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Live cattle futures (LE)

CME contracts on 40,000 pounds of finished steers, quoted in cents per hundredweight, physically delivered from approved feedlots.

Live cattle are finished animals ready for slaughter, and the contract is one of the few that delivers something alive. Delivery is rare and cumbersome, which is why spot-month position limits are among the tightest on the exchange.

Prices are quoted per hundredweight (cwt), so a 40,000-pound contract is 400 cwt. Feedlot margins depend on the relationship with feeder-cattle-futures and corn-futures, captured by the cattle-crush-spread.

Example: live cattle at $185 per cwt is 185 x 400 = $74,000 per contract. A $1 move is $400, and the daily limit of $6.50 per cwt is $2,600 per contract.

Related: feeder-cattle-futures, lean-hog-futures, cattle-crush-spread, cattle-on-feed-report, spot-month

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Bid-ask spread in an order bookSell orders stacked above buy orders with a gap between the best of each.SELLERS (asks)50.0690050.051,40050.0460050.011,10050.002,30049.99800spread = 0.03BUYERS (bids)
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.

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