A guide to Cattle Futures
Cattle Futures are ideal for those seeking a cattle investment. There are two types of contracts traded. Firstly, there is the Live Cattle contract. Live cattle are animals that have reached an ideal weight, this is around 1,200lbs for steers and 1000lbs for heifers.
Secondly, there are Feeder Cattle Contracts. These are younger animals, typically 6-10 months old. They are animals that are just weaned and sent to the feedlots.
Feeder Cattle Chart
Live Cattle Chart
As you can see from the cattle charts. The cattle prices in both markets have shown a clear upward trend over the last decade.
Cattle is traded on the CME Exchange. Live Cattle contracts represent 40,000lbs, whilst Feeder Cattle Contracts represent 50,000lbs. Margin requirements for both contracts is typically just over the $1,000 mark.
This is certainly an interesting market to trade, it has historically been a good trending market. However, if you want to trade cattle, it is imperative that you fully understand the risks. Losses that exceed your initial margin requirement can result if price moves considerably against your position.
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