1. Introduction to Commodities
  2. Commodities: Cocoa
  3. Commodities: Coffee
  4. Commodities: Copper
  5. Commodities: Corn
  6. Commodities: Cotton
  7. Commodities: Crude Oil
  8. Commodities: Feeder Cattle
  9. Commodities: Gold
  10. Commodities: Heating Oil
  11. Commodities: Live Cattle
  12. Commodities: Lumber
  13. Commodities: Natural Gas
  14. Commodities: Oats
  15. Commodities: Orange Juice
  16. Commodities: Platinum
  17. Commodities: Rough Rice
  18. Commodities: Silver
  19. Commodities: Soybeans and Soybean Oil
  20. Commodities: Sugar
  21. Commodities: Wheat
  22. Understanding Commodities Trading

Modern cattle-raising can be traced back at least 8,500 years to Europe and the Middle East. Cattle first appeared in the U.S. during the 16th century when Spanish explorer Ponce de Leon brought the animals to Florida in 1521; organized ranching began in Florida in 1565. Today, cattle are raised around the world and are used for milk, meat, leather and labor.

“Live cattle” refers to cattle that have reached the necessary weight for slaughter – typically about 1,250 pounds. Once feeder cattle reach a certain weight, they are sent to feedlots, where they are fattened into live cattle and sold to meat packers. (See the "Feeder Cattle" section in this tutorial for information in trading in that commodity.)

Contract Specifications

Ticker Symbol

LE (CME Globex)

Contract Size

40,000 pounds

Contract Months

G, J, M, Q, V, Z

Trading Hours

CME Globex: Monday – Friday, 9:30 a.m. – 2:05 p.m.

Last Trading Day

Last business day of the contract month

Price Quote

U.S. dollars and cents per pound

Tick Size

$0.00025 per pound ($10 per contract)

Production

After a nine-month gestation period, calves are born weighing between 55 and 100 pounds. With a natural lifespan of about 15 years, cattle can grow to 1,900 pounds. The U.S. produces about 19% of the world’s beef, making it the largest producer in the world. Other top producers include Brazil, the European Union, China, India and Argentina.             

Price Drivers

The price of live cattle is influenced by the following factors:

  • weather (which affects crops like hay and corn, which serve as cattle feed)
  • seasonality
  • global demand for beef
  • food safety (recalls and outbreaks, such as bovine spongiform encephalopathy)
  • value of the U.S. dollar

 

 

 


Commodities: Lumber
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