Hello, everybody. Welcome back to Tech Talk. I’m Cody, he is Andy, Michael is in the background making sure that we stay on track. We are the Tech Talk trio.
It is the 24th of June. We are about an hour before spot dairy trades. We used to do the show in the afternoon, but we kind of switched it to the morning. So just to give everybody a little bit of a heads up on the markets that we’re going to look at before the big trading time for the big-ticket item.
Andy: Exactly. Exactly.
Cody: How you doing?
Andy: You know what? If I was any better, I’d be you.
Cody: I love that answer. I’ve always loved that answer. “If I was any better, I’d be you.” I love it.
Well, I guess we’re going to do a little rapid-fire spot dairy today. We had no requests that we can think of or remember. We’ll go back through and look.
So that’s okay because I feel like these continually come up as requested.
Andy: Agreed.
You know, we haven’t gotten a space request yet. Maybe we will.
No, I did get an interesting one from Sophie this morning looking at Pokémon cards. It was a really interesting conversation I had at 7 a.m. Anyway, how Pokémon card trading is possibly leading to a recession in the future.
I don’t know. I think maybe we’ll save that one for later, but it was a very interesting conversation. I mean, the neighborhood kids like to play around with Pokémon cards and trade them.
Andy: Yeah, well, there is some massive industry right now.
Cody: It’s huge.
Andy: Huge.
They have the big fat cards. They have the little golden ones. It’s crazy.
Cody: I don’t know. Maybe we could come up with our own trading card game or something like that.
Andy: I’m sure we could.
Cody: Cody Cards.
All right, until we come up with the game, should we look at a couple charts? A couple, two, three charts here?
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Spot Whey
All right, so this is spot whey. This is the first one. We’ll just go right down the line.
They haven’t touched any of the lines since we put this together last time we looked at it.
Obviously, I’d say that’s one of our previous goals: 86.
That whey chart—higher highs, higher lows. You could argue this one is one, two. So we can just move this bad boy down here, I guess.
What’s interesting about this is that you had this takeoff. It accelerated once it went through this area. Again, this is $0.60, more or less. Once it popped through here, it really accelerated.
Then it made a failure to get back down to $0.60, and now we’re kind of doing what I would call a bull flag.
So what is a bull flag?
It’s basically a continuation of an uptrend. You have kind of this slight tilt downward before making another move higher.
So if that is the case, another higher low coming in is what you’re thinking?
Andy: Yeah.
You would basically add that move on to wherever it breaks out. You’d want to use this high right here roughly, which takes you back into all this.
Cody: So $0.75?
Andy: Yeah, approximately $0.75.
Which, I mean, since you can get whey in Doritos now and everything else, it seems like it’s in pretty high demand.
This seems entirely possible.
But again, if you just look at it strictly from a chart perspective, you’re getting somewhat of a bull flag and a failure to touch what has been a pretty key area—this $0.60 level.
So the one strong point in dairy so far has been the dry whey complex.
Cody: The shining star.
Andy: It’s so sideways right now, too.
I know we just talked about it being slightly down, but look at this.
$0.70 was the last traded price. Current price is $0.685.
When you go back to the beginning of April—April 2nd—it was $0.6875.
Here we are at $0.685.
Not a lot of movement there.
Cody: No.
Andy: I can’t remember the last time we had an entire quarter where the spot market moved a quarter of a penny.
Not much.
So that could be supportive there. We’ll see.
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Cheese Blocks
This is the block chart.
We haven’t changed or done anything here.
We got a little egg on our face. We were thinking we’d get more of a test down here.
What’s been interesting is that this downtrend that started in September of 2024 just continues.
It tried to get through it here.
Tried to get through it right here.
Gave it a shot.
Nope.
Nope. Not today.
What was crazy about last week—this bar right here—I think on Monday, it was one of those days where we traded more cheese than we’ve traded since December of 2010.
Cody: Yeah, 35 loads, right?
Andy: Thirty-five loads in one day.
That’s a lot of cheddar.
That’s when people were excited, thinking maybe this thing is turning around and we’re going to get a little bit of a run higher.
That’s 1.47 million pounds if you use 42,000 pounds per load.
So yeah.
You had discounted the rest of the world. Futures were at a premium.
You’ve had a pretty big break.
We had our interns look at something interesting.
When cheddar blocks get below $1.50 on the CME, basis over the last ten years has never been negative. It’s typically four-and-a-half to five cents over.
What that tells you is that the CME is a buy.
You’re not getting a better deal off the exchange in terms of flat price.
Then bam—we start the week off. We were down around six cents. I think it was $1.39.
We had a little pop yesterday.
Not much.
So I guess the question is: Do we go back to $1.30?
Cody: I was waiting for you to point this out.
Andy: Whoops.
We’re $0.11 away right now.
So there’s that gap.
But we also just made one here.
To me, it’s just kind of like you’ve got unfinished business right here, but we also have unfinished business right here.
Both could be magnets.
I don’t know. This gets a little dicey.
To your point, we had a ton of volume change hands.
I get the sense, especially with the time of year, that we’re likely going to…
Could this be one big W where it turns into a higher low?
I think that’s possible.
I struggle with us breaking below that low.
I think it’s around $1.29.
That low for that week was $1.2825.
I struggle to see us getting below that price.
Could happen.
But to me, this feels like a higher low setup.
The previous time we were this low was in 2023.
We got down to $1.31 and then rallied ourselves back to $2.00 within about two months.
The lower we go, the more product we’re going to clear.
Buyers’ checkbooks obviously get deeper because it’s less money per pound of cheese.
I think that’s what the market wants to do—find that area where you clear enough product.
Then I think that’s where we break out of this downtrend.
A meaningful breakout.
We haven’t done it so far.
But I think a first big indication would be a failure to fill this gap and then start to round out.
We’ll see.
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Butter
More bearishness.
Weekly butter.
Ever since we had the new-crop pop…
Since then, it’s just been sliding.
Same thing.
Similar to cheese.
You have this gap.
We have another one that formed here week-to-week at the start of this week.
Do we put in a higher low?
There seems to be a lot of geopolitical things going on right now.
Are we seeing resolution in the Middle East?
Will we have an easier time exporting here in the coming weeks?
We’ll see.
I would suspect that resolution there is neutral to bullish for butter from this price point.
I have a hard time seeing it being bearish.
Maybe it’s nothing.
But I have a hard time seeing it being bearish.
Again, technically speaking, this looks very much like the block chart.
The big downtrend started in September and has been tested a few times.
Failed to get through it.
This one’s a little more pronounced because you kept making consistent lower lows.
Now it’s like: Can we stop?
I think the first indication would be a failure to make another lower low, which seems like what we’re trying to do now.
Every day it seems like we’re trying.
Cheese right now—with the Fourth of July next weekend—is probably going to bring out more buyers.
Butter probably not so much.
That’s the hardest part about this time of year.
Who’s going to buy a boatload of butter right now?
But you could start to see things like cream cheese, ice cream, and other seasonal products have an influence on the price of CME butter.
It’s certainly that time of year.
Promotional activity has to pick up.
We saw some of that at this price point before.
Technically speaking, it looks like we’re trying to round out and make a higher low for the first time in almost two years.
Not quite, but we’re close.
Stay tuned.

Nonfat Dry Milk
Last but not least.
The falling knife.
What goes up must come down.
The treetop formation.
The house formation.
The roof formation.
I don’t know.
The question was certainly being asked on the way up: When do we stop?
You just had one candle after another that was ruthless.
But we know dairy is the same way on the way down.
It turns into a falling knife.
In this case, it’s just wicked.
This high is $2.29.
Here we are at $1.60.
Five and a half weeks later, you’ve shaved $0.60 a pound off the price of nonfat.
Think about that.
A $0.60 move.
Look at this range from 2023 up until September of 2024.
Even then, it was $1.20 to $1.38.
Maybe $0.20 if you’re being generous.
Not $0.60.
Sixty cents is a monster move for an entire calendar year.
To see that across five weeks is crazy.
So I don’t know.
It’s hard to say where this really comes to an end.
The futures have kind of been pointing toward this area.
A lot of those deferred futures have been hovering around $1.45 to $1.50 for a while.
Even while the cash market was climbing.
They were heavily discounted when we were above $2.00.
They were saying this was overdone.
But they don’t seem to be breaking much from that $1.45 to $1.50 area either.
It seems like they’re trying to get back into that range of $1.35 to $1.53.
We’ve talked about this before.
The back-of-the-envelope math says nonfat should be roughly three times the price of dry whey.
Dry whey was around $0.64.
Multiply that by three and you get $1.92.
So nonfat is now looking overdone on the downside.
Maybe it’s oversold if you think about it from a dry whey perspective.
We’ll see.
The momentum is obviously on the bear side.
So what would you want to see to say we’re done?
On the weekly chart, maybe two or three weeks of bouncing around $1.50 or $1.35.
Something that says we’ve stopped the falling knife and we’re back in the range we’ve been trading in for the last three or four years.
Because there are a bunch of gaps on here.
But at the same time, do you think you’re going to hit $1.35 and go back to $2.00 nonfat?
I don’t think so.
Something would have to change.
Something Food Box-like would have to happen.
It’s possible.
But it seems pretty unlikely with how futures were acting leading up to this point.
So what goes up must come down just as fast.
This is like the end of Die Hard right here.
Cody: I know you haven’t seen it yet.
Andy: I haven’t seen it.
Don’t ruin it.
Cody: Hans Gruber right here.
I think a couple weeks of just normalizing this market—and not being $0.17 higher or $0.17 lower in one week—would be a good indication that everybody has calmed down.
Here’s where the market should be.
Here’s where the market needs to be.
Andy: I agree.
We’ll see.
Looking at this chart, I don’t know where that’s going to be.
We’ll look again in the next couple of weeks.
Hopefully we get some requests along the way.
Cody: I hope so too.
Maybe some Pokémon trading.
We don’t know.
We’ll look at anything.
I’ll have to figure out how to chart that.
Some Poké Cards.
All right.
Well, thank you for your deep dive into Tech Talk, my friend, and the technical analysis of these charts.
If anyone has any requests they’d like to see for next time, please let us know.
We’re going to be back with you after the Fourth of July—the following Wednesday.
So we’ve got plenty of time.
We’ll kind of see what markets do.
If there’s anything you want us to dive into, please let us know.
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Until then, everyone have a great week.
Andy: Have a fantastic Fourth of July, everybody.
Cody: We’ll see you next time on Tech Talk.