In this episode of Tech Talk, Andy and Cody discuss spot whey, cheese and butter.
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Future trading involves risk and is not suitable for all investors. Content provided in this 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. It is December 10th at just about 230 eastern time.
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Well wait a minute, a little. We’re just. Oh, we’re just over.
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All right, well, my computer’s running a little slow.
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Then I’ve got 137 central.
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My computer’s running very slow then. Okay, good to know.
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What. What time do.
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You right now? Mine says 229 230. Now.
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Maybe we’re talking to you. I’m talking to you from the future.
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It’s very possible.
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It could be like right at it. What’s that movie where, like, gravity acts on that planet to make an interstellar.
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Interstellar gray movie? Yeah. Great movie.
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Yeah. Maybe you observe time is different than I do.
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Feels like you’re right. Now.
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I don’t want to get too far in the weeds. It’s like time dilation, because I just thought I would.
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Just get this. I just need to fix my computers with this. Kind of comes down to. But regarding or.
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Or somehow gravity acts differently in your house. You have to figure one of the two. Maybe it’s your clock.
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Oh, knows it could be.
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Last time we talked to you, like weather was getting a little nutty by you. You have to do like the obligatory, like, let’s talk about the weather conversation that everybody has.
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Snow is here now. It’s melting. We had 40 degrees this weekend with a little bit of rain. So everything is everything is melted. The green grass is back. So far.
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So are you like shovel in your neighbor’s driveway now? While we.
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Were until it was.
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We were. Yeah. When you editorially like the right like the royal. We like the edits, the editorial. We like.
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All that. Back to charts. We have got three charts today. Two came at request, one that we picked. Let’s keep it moving here.
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We’ll get the royalty going here. So this first one came at request from Thunder Hawk. He specifically requested that we don’t call him Thunder Hawk, but he has to be called Thunder Hawk.
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Fantastic.
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All right, so Thunderhawks Thunder Hawk wants to see way. What do you think about this? A spot where we think.
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It’s looking pretty bullish.
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Good. Pretty perky. This is a week.
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Looks like one possible gap test at what? 70 got $0.78.
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Yep. Right. There you go. And so last time you and I talked about way on the show we had those two lines up as a prospective gap.
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So I didn’t we didn’t draw these bad boys in before we started beforehand. Right. It was there’s that gap. We know gaps are unfinished business. We’re pretty close to that price level now historically you start going back to like you know $0.80 plus. Yeah. The market has never like that price. No I mean you could even go you know, before there was the, you know, way on the spot basis.
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Right. We looked at like futures. It was always tough to get anything beyond $0.80. So sure I mean can we go trade $0.80. This monthly chart certainly things and think so. Yeah. Right. You’ve got plenty of momentum. You’ve got the higher close like this is a clear breakout last month. Tried to get into last month’s candle so far.
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Can’t do it. That’s a sign of this. This right here is a sign of strength. This hammer to your point. You’ve got this big gap sitting right here at around $0.78. Plenty of positive momentum. And you have here’s like let’s just take a quick look at was the last two candles. So it’s only Tuesday. So plenty of time.
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But this was this unto itself was starting to kind of look like a potential like dark cloud cover.
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Yeah.
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Where you try to rally fail and starting to come back into the previous bar after a big rally. That’s a big that’s a big sign. But we always say like, well, what is the next bar do? Does it open lower? That’s a confirmation in this case. No sir. So it opened higher and is now trading above the previous high of 7275.
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And it is Tuesday. So we have a little bit of time left in the week here. Not a short week is all five days.
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It is Tuesday full week. Do you. And you’re out. You’re out next week too. So we gotta make this one like extra special. Yeah.
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And then after that you start having some partial weeks with the holidays. You got Christmas, New Year’s following.
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Valentine’s Day coming up at some point.
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Two short weeks coming up.
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Look at that. Don’t forget Valentine’s.
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Let me ask you this. Do you think way goes back and test the old high of 80 called $0.86?
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I don’t know about 86. I think you got to go fill this gap. Okay. And that’s I mean, I guess that’s easy to say too. It’s not that far away, but it’s still you’re talking about knocking on the door of $0.80, but you have a nice steady uptrend. It’s been tested a few times. It got tested recently here last week.
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And so far, even if we settled here this week, this would be a bullish indicator right? Again, tried to try to go lower last week and are now trading above last week.
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Very true.
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So we could do nothing for the rest of the week. And this would be a bullish candle. Yeah. So my gut is is that we see one more guy like this just like this. And that goes and fills that gap. And then maybe we get something like that right there that becomes a little bit more like the trade here.
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Yeah. So you tack on another $0.05 and way and you’re at that gap.
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Yeah. And then you do something for all the viewers at home right there. So do we have, do we have basically almost like this three bar pattern right where we break out, have another, you know, go up, fill that gap in any dancer and then have like a clear retracement of the previous candle and lower. Oh that’s what it feels like.
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We’re about to go.
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Do I see what you’re saying. That’s what this feels like to me. Okay.
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Bam. Right here. But this time I think we’re going to do it against a price point where the rest of the like, we start to run into, like, fundamental resistance to like $0.80 plus brings like sellers out brings, you know, who’s going to be the new long at $0.80 to get long at that price, I think you’re gonna struggle to find that kind of thing.
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But here, now, that’s what I think we do. I think we see this three bar pattern. It’s going to come up and maybe this is this. I would characterize this first one right here is this week. Boom. Merry Christmas and a happy New Year.
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And a happy New Year.
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All right. Thank you Thunderhawks.
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Thank you or Merry Christmas.
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For your request. Let’s move on. So this is going to be all spot all day all spotted. So I didn’t touch this one since last time we looked at weekly cheap weekly you and I you and I were looking at this bad boy and saying, it is like we’re looking for a test and filling of this gap to 175.
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Futures are saying that’s what we’re going to go do. And then some.
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Still haven’t done it yet. Still we’re working. We’re working our way.
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Still haven’t done it. This is this week’s candle so far. Pretty small range but gapped higher to start the week. So you have the open from the previous candle right. This is a pretty clear rejection of this attempt at the new low for the move. And then you open higher. That’s that’s a sign of strength. It’s a question of whether or not you go and sell this.
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I think we can I know it’s interesting that we’ve seen a lot of like January calls trading this week and last week, $20 calls, 1975 calls, 19 apples all have been trading. It seems like they’ve been either iceberg bids that have been coming in or if you try to sell some, you know, like they get they just get scooped pretty quickly.
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So I don’t know, maybe that’s just that’s just a coincidence, but I just I feel like I need to point that out because those all point to like, you know, cheese North of $1.80. It’s a five week month. But it’s it feels like that’s something that, you know, is it possible for us to have a small retracement like we talked about here?
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I definitely think it’s possible. It’s just a question of when you start talking about cheese north of a dollar or 75 on the CME. You talk about Nass, you know, add in 3 or $0.04. You’re talking about close to 180 Nass. If you believe in the premium. That feels like that could be tough.
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Right? I think you have to have a lot more fundamentals behind you to get north of $1.75 at this point in time where we sit.
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Right, who’s going to pay, who’s going to get long at that price like we talked about with way. And it’s took you know two obviously different price tiers right ways knocking on the door of all time. Not record highs but close. This is just kind of middle of the range. So to me it’s I feel like we’re getting set up to kind of trade in somewhat of a rangebound trade for cheese.
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I think we’re going to go we’re going to go test the other two.
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I really feels like for the next couple of weeks, because they are 3 to 4 trading day weeks will call them. Right. You got Christmas. You have New Year’s right after that. And then a lot of people are just kind of gone away from the desk. Time with family assumes, like we’re going to kind of trade sideways here.
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And then once we get into that third and fourth week of January, that’s when I think we’re gonna get that upswing on the on the cheese side.
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You and I can agree here. It’s it feels rangebound, especially with the way we got down to dollars 60 ish barrel. I think it came just shy of that. Right. And then we just it was quick to pop off of that. I mean, come on, it had just broken a dollar per pound. To not see some sort of retracement I think isn’t unreasonable.
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So yeah, that’s that’s where my ends. I think we get this kind of I think you and I are a little bit different in the sense that where could the bottom end of this range be? You know, we, we drew this is going down to like 155. I think it’s possible. I don’t I think that’s really struggles to get down there.
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Right.
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And I think you see just like I think you start to see a little reluctance of new shorts at that price. Like it doesn’t feel like it turns into a runaway tech trade. I think it just turns into a rangebound trade before we see where the next. Yeah, it’s.
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Almost like we’ve taken that spot, you know, between $1.50 $2.65 and now jumped at $2, 65, $2, $75, 80, you know, window right there that we’re going to trade in until something fundamentally tells us that we need to make a directional move.
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Yeah. And the momentum to the downside is getting a little overdone. So what this down here is suggesting is that, you know, you’re starting to kind of round off. So now you need to see we need to see new perpetual selling that continues this trajectory of the momentum lower here. If not it starts to turn. And then like you start to get kind of like again sideways trades takes that momentum back to zero.
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And if you cross zero and get into positive territory, then you’re talking about, well, you know how much of this do we retrace. Right. So right. Yeah, it does feel like at some point, like if you want to use this as the low I mean, you’re talking about just 30% retrace since 193. I think that’s to your point.
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Later on in the year, next year. But I think we have to go find a range first. So I think we’re going to go test the upper end of that, first of that above that range.
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Yeah. Feels like.
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We’ll see. We’ll see. Last one. Certainly not late coming in hot attacked I would also agree time was one. Yeah a long time listener. Hopefully he’ll be a first time caller. So this is spot butter on a weekly basis. Huge retracement potential obviously. Right. This goes back to like you know this is cool I think this is Covid price 110.
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That said we’re up against 250 and a number. The market seems to be for the most part right now, finding some modicum of support. Not a lot, but it is struggling to get through. 250 and futures Jan 260, Feb 262, March 2nd 66 and so on. So the futures are telling us that you want to buy it on a spot basis of 250 is going to be more expensive.
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For the cash and carry going up.
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But the cash and carry. That’s right. So I guess the question is, you know, are we going to find a new range like we’re like we still like we’re getting in cheese. That’s I guess that’s kind of more of a I feel like we’re going to get back into kind of where this where this noise was.
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Like 272, 6270.
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Yeah. Again, you have we’ve had a big move off of the highs. A lot of butter probably got put up here. Right. And so who’s going to be the new seller at 250 and lower to the fundamental support that right now doesn’t feel like it. It feels like buyers at 250 with what futures are doing with what the rest of the world’s doing and what we’ve seen here just in the rearview mirror for 2023.
00;11;26;24 – 00;11;38;03
And for most of 2024 to that 250 isn’t a bad price. I think if we do break that, then, you know, it’s a quick trip to like a 232. It turns into a real fight.
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The lows of last year, right? Yeah.
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Sorry. Yeah. This was yeah, 2023. We did this was from gosh beginning of the year all the way up until now. This has changed you.
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Yeah.
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This is six for six months of the year. Traded sideways between 230 and 245. Basically I think that would be a real tough area to get through quickly. We’d have to I think you have to consolidate.
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Agree a it agree.
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But first up is we got to get to 250 and actually get a close below there and open, you know an open lower futures have to follow suit too. Doesn’t feel like that’s happening right.
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No it really doesn’t. Every time we get down to 250 we seem to find some, some buying power that comes into the market.
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Yeah. So I think, I think the in order to do that, I think the futures have to be the leader there, and we’ll see. But this one feels like we could be sideways for long.
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Hopefully not. Janet dude like it was last year. But I mean, I guess you get a look at what happened after we got into July. I mean, look at the rally that we had from 238 to 350.
00;12;29;16 – 00;12;37;17
350 butter. That’s amazing. My gosh. I mean, like, it’s so expensive to put it on toast now. It’s just it’s unbelievable. What are you going to do?
00;12;37;17 – 00;12;55;24
Like what are you going to find things to put it even to even look at this year where we went from 250 back to 320, not such a, you know, violent move higher kind of a gradual upward trend there. And then we obviously crashed right soon after, but feels a little bit better than going straight up to 350.
00;12;55;27 – 00;13;15;26
Yeah I think again appreciate Iowa Dan taking a look at this I know this is a really I mean this this thing is this can be so volatile. But I think if we’re going to have any sort of material weakness, we have to get this close below to 50. If we don’t. And I think you got to you got to seriously think about, like, going back into like 265 type trade, more comparable to where the futures are.
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Right. So it’s not that big of a move for butter. I mean we’re at 253. You’re talking about adding 12 since this week right here was down $0.24. So for the butter market moved $0.12 is not a big moment I think that’s all we have for today.
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Hold on. So art in two weeks it’ll be the dead the show right before Christmas right. Yeah.
00;13;32;20 – 00;13;34;11
Oh yeah. Because you’re out next week.
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We’re not doing a show on Christmas.
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Page.
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We’re not. I’m not doing that.
00;13;40;00 – 00;13;42;04
I’m not giving the people a Christmas show.
00;13;42;06 – 00;13;44;23
But we can do one. But not on Christmas Eve.
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On your Christmas day. No. You want you want to give the people a Christmas Day show. I’ll be happy.
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Want to discuss holidays?
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All right, so we might be back in two weeks. We don’t know yet. It’s up to our boss here.
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We’ll have either a merry Christmas or a happy New Year. Probably both.
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The Grinch filled Christmas. A page has her way. Either way, hockey or Thunder hockey. We appreciate you under our,
00;14;06;20 – 00;14;07;19
Well, I’ll say it. I’ll say.
00;14;07;19 – 00;14;24;16
Right. But, we appreciate you, reaching out. Dan, as always, appreciate you reaching out. If anyone has any charts, they’d like to see you next time. Whatever page. Let’s let’s do this again. We would be happy to look at them and go through them. Until then, everyone have a great week. An even better weekend. Send Paige an email.
00;14;24;16 – 00;14;27;04
She needs some cheering up and we’ll see you next time.
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Block Cheese: $1.6400, unchanged, 4 lots tradedBarrel Cheese: $1.6150, unchanged, … Read more