Why You Might Consider Investing in Cattle Futuresīelow are some reasons as to why investing in this futures market may be worthwhile: The largest producers of cattle in the US are Texas, Arizona, Kansas, Colorado, Nebraska, California, and Iowa. These cows fall into the “Live” category and are kept there in order to gain enough weight to be ready for slaughter. This weight gain period can take anywhere from 6 to 10 months after the cow is weaned from its mother.Īfter that, the cows are transferred to feeder lots, some of which are large enough to accommodate up to 50,000 cows. The “Feeder” category comprises of cows within the calf stage until they reach a weight of 600 to 800 pounds. The underlying difference between them comes down to the age and weight of the cows. Basically, the value in cattle is clear, demonstrable, and easy to comprehend. We also produce milk from them and their hides are good for leather. One vital reason for the popularity is that cattle have many uses aside from turning into the meat we eat. These contracts have become quite popular since then. This trading market started as far back as 1964 on the CME. For instance, in 1978, America’s former first lady, Hilary Clinton, is said to have converted a $1,000 investment into a windfall of nearly $100,000 through cattle futures trading. However, with a brokerage account, anyone can get involved with futures contracts and gain access to the livestock market. These might include ranchers, leather manufacturers, and businesses in similar industries. The major players in this market are mostly hedgers who are likely involved in a livestock-related business. The prices of these futures contracts are negotiated at futures exchanges, such as the Chicago Mercantile Exchange (CME) and the Brazilian Mercantile and Futures Exchange (BMF). A Brief Guide To Trading Dow Jones Futures.5 Differences Between Trading S&P 500 E-MINI and Micro E-mini Futures.This contractual agreement represents the makings of a futures contract. Instead, the buyer and the cattle producer agree to conduct the trade at an agreed-upon price and time in the future. However, there are instances where the physical ownership of the cattle sold does not change for a few months. Normally, on the day of the sale or a few weeks after the sale, the cattle are moved from one location to another. These include auctions, private treaty, video sales, and other venues. In this article, you’re going to learn about feeder cattle, and live cattle futures.Īs you already know, today’s cattlemen can physically sell cattle any time in a variety of ways. Plus, it affords a feasible way to diversify of your portfolio by shifting some of your focus on commodities instead of traditional asset classes, such as stocks and bonds. It does require a bit of work, but once you get into it trading cattle can be surprisingly rewarding. ![]() Luckily, understanding it isn’t actually difficult. Most people aren’t familiar with how it works or how it can be used to grow an investor’s portfolio. The Cattle Futures Market can be somewhat difficult to grasp.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |