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Wide Difference in Cash & Futures



June Live Cattle were up .95 cents Wednesday with August up 65 cents. With the wide difference in cash and futures even with a little under 3 weeks to go before delivery, convergence is going to take place. It seems like traders are still anticipating more fed cattle ahead in the summer with discounts already in the market so the COF report Friday better show it.

herd of cattle


With large premiums of Lean Hog futures to cash, something has to give. Wednesday, it was the futures and the daily pork market.  August through February closed Wednesday on new contract lows with July within a few pennies of a new low.  Monday and Tuesday appear to have been a dead cat bounce and with June settling at $84.87 and the CME Lean Hog Index at $77.17, the difference is too wide.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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