In my opinion, the outlook for the cattle market has put in a near term high, today’s cattle on feed report showed a bullish report but came in line with expectations. Cash market trades have seem to stabilize a little giving support to the market as well but has been on light volume overall. In order to take full advantage of price discovery, we must keep an astute eye on potential slaughter numbers and monthly Cattle on Feed reports. Please take a look at the below listed puts and calls, so we can have a productive conversation about hedging your beef production using real examples. Also, select the link at the bottom to use our Cattle producers’ B/E calculator to have a more defined outlook at how you can protect your production. Keep in mind, commissions and fees are not included in the cost of the option.
LIVE CATTLE– PUTS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| DEC | 146 | .075 | $30 |
| 144 | .075 | $30 | |
| 140 | .025 | $10 | |
| FEB | 148 | .850 | $340 |
| 146 | .700 | $280 | |
| 144 | .500 | $200 | |
| APR | 154 | 2.300 | $920 |
| 152 | 1.775 | $710 | |
| 150 | 1.375 | $550 |
*Cost in above table does not include commissions and fees
LIVE CATTLE– CALLS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| DEC | 156 | .175 | $70 |
| 158 | .050 | $20 | |
| 160 | .025 | $10 | |
| FEB | |||
| 156 | 3.000 | $1200 | |
| 158 | 2.075 | $830 | |
| 160 | 1.350 | $540 | |
| APR | |||
| 160 | 4.600 | $1840 | |
| 162 | 5.650 | $2260 | |
| 164 | 6.850 | $2740 |
*Cost in above table does not include commissions and fees
FEEDER CATTLE–CALLS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| JAN | |||
| 188 | 1.150 | $575 | |
| 190 | .800 | $400 | |
| 192 | .575 | $287.50 | |
| MAR | |||
| 188 | 3.500 | $1750 | |
| 190 | 2.850 | $1425 | |
| 192 | 2.300 | $1150 | |
| APR | |||
| 190 | 4.400 | $2200 | |
| 192 | 3.675 | $1837.50 | |
| 194 | 3.075 | $1537.5 |
*Cost in above table does not include commissions and fees
FEEDER CATTLE–PUTS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| JAN | |||
| 180 | 3.175 | $1587.50 | |
| 178 | 2.325 | $1162.50 | |
| 176 | 1.650 | $825 | |
| MAR | |||
| 180 | 3.925 | $1962.50 | |
| 178 | 3.175 | $1587.50 | |
| 176 | 2.525 | $1262.50 | |
| APR | |||
| 182 | 4.200 | $2100 | |
| 180 | 3.450 | $1725 | |
| 178 | 2.825 | $1412.50 |
*Cost in above table does not include commissions and fees
CATTLE PRODUCERS HEDGING CALCULATOR
C:\Users\pMcGinn\Documents\Cattle Producer calculator.xlsx
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