Live Cattle Futures Price Today (LE=F)
2023.03.04 06:15
Futures contracts for live cattle can be used to hedge and speculate on fed cattle prices. Live cattle futures trading is a common component of a producer’s price risk management program and allows cattle producers, feedlot operators, and merchant exporters to hedge future selling prices for cattle. On the other hand, merchant importers and meat packers can hedge cattle buying prices in the future.
Live cattle buyers and sellers can also enter into contracts for the production and marketing of live cattle deliveries in cash or spot markets that use futures prices as a reference price. Live cattle futures contracts can also be used by businesses that use beef as an input to protect themselves from fluctuations in the price of beef.
The Chicago Mercantile Exchange (CME), which introduced live cattle futures contracts in 1964, is where live cattle futures and options are traded. US cents per pound are used to indicate contract prices. The contract’s minimum tick size is $0.025 per pound, or $10 per contract. Price limits of $0.03 per pound above or below the contract settlement price of the previous day apply to trading on the contract.
There are nine contracts that can be purchased at any time, in that order of their expiration: February, April, June, August, October, and December. Contracts for June 2020, August 2020, October 2020, December 2020, February 2021, April 2021, June 2021, August 2021, and October 2021, for instance, would be available for trading on June 5th, 2020.
Trading for each contract ends at noon CT on the last business day of the delivery month. Deliveries can be made on any day of that month and the first eleven business days of the next one, with the exception of live graded deliveries, which cannot be made on Christmas Eve or New Year’s Eve and must be made on the ninth business day after the first Friday of the contract month.
According to the “Official United States Standards for Grades of Slaughter Cattle” of the United States Department of Agriculture (USDA), 40,000 pounds of 65% Choice, 35% Select, Yield Grade 3 live steers or heifers or producing 65% Choice, 35% Select, Yield Grade 3 steer or heifer carcasses are the contracts’ deliverable assets.
Any individual heifer weighing less than 1,050 pounds or more than 1,350 pounds and any individual cattle weighing less than 1,050 pounds or more than 1,500 pounds must be raised solely in the United States. A delivery unit must exclusively contain steers or heifers.
