Also, the delivery month used is the one with delivery closest to the time when the livestock are marketed.īasis tables are often report the average or expected basis and some measure of basis risk. Lean hog futures trade until the 10th business day of the month. Trading of a delivery month for cattle futures ceases at the end of the futures delivery month.
The delivery month must be actively traded during the time when the livestock are marketed. Two criteria are used in choosing the futures contract delivery month. The futures contract delivery month used to compute the basis during each period is shown in column 2 of the basis tables in Information File Lean Hog Basis and Information File Live Cattle Basis. Hog basis is calculated using the the Western Combelt price for 51 to 52 percent lean 185 pound carcass.
The basis data are aggregated by approximately two-week periods.Ĭash prices used to compute the live cattle basis are prices at Iowa and Southern Minnesota points for 1,100 to 1,300 pound Choice steers. Hog and cattle basis tables are shown in Information File Lean Hog Basis and Information File Live Cattle Basis. This is opposite from the procedure used for calculating grain basis where the cash price is subtracted from the futures price. A positive sign (+) means that the cash price is higher. A negative (-) sign before the basis number means that the futures price is higher than the cash price.
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