Harrington's Sort & Cull
John Harrington DTN Livestock Analyst
Fri Aug 15, 2014 02:42 PM CDT

After all these years, I'm beginning to wonder if I ever actually understood the concept of livestock hedging. Traditionally schooled that cash and futures would eventually converge toward a predictable relationship, I suddenly feel like a geography graduate from Genoa State, class of 1491.

Late-summer basis levels are absolutely crazy, displaying strength (i.e., spot cash sales towering over nearby futures) never seen before in the annals of risk management history. On average, feedlot sales closed the week $5-6 over spot August live; sale barns sold 700-800-pound yearlings $6-$7 over spot August feeders; and pork producers sold butchers as much as ...

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