What is a live cattle contract?

However, unlike Feeder Cattle futures, the Live Cattle contract is physically delivered at expiration. The delivery process provides the option for carcass delivery at a processing plant or a live-graded delivery at an approved stockyard. The contract trades Monday – Friday from 8:30 a.m. to 1:05 p.m. Central Time (CT).

What are the different types of cattle futures contracts?

There are two types of cattle futures contracts — Live Cattle and Feeder Cattle. 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.

How do cattle futures contracts work?

Cattle futures contracts, Varilek explains, allow producers to lock down a price in advance instead of being at the mercy of where the prices are at the time of sale. And for a small commission of each trade, a broker can help determine the best route for the producer to take.