# Feeders should trade the basis by watching the cash

> A technical commentary says feeder cattle offer a reasonable chance to hedge feedyard inputs, and that the wide basis will be closed by futures trading higher if cash does not decline as expected. The author notes feedyards appear to manage weights well while packers may be signaling otherwise.

- Date: 2017-04-06 · published 2017-04-06T12:00:00.000Z
- Category: market · region US · magnitude low
- Page: https://feedsoft.ai/events/71635-feeders-should-trade-the-basis-by-watching-the-cash
- Commodities: [Feeder Cattle](https://feedsoft.ai/c/FCATTLE.md), [Live Cattle](https://feedsoft.ai/c/LCATTLE.md)

## Why it matters

A wide basis means futures could rally toward cash if cash fails to fall as expected, so feeder buyers should weigh hedging feedyard inputs against that convergence risk.

## Read by commodity

- FCATTLE: neutral
- LCATTLE: neutral

## Sources

- farmprogress.com: https://www.farmprogress.com/marketing/feeders-should-trade-the-basis-by-watching-the-cash

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.