three.
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So this low from this bar. So I guess what you’re saying is that.
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My short in my opinion are the shorts rolling out and getting into longs. Making this w.
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Could be I mean that’s that’s certainly one way to think about it. Right. And so this low is 2020 right from this bar. So this so basically for this to be you know a w today’s lows 2031. We’re basically on the lows right now. We’ve got another call. It’s 12 ish $0.13. You need to get a close below 2020 for this to just be another you know continue to be a bit of a pick.
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This could I could see what he’s talking about. And I would agree that you have to you have to be a little bit mindful about selling it here just because of the potential for this w to to take shape. And I do think it does for a brief period because we’ll be talked about going to 2 or 5.
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When you think about like current cash, you know this at 2030. Yeah. That’s that’s that’s not really a premium right. I mean if like versus this current spot level, there really isn’t much of a premium, if at all, in December. If you add premiums in to the SA, check out bases loaded with Joe Schmidt. Learn more about that.
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So there really isn’t. Yeah, there’s not that much of a premium. So now you’re basically if you’re selling this here, you’re basically saying the cash is going to continue to go lower from this price. There’s nothing wrong.
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I was going to say I’m checking out the RSI on this class three. And it looks like we are making another bottom from the beginning of October, where we went to 220 and then rallied up and put another dollars 50 on top of it, which as you have said and taught me before, it’s only a secondary reference, but I just found it interesting looking through it today.
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All right. So this is what you’re looking at right here.
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That’s correct.
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Okay. I see what you’re saying. I mean, it’s like you would have liked to have seen it get theory. Let me blow this up a little bit. You would have liked to have seen it get through this blue bar. That’s like oversold. Kind of similar here. It was overbought over here. Here it it hasn’t quite gotten there yet.
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But to your point to like if it can’t if it can’t get below this 35 and there’s another little bouncer like that’s I would be I would definitely like look at that and say that’s secondary indicators giving you confirmation that the W is forming. Right. So now there’s some things creeping up here. So I, I agree with thinker the past, but it’s certainly possible to get you know a W.
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And again like if you’re looking to buy it you know where you’re wrong at this 2020. It’s not that big of a spread, right? I mean you’re basically paying, you know, if you’re it was like $0.15 was slippage kind of thing. But if it if it is, it takes you back up to, you know, let’s say 21.5. I mean, there’s a lot of room here.
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So, yeah, I mean, the risk reward certainly there. I think, again, we seem like if cash can’t go down from here, then Desus is the win nearby. I can agree with that. So thanks, Denker. Appreciate it. Last one certainly not least. We’ve had a lot of people want to chit chat about feeders and fat. So I just public feeder cow.
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What do you think here.
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Volatility slowed down in cattle here recently.
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It has. It’s also had quite and literally.
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It’s just it’s really slowed since we were in the June through August. You’re good.
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Yeah. It’s so we’ve had this big move and I think you would I kind of bickered a smidge about I think it was this or October fats. Yeah. So you and I had this, like, back and forth about this w. Right. So what’s interesting about this is that it played out in a similar way to feeders, only that you had this new low that got completely reversed.
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So not quite w you’d want to see, but it had a pretty healthy response. So when I what I think is super interesting is the fact that you’re not getting any sort of material or response out of the bears. This is it. Like this is the best they can do right here, right? Like that’s very little, you know, relative to going.
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You went from basically call it 230 to pretty close to 250. And here we are at 245. That’s barely a retracement. So I would argue that this is setting up a little bit more like what we saw in cheese. I would say this is shaping up to be a bull flag and has got another little popper coming in hot if it does.
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Interesting.
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I think you got to be super mindful of this price. And then I also think you don’t want to basically take like in this case you’d the measurement would be I think you can safely say we broke out right here. Right. And see that like this. Right. This seem to be where the market started to really go. You got these three and then took off.
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Right. So let’s just use this you know, take here pocket right on top. Look where it takes you.
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Then go right back to the hot while.
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Right up in there. Right. And so yeah. So and if you want to use like really dial it down, you really take it from that high. Right. Because that’s where it’s going to break out from. So it takes you back and and I think that’s I think you got to be really mindful of its ability to go trade 1860.
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This contract at least the Jan Jan Peters. And you know, I guess what would be you know, like the inverse of that is you have this really big bar right here. Let’s blow this up for a second. You have this big bar right here. And since then it’s just been a nice it hasn’t looked back since. I think getting in the middle of that which would constitute us like a, you know, a reversal taking you back into here somewhere.
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So that’s that would be like the point I’d want to be mindful of is this high rise, that two 4060 break through to 4060. Then I think it’s a quick, quick a quick trip to 30.
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And I’m glad you brought up the bull flag. I was not even looking at it that way.
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So you who likes to be bullish wasn’t looking at it in a bullish way. Is that what I’m understand?
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Well, I was I was going to ask I guess that the more that when I stretch mine out and make a little bit bigger, I was going to ask about a five wave Elliot theory. But now that I look at where you have driven drawn and what I have on my chart, I see exactly what you’re disappointed there.
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That I mean, it’s similar. Here’s the chase. We talked about the bull flag here. Yup. It’s very similar to here. Right. You just take the measurement for where it broke out from and lay it right on top. So I think you’re going to you’re I don’t know about that. I think you’re going to see something very similar.
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See we’re learning. We’re all learning.
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Learning something I.
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Appreciate that.
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Learn it okay. It learned.
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Did learn.
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Not to my English.
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By the way. Next week is our Halloween extravaganza episode that everyone seems to tune in for every year and loves.
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How does here. How does your shopping spree go?
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Well, it’s going to have to happen this weekend, but I’ll let you know you get his order from Amazon. That’s not funny.
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Just tell me, as I’m not saying it’s a bad I’m not saying that it’s like which that makes sense to me. Everything you’re saying is making sense to me. You just don’t strike me as like the kind of guy that would shop it on the weekends. I’m not.
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I’m most. I’m a 7 a.m. shopper. Nobody’s there. They’re just, you know, opening the cash registers on the first one. It’s not a big people person on the weekend, you know what I mean?
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I hear that, so which surprises me that you don’t want to go to the Amazon, but I’ll digress. Like, I.
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Should let me email me with my dual search, and then I’ve got to.
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Do a little search for triggers.
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Do walking. All right everybody it with that. We appreciate you guys tuning in Denker we appreciate the chance. Thanks. Want to look at, hopefully we did them justice for you. And if you have any more next week, please let us know. And then I will be back for Halloween extravaganza next week. I think we’re on the docket for Tuesday, so please stay everyone stay tuned for a more than exciting episode next week.
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Then it sounds good.
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Block Cheese: $1.6400, unchanged, 4 lots tradedBarrel Cheese: $1.6150, unchanged, … Read more