9/27/2023 0 Comments October feeder cattle futures![]() stocker cattle index, January 1993 to October 1998. The new Stocker Cattle futures contract can help stocker cattle producers/users have a better price risk management tool than the old Feeder Cattle futures contract because of better price correlations and the smaller contract size.įigure 1. The small contract allows for smaller-scale producers to use futures/options contracts to manage price risk. Additionally, the new stocker futures/options contracts call for 25,000 pounds instead of 50,000 pounds for the feeder cattle contracts. Note that the stocker index trends fairly closely with the feeder index but differs enough that a hedge with stocker futures/options would be more effective than a cross hedge with feeder futures/options. Hedgers that currently use the Feeder Cattle contract to cross hedge their stockers find a substantial amount of difference between the movements of the two prices. The price relationship between the price index of stocker cattle and feeder cattle is shown (Figure 1). The new 25,000-pound Stocker Cattle contract will allow for better price risk protection than previously available via cross hedging with the Feeder Cattle contract. Before this new contract, stocker cattle operations had to use either the fed (live) cattle or feeder cattle futures or options contacts to cross hedge their price risk. The Chicago Mercantile Exchange now offers a new contract on stocker cattle in addition to the live fed cattle and feeder cattle futures and options contracts. (Print Friendly PDF)Ĭow-calf operators, winter wheat grazers and other cattle operators have a new tool to manage the risk of price changes with stocker cattle. Catlett, Professor, Department of Agricultural Economics & Agricultural Business and Extension Economist College of Agriculture, Consumer and Environmental Sciences New Mexico State University. The USDA quoted the wholesale pork carcass cutout at $117.21 per cwt, up $1.96 from Friday.Using the Stocker Cattle Futures and Options Contracts to Manage Price Risks In the wholesale beef market, prices for choice cuts of boxed beef (BEEF-US-CH) rose $1.42 to $304.16 per hundredweight (cwt), while select cuts rose 26 cents to $276.99 per cwt.ĬME October lean hog futures (LHV3) settled down 1.600 cents at 82.650 cents per pound. Corn and wheat futures surged in response to Russia's escalating attacks on Ukraine's grain export infrastructure. However, in a semi-annual cattle report also released late on Friday, the USDA said farmers were raising the fewest number of beef cows since at least 1971, signaling tight cattle supplies overall.ĬME August feeder cattle (FCQ3) futures fell 2.675 cents on Monday to settle at 243.250 cents per pound as corn futures soared 6%, signaling higher feed grain costs. ![]() The high placements figure suggested that poor conditions persisting on grazing pastures encouraged producers to send more cattle than expected to feedlots last month, analysts said. Department of Agriculture on Friday said producers placed 1.68 million cattle in feedlots during June, up 3% from 2022, while analysts, on average, had expected a decline. But back months, including all contracts for 2024 delivery, ended higher on reminders of tightening U.S. Cattle on Feed report.ĬME August live cattle futures (LCQ3) settled down 1.275 cents at 178.750 cents per pound and most-active October (LCV3) fell 1.600 cents to 180.300 cents per pound. Live cattle futures on the Chicago Mercantile Exchange Group closed mixed on Monday, with nearby contracts pressured by surging feed grain prices and bearish data in Friday's monthly U.S.
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