12/11/2023 0 Comments Oklahoma feeder cattle pricesIf the local price for 500- to 600-pound steers is $175.00/cwt. Estimating the Basisīasis is defined as the cash price minus the futures price (Basis = Cash Price - Futures Price). This eagerness or reluctance is communicated in the changing basis in other words, comparing the local Georgia price relative to the futures market price. Georgia buyers signal their eagerness or reluctance to purchase a commodity by bidding a higher or lower price for it. Basis reflects the supply and demand situation in the local Georgia market, and changes as local conditions change. The difference between Georgia cash prices and the futures market prices is called the basis. However, there is usually a difference between the local Georgia cash price and the price on the CME. Similarly, when futures market prices fall, Georgia prices fall. So, when futures market prices rise, Georgia prices rise. Local cash prices and futures market prices are usually positively correlated for a given commodity. Georgia prices are heavily influenced by - but seldom identical to - the futures market prices on the Chicago Mercantile Exchange (CME). Commodity prices in Georgia are directly influenced by worldwide supply and demand factors reflected in the futures markets. In today's world, futures markets reflect a market of global proportions. Even if a producer never uses the commodity futures market directly, knowledge of the basis can be of great value when making marketing decisions.Ĭommodity futures market price quotations reflect the collective opinion of thousands of traders concerning the overall supply and demand balance for a commodity. A more formal definition of basis is the difference between the cash price and the futures price for the time, place and quality where delivery actually occurs. Basis refers to the relationship between a commodity's cash price in a local market and its futures market price. Understanding the concept of basis is a key element in developing a sound marketing plan. McKissick, Professor Emeritus and Distinguished Marketing Professor, University of Georgia Introduction Griffith, Assistant Professor and Extension Economist-Livestock, University of TennesseeĪnd John C. Curt Lacy, Associate Professor and Extension Economist-Livestock, University of GeorgiaĪndrew P. Feeder cattle prices are currently about 80 percent of the record price levels in late 2014 and will undoubtedly exceed previous high prices at some point in the coming months.R. The highest previous price for these steers was $238.87/cwt. For the heavier feeder cattle, 800-850-pound steer prices averaged $189.53/cwt., the highest price since October 23, 2015. The record price for this weight group was $306.42/cwt. 1 steer prices for the week ending April 7 were $251.41/cwt., the highest price since August 2015. Oklahoma combined auction prices for 500–550-pound, Medium/Large No. Fed prices may increase more slowly or plateau briefly in the summer months but are not likely to have a typical seasonal decline going forward.įeeder cattle prices have not yet reached record levels but are advancing to surpass previous price peaks. The seasonality priced into the markets now may fade as markets trend higher going forward.įeedlot inventories are just beginning to fall with ever tighter feeder cattle supplies and are likely to continue decreasing at least through 2023, pushing fed prices higher. There is good reason to expect the uptrend to continue in 2023. In 20, the strong uptrend in fed prices offset seasonal tendencies, with prices moving continually higher. Will fed prices follow this typical seasonal pattern this year? Figure 1 suggests maybe not. At this time, Live Futures prices do not exceed nearby levels until the February 2024 contract (currently $174/cwt.). This sort of typical pattern is currently priced into the Live Futures with futures prices decreasing from the nearby April (currently just over $171/cwt.) to June (about $163/cwt.) and August ($162/cwt.) before increasing in the October contract ($166/cwt.) and December ($171/cwt.). Where do fed prices go from here? In a steady market, fed prices would typically peak seasonally about now and move lower through the third quarter before increasing to the end of the year. The previous record daily price was $172.08/cwt. This was followed on Friday with at price of $175.87/cwt. The daily 5-Market negotiated cash fed cattle price reported on Thursday, April 6, 2023, by the USDA Agricultural Marketing Service, was $172.33/cwt., a new record daily fed cattle price.
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