CME feeder cattle futures are futures contracts traded on the Chicago Mercantile Exchange (CME) for delivery of feeder cattle. Feeder cattle are young cattle that are typically between 6 months and 1 year old and are sold to feedlots for further feeding and fattening before they are sent to slaughter.
CME feeder cattle futures provide a way for buyers and sellers to lock in a price for future delivery of feeder cattle. The futures contract represents 50,000 pounds of feeder cattle and is priced in US dollars per pound. The contract months for CME feeder cattle futures are January, March, April, May, August, September, October, and November, with the nearest three months being the most actively traded.
The price of CME feeder cattle futures is influenced by a variety of factors, including supply and demand for feeder cattle, feed costs, weather conditions that may impact grazing and feed availability, and overall economic conditions. Like other agricultural futures markets, the CME feeder cattle futures market can be volatile, with significant price swings in response to these factors.
Traders and investors can use CME feeder cattle futures to hedge against price volatility, speculate on price movements, or gain exposure to the feeder cattle market. For example, a rancher who produces feeder cattle may use CME feeder cattle futures to lock in a price for their future production, while a feedlot operator may use CME feeder cattle futures to manage their costs for future cattle purchases.
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