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Live cattle futures contracts represent 40,000 pounds of market ready cattle and are traded electronically on the Globex platform Monday a.m. ET to p.m. ET.
Each Live Cattle futures contract represents 40,000 pounds with a minimum price fluctuation of $. 00025 per pound, or $10 per tick. The contract trades Monday - Friday from a.m. to p.m. Central Time (CT).
A futures contract price reflects what traders think today that cattle will be worth at a specific future time, and the cash market reflects the actual selling price of a physical commodity. As time passes, the cash price and futures price typically converge or come together.
Feeder Cattle consist of calves weighing 600-800 pounds while Live Cattle are cattle fed to the point of harvest weight. A contract size is 40,000 lbs. for Live Cattle or 50,000 lbs. for Feeder Cattle, and they are priced in cents per pound.
Forward contracting is a way for cattle sellers and buyers to price their livestock ahead of an expected sale date. When used properly, forward contracting can reduce price risk. Although there are different types of contracts available to sellers, most forward contracts involve slaughter cattle.