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NCBA seeks changes in live futures contract
The National Cattlemen’s Beef Association (NCBA) is asking the CME Group to move its live cattle futures contract to a position where it converges with the cash market.
Specifically, NCBA is asking that fed heifers be included as deliverable cattle to honor a contract. The cattlemen are also asking for an increase in maximum live weights from 1,500 pounds to 1,650 pounds.
Ed Greiman, a cattle producer from Garner, Iowa and president of the Iowa Cattlemen’s Association, says the objective is to increase the deliverable supply of cattle against the futures market, which would force the futures and cash markets to converge.
“For instance, we’re into April right now—if, for some reason, the futures market was two to three dollars higher than the cash market is going to trade this week, you would see cattle want to deliver against the contract,” Greiman says. “It would then bring the two together and that’s what we need as hedgers. We need those two to reflect each other so that our basis is appropriate.”
Greiman, who headed up an NCBA task force on the issue, says that by bringing futures and cash prices closer together, there should be more transparency as to what is happening in the market.
Tags: cattle, Futures Markets, Iowa, Marketing, NCBA
we do not need heavy wt cattle we need every month delivery every month sts and hfs we do not need lower prices we do not need more tonnage we need profits