![]() ![]() The Boxed Beef report had Choice at $289.84 after a 72 cent drop and Select at $258.83 after weakening by $1.07. That came via a 60m lb increase to Q1, a +45m for Q2, and a +75m for Q3. The WAOB left the 2023 beef output at 26.932 billion lbs, in today’s WASDE report, but raised 2024 production to 25.99 billion lbs. USDA had the Thursday cash market from $166-170, though action was light and the bulk remains near $170-171.The CME Feeder Cattle Index for 12/06 was back down by $1.92 to $222.31. ![]() Feeder cattle are leading the way through midday with gains of over 2% as the Jan contract is up by $5.02 and now in the black for the week’s move. This means that they have reached the minimum weight for processing, at which point feed lots will sell the live cattle to meat packers.Despite a bear friendly report, the cattle futures market is trading with triple digit gains of as much as 1.7%. The data and formula used to calculate the final settlement price is published on the CME Group website.Īfter feeder cattle reach the weight range of 1200 to 1500 pounds, they are considered live cattle. The CME Feeder Cattle Index is calculated by CME Group staff using data provided by the USDA. They are listed for trading in January, March, April, May, August, September, October and November.Īt expiration, rather than calling for the delivery of physical cattle, Feeder Cattle futures are settled in cash at a price equal to the CME Feeder Cattle Index on the last day of trading. Feeder Cattle futures trade in units of 50,000 pounds and in minimum price increments, or ticks of $12.50. It also allows feedlot operators to hedge against an increase in the price of Feeder Cattle before the operator is ready to purchase them for their lot. Once in the feedlot, cattle undergo an aggressive feeding process over the next three to five months, during which they gain an additional weight for a total of 1200 to 1500 pounds.įeeder Cattle futures contracts allow participants, such as producers, to hedge a decline in price between the time calves are born and when they are sold to feedlots. After it is born, it is weaned and allowed to graze for up to nine months in order to reach the minimum weight, at which point it is sent to a feedlot. A newborn calf averages 70 to 90 pounds when it is born, typically in the Spring. In the case of speculators, they provide them with tools to capitalize on potential profit opportunities in the livestock markets.įeeder Cattle are weaned calves that have been raised to a weight of 600 to 800 pounds. They allow participants such as producers, feed lot operators, meat packers, importers and exporters, to deal with the price risks associated with the sale or purchase of livestock and meat products. The livestock complex now includes futures and options on Live Cattle, Feeder Cattle and Lean Hogs.ĬME Group Livestock futures and options provide the ability to manage these market scenarios. Livestock futures began trading at CME Group in 1964, with the listing of Live Cattle futures. A number of factors can impact livestock production and meat processing and procurement, including weather, disease, the cost of animal feed and changing consumer diets. As with many industries, being involved in livestock also means being exposed to risks that could affect profitability. The livestock industry is a global market, with livestock and meat being produced, processed and consumed all over the world. ![]()
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