PURE HEDGE
| CATTLE |
In my opinion, the medium to short term outlook on the cattle market looks to be neutral to bullish. The cattle market in the near term is facing supply concerns for the 1st quarter and are making traders take long positions in the market, in my opinion. 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
*Cost in above table does not include commissions and fees
| MONTH | STRIKE | PRICE | PREMIUM COST |
| DEC | 146 | .225 | $90 |
| 144 | .125 | $50 | |
| 140 | .100 | $40 | |
| FEB | 148 | 1.250 | $500 |
| 146 | .900 | $360 | |
| 144 | .650 | $260 | |
| APR | 154 | 2.775 | $1110 |
| 152 | 2.200 | $880 | |
| 150 | 1.750 | $700 |
LIVE CATTLE– CALLS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| DEC | 156 | .550 | $220 |
| 158 | .225 | $90 | |
| 160 | .100 | $40 | |
| FEB | |||
| 156 | 2.975 | $1190 | |
| 158 | 2.100 | $840 | |
| 160 | 1.425 | $570 | |
| APR | |||
| 160 | 3.800 | $1520 | |
| 162 | 2.925 | $1170 | |
| 164 | 2.200 | $880 |
*Cost in above table does not include commissions and fees
FEEDER CATTLE–CALLS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| JAN | |||
| 188 | 1.400 | $700 | |
| 190 | 1.050 | $525 | |
| 192 | .800 | $400 | |
| MAR | |||
| 188 | 3.675 | $1837.50 | |
| 190 | 3.050 | $1525 | |
| 192 | 2.525 | $1262.50 | |
| APR | |||
| 190 | 4.550 | $2275 | |
| 192 | 3.875 | $1937.50 | |
| 194 | 3.250 | $1625 |
*Cost in above table does not include commissions and fees
FEEDER CATTLE–PUTS
| MONTH | STRIKE | PRICE | PREMIUM COST |
| JAN | |||
| 180 | 4.175 | $2087.50 | |
| 178 | 3.225 | $1612.50 | |
| 176 | 2.450 | $1225 | |
| MAR | |||
| 180 | 4.925 | $2475 | |
| 178 | 4.100 | $2050 | |
| 176 | 3.350 | $1675 | |
| APR | |||
| 182 | 5.025 | $2512.50 | |
| 180 | 4.200 | $2100 | |
| 178 | 3.475 | $1737.50 |
*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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