Thus, cattle feeders may do better by buying a live cattle put option for cattle in the lot or cattle that they plan to place in the near future. Otherwise, it may be better to wait until a clear market trend is established. The Chicago Mercantile Exchange Live Hog Futures Contract changed to Lean Hogs futures quoted on a carcass basis beginning with February 1997. Beginning with the Feb 1997 contract. Basis is calculated as Cash - Futures.
Negative sign means that futures are greater than cash.
I. Adjust the Lean Hog futures price to the Iowa-S. Minnesota reported live weight price using the historic basis. Compare this price to cost of production and price objectives. Determine how many Lean Hog contracts you need to hedge your production. By June 10, eight percent or 6.5 million acres of the expected 1996 U.S. corn plantings had not yet been planted. Much of the unplanted corn land was in the eastern Corn Belt and South Dakota.