TOPICS DAIRY MARKTG
TOPICS DAIRY MARKTG ECON 338A
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This 8 page Class Notes was uploaded by Ms. Ari Lesch on Saturday September 26, 2015. The Class Notes belongs to ECON 338A at Iowa State University taught by Staff in Fall. Since its upload, it has received 39 views. For similar materials see /class/214447/econ-338a-iowa-state-university in Economcs at Iowa State University.
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Easlc Livestock Futures Pa Principles of Livestoc axmmwm mm sum hum Miaminmschmxamwaumxumux 02va s Pam m Fm swapan mm mmm Wm M mummy m mam Mme ehw quotm vmwsmavm kwnhmumsmmesstsF 5m deman mm mums mum3M m c ummscamns Base mm mm mm usu mmquot has 43 msmsses m memamcs mm ndmv mm mm a WWW mm Mums mmmm Inn cancem kdvquotv 5apmceduruhzlHawshvziadwmducersla Mama Ivmnvusessvmumm swslbecuHed and Sam seme and mmem be yummy dumr mm quotm min mm em 5 mmwa rsetcwh mamumb rvasmanman mummy quotmm 5 WWW mmwmmamwmmwm cm cammnennn Wm 35mm m Mumscan m mm mg Mm Wmm mmmvavmm camnanJune 2n 3 m m m muscmmm Mums cammem m mew hwy m m as I1 k Hedging F7432 spemmmmmmmpmm smmumm m mumsam m m muna cammems mm mm mm aamwmmmmmmm th mm m vmdueensmenmuadehmrme havsmme m mam mam m Mm m m mm 1 mm mm m resabhvnanvnann wmmuexwmanmvda amnvmmslmngwan See mamaquot n rmmemsmssanmushsemenem the Amhrmllc n12 H kinquot m a m suuvmcm m e m 2 mm esumms mu may m m w wamaseuvwrsmnm 55 exveuedmensulmeumuhehedve smbewmwemd m mm asmmwmmmmmmmqum 3115 am mmwmsumm nnmmvs an w hwau delan mm mammmmnn m Dk ahoma 3mg UnwErs y expected hedged price represents an offer made by the futures market for cattle delivered to the local market in April Next potential hedgers must decide if they are willing to take this offer To arrive at a minimum price that will be acceptable an estimate of production costs will be needed Producers will need to evaluate their ability and willingness to take the risk of a price lower than that offered by the futures market Based on the difference between expected hedged price and breakeven price the producer may then make the hedging decision Assuming that the producer estimates a breakeven price of7000 and has an expected hedged price of 7400 400cwt will be available to cover fixed costs overhead management charges and profits Finally the decision whether or not to hedge will be influenced by the producer s assessment of market outlook Hedging is one of several marketing alternatives available to the producer ln instances where there appears to be a high probability that prices will fall before the cattle are ready to market hedging may be the best marketing alternative Producers whofeel that prices mightgo up but still need some risk protection against lower prices may be more interested in minimum pricing with options on futures than in fixing prices by hedging See OSU Extension Facts 487 for more discus sion of live cattle options trading edge the producer would sell a futures contract Returning to Example 1 in October thefeederwould sell April live cattle futures in quantities equal to the number of cattle subjecttoforward pricefordelivery in April By selling theApril futures at 7500cwt an attempt is made to forward price or hedge the cattle at a price of 7400 Before hedgers can make the initial sale of a futures contract their broker must find someone who is willing to buy a contract For every seller there must be a buyer and for every buyer a seller Afterthe initial transaction the hedger or the seller in this case has an obligation to deliver and the buyer has an obligation to take delivery The buyer may be either a trader trying to hedge the purchase price of cattle or a speculatorwhothinksthe market isgoing up Assumingthat the buyer is a speculator the buyer will want to offset the futures commitment in the future If prices for April futures drop they will likely cut losses short by selling an offsetting futures contract before making a margin call If prices forApril futures move as high as expected the contract will be sold to another trader This would offset the commitment to take delivery ofthe cattle by transferring that commitment to a new bu er Manytrades may take place between the time a hedge is placed and the time it is completed It may appear by the volume of futures trading that many cattle are being traded whereas the same cattle commitments are being traded many times Open interest as reported for futures trading reflectsthe numberofopen positions ie commitmentswhich have not been offset that exist in the market at any point in time As long as the hedger has a commitment to deliver someone will have the opposite commitment to take delivery althoughthatcommitmenttotak may quot g hands many times Before the futures contract matures the hedger will complete the hedge by selling the cattle and buying a futures contract to offset the previous sale This action will clear all commitments associated with the initial sale No one not even the hedger will be obligated to make or take delivery of 39 39 g39 39 39 The39neu39 ei39 quot the cattle at the local market Although no deliveries were made the futures market will have performed its task Be 4322 tween the time of the hedger s initial sale and later purchase L u will I I I have been avoided by the hedger This concept of shifting risk may be made clearer by returning to the previous example of cattle hedged in October for April delivery Assume that by April local cash market prices were 6800cwt instead ofthe hedged price of7400 expected in October a difference of 600 In this case if the producer had not hedged the price received for cattle would be only 6800 the cash price at the local market Since the producer hedged the risk of that 6800 price was absorbed by the futures market The April futures contract represents a physical claim to live cattle during the April delivery period A lower cash market price means that the April futures price will also be lower lffutures prices were significantly higher than cash market prices at the delivery points cattle traders would sell April futures and make deliv eries lf futures were significantly lower than cash prices traders would buy April futures and take delivery This possibility of delivery forces futures prices to approach cash market prices at par delivery points as the time of contract maturity nears This also brings futures prices into line with the cash market in other areas as well Assume that with a local cash price of 6800cwt in April the April futures which were sold at 7500 in October were forced to drop to 6950 byApril The hedgerwould make a profit in thefutures market of 550cwt by being able to buy backthe commitment at a lower price than the price at which it was sold this example if the futures trader had been a specula tor a 550cwt profitwould have been made But since the traderwasa hedger having possession of cattle in the amount of the futures position 550 must be applied to the 6800 39 39 quot 39 39 quot 39 quot39 gthetotal back to nearthe hedged price expected in October The hedger s futures market profits simply offset the lower cash market price for the cattle The 6800 cash price plus the 550 futures profit gives a net realized price of 7350 for the hedged cattle The realized price of 7350 is only 50 different from the expected hedged price of 7400 which is probably typical of the price expected by hedging Any difference between the expected and realized price actual or realized basis Example l showsthe total hedging example including date of transaction type of transaction cash market futures market and basis relationships The expected basis was 100 or 100cwt under the futures price resulting in an expected hedged price in October of 7400 compared to the futures price of 7500 The realized basiswas 1 50 or 1 50 underthefutures price which was the actual difference between the local cash price of 6800 and the April futures price in April of 6950 The basis was 50 different than expected because cash prices were 50 lower than expected relative to futures Thus the 550cwt profit in the futures market did not fully offset the 600 lower cash price received for the cattle nn iderinn both cash and futures results the hedger real ized a net price 50 lower than expected Example 2 shows the same hedging situation except for the assumption that the basis estimate is absolutely correct The realized basis equals the expected basis which was 100 under Therefore the futures price must be 50 lower relative to the cash market price than in the previous example Assume that the hedge was completed at a futures price of 6900 and a cash price of 6800 yielding a realized basis of 1 00 as expected In this case the net realized price will be 7400 which is exactly equal to the expected hedged price Futures profits exactly offset the lower cash price This is called an ideal or perfect hedge It is perfect in that the hedger realized the exact price that he expected atthetime the hedge was place The perfect or ideal hedge is rarely achieved by the hedger Even though the basis is typically much more predictable than cash prices it is still rarely accurately antici pated at the time a hedge is placed If the basis estimate is accurate the hedger will get the price expected for the cattle regardless of whether money is made or lost in the futures market Example 3 shows a situation in which the basis is again assumed to be accurately estimated but in this case the futures price rose between October and April Assume that the April futures price in April was 8000cwt compared to 7500 when the hedge was placed in October The higherfutures price was the result of a higher cash market Thus the hedger was able to sell the cattle locally for 7900 at 100 under the futures prices In this case if the producer had not hedged an unex pected profit would be received from the sale of cattle at a price of 7900 But since the producer hedged it will take 500 of that higher cattle price to offset the futures losses leaving a net realized price of only 7400 In Example 2 the producer sesthe cattle locallyfor 6800 and in Example 3 the cattle sell locally for 7900 But since a hedge was placed the 7400 net hedged price was realized in both cases Regardless of whether the futures market goes up or down the same price is received forthe hedged cattle This is why hedging is often called forward pricing If the futures trader in Examples 2 and 3 had been a speculator theywould either have made 600 as in Example 2 or would have lost 500 as in Example 3 The speculator has no cattle to sell to offset the futures losses or gains But many hedgers are much more concerned with pricing their cattle than with futures profits From a forward pricing standpoint the hedger did equally well in both examples The hedging procedure for hogs is identical to that for cattle Example 4 shows a hog hedging situation Assume that a hedge is to be placed in May for hogs to be delivered in July The hog producer estimates the July delivery basis at 50 under the futures price So the quoted futures price of 5800 represents an offer of about 5750 for the hogs delivered to the local market The producer sells July futures in March to place the hedge By July local hog prices are being quoted at 5400 and the July live hog futures are trading at 5400 giving a 00 basis The hedge is completed with a 400 futures profit which is added to the 5400 price received from the hogs giving a realized net price of 5800 Again as in the first example the expected price was missed by50 because the basis estimate was missed by 50 But in this case the miss was favorable In all cases the hedger will receive the price expected from hedging only to the extent that the basis was J i JP quot the39neu39 er 39 39 39 g risk associated with the unpredictability of cash market for the much smaller risk associated with a more predictable basis The last example is one of a buying hedge on feeder cattle Assume that a cattle feeder has forward priced slaughter cattle and feed costs so an 8000 feeder cattle price will give quot39 quot 39 39 39 n and the cattle will not be placed on feed until October Octoberfeeder cattle pricedat7850and quot 39basis is 150 The hedging transaction and price relationships are shown in Example 5 In this case the feeder wants to hedge the buying price so the hedge is initiated by buying on October futures The hedge is completed in October by buying the feeder cattle locally and selling feeder cattle futures to offset the previous purchase Assuming 8500 must be paid for the cattle and the October futures is sold for Exam pie 1 Transactions Date Cash Market Futures Market Basis October Expected hedged Sell April Futures Expected price at 7400 at 7500 100 April Sell cattle Buy April futures Realized oca at 6800 at 6950 150 Difference 600 Profit 550 Difference 50 Hedging Results 68 00 Cash Price Futures Profit Realized Price 7350 Exam pie 2 Transactions Date Cash Market Futures Market Basis October Expected hedged Sell April Futures Expected price at 7400 75 0 100 April Sell cattle Buy April futures Realized oca at 6800 at 6900 100 Difference 600 Profit 600 Difference 00 Hedging Results Cash Price 6800 Futures Profit m Realized Price 7400 Example 3 Date Cash Market October Expected hedged price at 7400 April Sell cattle locall at 7900 Difference 500 Hedging Results 79 Cash Price 00 Futures Profit 500 Realized Price 7400 Transactions Futures Market Basis Sell April futures Expected at 7500 100 Buy April futures Realized 80 00 at Profit 500 100 Difference 00 Exam pie 4 Date Cash Market March Expected hedged price at 5750 July Sell hogs locall at 5400 Difference 350 Hedging Results Cash Price 5400 Futures Profit 400 Realized Price 5800 Transactions Futures Market Basis Sell July futures Expected at 5800 050 Buy July futures Realized t 540 00 Profit 400 Difference 50 Exam pie 5 Date Cash Market August Expected hedged price at 8000 October Buy feeder locall at 8750 Difference 700 Hedging Results Cash Price 8700 Futures Profit Realized Price 7950 Transactions Futures Market Basis Buy October futures Expected at 7850 150 Sell October futures Realized at 8600 Profit 750 100 Difference 50 8600 the realized basis will be 100 instead of the 150 anticipated Thusthe 750 futures profit will more than offset the 700 higher purchase price giving a net purchase price of 7950 for the feeders compared to an expected price of 80 00 In these hedging examples brokerage fees and interest coston margin moneywould have to be deducted fromthe net price Brokerage fees are variable but generally amount to about 5060 per contract or roughly 1520cwt of live stock hedged lnitial margin deposits vary according to livestock prices and market conditions Assuming that the futures market is as likely to move in hedgers favor as it is to move against them the long run interest cost can be calcu lated on the initial margin requirement Assuming a four month hedge at 12 percent interest the interest cost on a hedge might run another 1015 per cwt So hedging costs Title vl dl id of 25 35 might have to be deducted from the expected hedged price in making the hedging decision and in calculat ing the final results Summary The hedging examples show that hedging is simply forward pricing Futures profitsor losses offsethigheror lower cash market prices bringing the hedger back to a realized price near the expected hedged price Hedging does not guarantee the highest price but gives a more certain price The speculator makes or loses money in the futures market The hedger makes profits from livestock The futures market is used only to help establish prices and manage the risk of price changes 1964 Executive Order 1 1246 as amended Title lXoftne Education Amendments of 1 972 Americans With Disabilities Act ot1990 and ctne policies practices or procedures r c Tnis includes but is not limited to admissions employment financial aid and 0 or national origin sex age religion disability or status as a veteran in any cri s educational services i 01914 Extension Service Oklanoma State University StillWater Oklanoma 4324 Department of Agriculture Samuel E Curl DirectorofOklanoma Cooperative State Univer Agricultural for4000 copies 7151 KMGS 0693 Basic Livestock Futures Part1 Livestock Futures Markets axmmwm mm sum hum Miaminmschmxamwaumxumux 02va s Pam mmsmm myquot rummage m mscxsses m mammals m Wm am c es my quota gummyquot m WW MM mm m Fm 5m my suchqueshansas W mu n as canha s h m c 5 m mm 39 Em mquot m 432 ascussesme mm mm m MW vummmmmsw y ameswevumuns bvwmchmesvecu amrsc m mevsks hi vm dcusweve m m w 1 1mmmvmsgamma m m m an m mm mum 5mm may came mth wk me We a m 4 Wm m mm necessiw a mum MW man We reammmsmuwwemmwme n 15 s Mm mmmm mummm Msaneav vladekvmmewhdhevm Wm MM camme mm m Me M m m 19m mmm m mm m m as sememem mm elm cu m WIS mm WW causmv he canoa1s m aselvadmvvamme a new m mm Mevcam e mum mmdu mam mm aumsmm we man came cama swau dbecashsemed A Fulu summed m cammadms Gamma My a m md anvbevev mm H mmwmummm Saychanvemawnev smpmlhemmvesmamasaccamvhshedbvi Davey muymm m Wm mmmuwmmw Dams cuuemav as mame vamadmn A mums Cnnlm cawmmw mm me made m memmves mm mm use mum39s canoa1s Ammves mm camde Dk ahoma 3mg UnwErs y trader who buys a futures contract makes a legal commitment to accept delivery ofthe futures commod ity Futures contracts represent specific delivery com mitments The essential specifications for a futures contract are quantity and quality of the commodity location of delivery time of delivery and delivery proce dures Traders must know specifically what is to be delivered where it isto be delivered when it isto be delivered and how delivery is to be accomplished before they can accurately determine a price at which they are willing to buy or sell these commitments Feeder cattle futures contracts specify the quanti ties and qualities of feeder cattle and the cash settle mentterms ofthetransaction Feederfutures contracts are cash settled against a composite cash feeder cattle price index OSU Extension Facts 509 discusses cash settlement in more detail All futures commitments for a given commodity are identical except for time of delivery Thus all commit ments for a given delivery time are identical Uniform contracts encourage a large volume oftrading needed to insure highly competitive markets For example during September 1991 over 7500 contracts per day were traded atthe Chicago Mercantile Exchange CME for 40000 lb delivery units of Choice grade slaughter steers to be delivered during October of 1991 The prices atwhich the roughly 7500 commitments per day were made ranged from highs of 7500cwt late in the month to levels below 7000 during the first week in September There is no better practical way offair and equitable pricing than to have a large numberof buyers and sellers in the market Since all futures contracts are uniform hedgers must make adjustments in the quoted futures prices Adjustments must reflect the quality of livestock they expect to produce and deliverto their local market at the time their livestock will be ready for sale by the market ing methods they ordinarily use This procedure is called a basis adjustment which is explained briefly in this Fact Sheet and in detail in OSU Extension Facts 433 Current Report 522 details the more important specification of major livestock futures contracts Futures Exchanges and Clearing Houses Futures contracts are traded at central locations which are called futures exchanges For example the Chicago Mercantile Exchange is by far the largest market for livestockfutures The exchanges do not buy or sell futures contracts however their activities are critical to a futures market First the exchanges provide the physical facilities or building where futures trading and the associated activities take place The actual buying and selling of futures contracts take place in the trading pits of the 4302 futures exchanges These trading pits are stairsteplike structures which rise around a center pit With limited space possible forfacetoface trading it is necessary that actual trading be limited to traders who own mem berships on the exchanges However most exchange members are brokers who trade futures contracts for other people So anyone may trade futures contracts although they must trade through a broker at the ex change The commodity exchange in conjunction with the Commodity Futures Trading Commission establishes trading rules and regulates trading of contracts Rules and regulations are designed to maintain highly com petitive markets and to promote fair equitable and orderly trading for all who use the markets The Com modity Futures Trading Commission is an independent government agency which oversees all futures trading with the specific charge of protecting the public interest in all futures markets The trading rules include such things as the 300 contract speculative position limit for any single delivery month in the live cattle futures market The 150cwt limit to price changes from the previous day s closing price is an example of a rule which facilitates orderly trading The exchanges also control contract specifications designate delivery months monitor contract deliveries and in general tend to the details which allow the markets to work Futures exchanges employ a clearinghouse con cept in handlingthetransactions oftheir members The clearinghouse which is maintained by the exchange verifies and records all futures transactions The clear inghouse also assumes legal responsibility on both sides of all futures transactions In other words the clearinghouse guarantees fulfillment of all obligations made by exchange members Futures traders have the full financial assurance of the Chicago Mercantile Ex change to back any obligation due them in the futures market An additional function of a futures exchange is to collect and distribute complete and accurate market information concerning all futures markettransactions Price information is made available continuously during all futures trading days Brokers located all over the world have direct lines of communication to the ex changes and often know the prices at which transac tions were made within seconds of the time ofthe trade Price and market information is released through the various wire services at set time intervals during the da Daily summaries of prices volume of trading trading positions deliveries and other market informa tion are widely published and reported by the various news media Futures Prices Futures contract prices are determined by public auction in the pits ofthe commodity exchange Traders Thursday February 11 1993 CattleLive CME 40000 Lb Cents Per Lb Seasons Lifetime Open High Low Close Change High Low Feb 93 8200 8210 8152 8207 27 8210 6810 Apr 7965 7972 7915 7947 07 7972 6825 June 7390 7395 7340 7357 07 7460 6680 Aug 7187 7190 7157 7170 07 7265 6610 Oct 7320 7320 7282 7300 07 7330 6755 Dec 7350 7350 7325 7330 20 7385 6810 Feb 94 7280 7280 7240 7240 32 7350 7090 Est vol 12596 vol Wed 10888 open int 24908 117 act as their own auctioneers supplementing verbal outcries with hand signals Although trading may ap pearto be chaotic to the outsider each trader is able to accurately communicate necessary conditions con cerning an offer to sell or bid to buy to others in the pit The prices at which transactions take place reflect the supply ofand demand forthe contractswhich represent commitments of delivery ofthe specified commodity at some time in the future For each sale there must be a buyer and for each purchase there must be a seller Sellers ask as high a price as they think they can get and buyers offer no more than they thinkthey will have to pay Thus brokers representing buyers and sellers from throughout the US and the world bring together those forces of supply and demand at one place and time The result is reflected in futures market prices Dailyfutures price summaries aretypically reported in the form shown in the table above The first column of abbreviated months represents the various delivery months for which live cattle con tracts were traded on February 11 1993 Thus the different prices in different rows represent price differ ences associated with different delivery dates The next column designated as open represents prices at which contracts for the various delivery months were trading when the market first opened for trading on the morning of February 11 The column of high prices represents the highest prices at which transactions were made for the various contracts during the trading day The column of low prices represents the lowest prices at which transactions were made for the various contracts during the trading day The next column close represents prices at which transactions were being made when the market closed in the afternoonl Sometimes price quotations will include settle instead of close lftrade is 39 I eme 39 39 39 39 39 umllule price at the closing bell On most days the closing price is the settle or 39 e settlement prIc The change column refers to the change in clos ing prices comparing today s closing price to the clos ing or settlement price forthe previous day Some price quotations give the previous day s closing or settlement price rather than the change Both methods yield the same information The last two columns represent the highest and lowest prices that have been recorded for the various contracts since they have been traded Contracts are generally traded for a year or more prior to delivery Thus on February 11 1993 the February 1993 contract had been traded for about a year with the prices recorded during that time as high as 8210 and as low as 6810 The February 1994 contract on the other hand had been traded for only about two weeks in the range of 7350 to 7090 The estimated sales volume at the bottom of the report refers to contracts traded for all delivery months Thus on February 11 1993 there were about 12596 contracts of cattle at 40000 lb each for which commit ments were made in the futures markets The open interest number represents the number of commit ments for delivery that existed on that date for all contracts These commitments may be offset before the contract maturity dates or may result in deliveries Futures Market Traders There are two basic types oftraders in the futures markets speculators and hedgers Speculators are those traders who buy and sell futures contracts for the purpose of profiting from differences between buying and selling price They will buy contracts if they think they will be able to sell them later at higher prices and sell contracts when they expect to be able to buy later at a lower price They profit only to the extent they are able to anticipate future price changes There are many types of speculators There are short term speculators who might buy and sell the same contracts one or more times in the same day attempting to profit from price changes within the daily trading ranges Others study price trends over longer periods oftime using various charting techniques and technical 4303 market factors in trying to anticipate a future rise or decline in prices They buy and sell asthey interpret the trends in the markets and may hold a commitment for a day a week a month or longer Speculators using fundamental supply and demand analysis will take a futures position when feeling that futures prices are higher or lowerthan they will be when the futures reach maturity and thus come into line with cash markets They hold their position until futures prices come into linewiththeirexpectations ortheirexpectations change Most speculators probably use some combination of technical and fundamental analysis in developing and implementing their trading strategies Hedgers are traders who use the livestock futures markets to offset price risk on their livestock They would not knowingly take a position in the futures market that would lose them money but futures profits or losses need not be their primary concern Hedgers take futures market positions so that futures profits or losses will offset profits or losses on their livestock A cattle producer for example would sell a futures con tract to offset the price risk of cattle on feed If cattle prices fall then futures prices would fall also giving a profit in the futures market to offset the lower price for the cattle The forward pricing hedger makes profits from producing livestock and simply uses the futures market to price them The price riskthat is reduced by hedging may be ofgreater importance than any realistic potential profit in the futures market The principal justification for establishment of fu tures markets is for hedging purposes However speculators account fora large proportion ofthe volume oftrading for most futures markets Some have ques tioned whether such speculative activity is good for a market but in most cases speculative activity is neces sary to make a market which the hedger can use effectively First a large volume of trading which the speculators provide is necessary if hedgers are to be able to buy and sell contracts when needed to conduct their hedging operation Secondly it is generally the speculators who are willing to take the price riskthat the hedgers are trying to avoid There are some cases where too much speculative activity has made hedging difficult In general however a large volume of specu lation makes a good hedging market and it is highly unlikely that any ofthe currently active futures markets could long exist without speculative activity Title vi ai iu Futures Markets as a Source of Price Outlook Information Futures market prices are determined bythe supply of and demand for the delivery commitments repre sented by the futures contracts Many speculators and hedgers use fundamental supply and demand analysis to some extent as a basis for their decisions Thus futures prices are a reflection of current supply and demand for future delivery of the traded commodity However many have interpreted futures prices as accurate cash market outlook prices For example many feeder cattle have been purchased at prices based on favorable futures prices for slaughter cattle These futures prices have later proven to be poor price predictors actual cattle prices have been lower than indicated earlier by futures prices and large feeding losses have resulted Futures trades are not always based on fundamen tal cash market expectations As mentioned previously many speculators trade futures on the basis of current shortterm trends Thus they are concerned about the price of contracts tomorrow or a week from now rather than price at time of delivery Also there are many hedgers who give little weight to price outlook in their hedging decisions They are more concerned with reduced price risk than with maximum price level Transactions based on these motives need not reflect future price outlook for the traded commodity even though prices in these cases reflect the current value of the delivery commitment Thistype oftrading may limit the accuracy of futures as a source of outlook informa tion Most objective studies indicate that futures prices are a valuable source of outlook information but they are far from perfect Futures probably are about as accurate as most other outlook sources The primary advantages of futures prices as a source of outlook are that they are readily available through most news me dia and they quickly reflect changing market condi tions However they often overreact limiting their accuracy as price predictors The most important point forthe hedgerto remem ber about futures prices is that the futures market is offering a price for livestock but the only way assured of getting that price is to hedge A hedger cannot depend on getting a price reflected in the futures market unless he places the hedge at the current price and successfully carries the hedge through to completion 1964 Executive Order 1 1246 as amended Title lXofthe Education Amendments of i 972 Americans With Disabilities Act ofiQQO and otne poiicies practices or procedures r c This includes but is not limited to admissions employment financial aid and o or national origin sex age reiigion disability or status as a veteran in any oti s educational services ii men Extension Service Oklahoma State University StillWater Oklahoma 4304 tateUniv for4500 copies 7149 0693 GSD Revised Departrnent of Agriculture Samuel E Curl DirectorofOklahoma Cooperative Ag icultural
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