In response to feedback from the National Cattlemen’s Beef Association and independent studies by Informa Economics, CME Group Friday announced what it calls enhancements to the live cattle futures market.
For starters, CME Group will add a seasonal discount of $1.50 per hundredweight on live cattle tendered to its Worthing, South Dakota delivery location for the October contract only. Research concluded the discount would better align delivery values with cash market prices.
CME Group will also revise grading and quality specifications and delay the listing of addition futures contracts. With just 20 percent of cattle sales negotiated in cash markets across the U.S., CME Group will delay listing any additional contract months beyond October 2017 to evaluate ways to improve cash market transparency, review cash market developments and consider the introduction of cash-settled products.
(From the National Association of Farm Broadcasters News Service)