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Feeder Cattle Hedger A hedger in the feeder cattle market is an individual who uses
the futures market to offset price risk when intending to sell or buy the actual feeder cattle. Hedging is possible because
the feeder cattle cash prices and feeder cattle futures prices tend to move in the same direction. However, the difference
between the cash price and the futures price may narrow or widen. The change in the difference between the cash price and
the futures price is called basis risk. Because of the changing basis no hedge can be perfect. Where can you hedge feeder cattle? Feeder cattle can be hedged on the Chicago Mercantile Exchange
(CME). The CME offers a competitive and transparent market place to engage in efficient hedging strategies. If you are interested
in hedging feeder cattle please contact us. One of our experienced feeder cattle traders will be happy to give you a call to discuss
hedging strategies with you.
An Overview of CME Commodity Futures for Hedgers
Click on the link above to download a very informative
.pdf brochure entitled "An Overview of CME Commodity Futures for Hedgers.” It was published by the Chicago
Mercantile Exchange. This is a must read guide for any hedger considering a trade in the feeder cattle market using exchange
traded feeder cattle futures and options.
Click here to contact a commodities broker with experience in the feeder cattle market.
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