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Ridgway, IL | IL Cattle Man, I agree that corn and cattle dont move in Lockstep, there is some lag between the 2. But i do believe that overtime they generaly move in the same direction. Here is a chart showing October fed cattle prices, vs. december corn. I know it is not a perfect hedge, however i also do not have the hedging costs associated with a direct hedge on october cattle futures e.g. LRP insurance or options.
What i am trying to illistrate with this chart, is that you can sometimes reduce risk by doing other things than direct hedging cattle. I am biased somewhat in my opinion, in that i am somewhat bullish cattle and ever so slightly bearish corn over the course of my 9-10 month feeding cycle. So selling my corn, rather than chasing the decling fed cattle market lower trying to put a floor in feels better to me. I don't want to sound like i am advocating this for anyone, but for me, it feels right.
 (corncattle.png)
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 corncattle.png (47KB - 34 downloads)
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back to basics-feeding cattle -protecting your bottom line
