The CME Group has decided to add a seasonal discount of $1.50 per hundredweight on live cattle tendered to the Worthing, South Dakota delivery point for the October 2017 live cattle futures contract. South Dakota Cattlemen’s Association President Todd Wilkinson is disappointed with the decision and says the CME proposal unjustly penalizes a growing cattle feeding area in favor of market speculators.
He says the next step for the regional cattle groups is to ask South Dakota Senator John Thune to pressure the CFTC to get the CME to reconsider their decision.
Wilkinson says both Iowa and Nebraska cattle producers may be hit hardest by the CME’s decision to add the seasonal discount at Worthing.
Wilkinson is concerned that the CME proposal may further jeopardize an already tenuous cash market.
The CME Group will also revise grading and quality specifications and delay the listing of addition futures contracts. With just 20 percent of cattle sales negotiated in cash markets across the U.S., CME Group will delay listing any additional contract months beyond October 2017 to evaluate ways to improve cash market transparency, review cash market developments and consider the introduction of cash-settled products.
