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Fed cattle traded $2 to $3 higher on a live basis, mainly at $124, and the five-area weighted average was $120.84 live. Live cattle futures for June were trading about $17 per hundredweight below cash, a record strong basis.
A wide cash-over-futures basis encourages feeders to hedge and signals cash prices should stay firm into convergence. Strong cash fed cattle prices support feeder cattle values.
u.osu.eduSmith atMay 2, 2018Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
June futures trading about $17 below cash shows futures were discounting expected bearish supply and sentiment even as cash rose, explaining futures weakness.
Record futures discount of about $17/cwt to cash shows futures were far out of line with cash, so the drop likely reflects a repricing of heavy June supply expectations.
