A T-account in the table below for a feedlot that places feeder cattle on feed in September. Use the information in Table 8.1 (or the CME Group's website) to determine the appropriate futures contract expiration month for this feedlot. Also use the T-accounts in Figure 8.6 as a guide.

•      Beginning of the planning period (September): The appropriate futures contract is trading at $130.00 per cwt when the cattle are placed in September.

•      End of the planning period (January): The cattle are finished and ready to be sold. The spot price the cattle will receive is $120.00 per cwt. The appropriate futures contract is trading at $118.00 per cwt. 

	Spot (Cash) Market	Futures Market
September (place cattle on feed)		Futures contract at $130.00 per cwt
		A
		B
January (live cattle finished)	Sell live cattle to packer at $120.00 per cwt	Futures contract at $118.00 per cwt
		C
		D

Table 8.1 Futures Contract Examples. Product Type Grain Grain Grain Oilseed Livestock Livestock Live cattle Dairy Commodity Exchange Corn CBOT Livestock Feeder-cattle Soft Hard red; winter wheat Soft Soft red; winter wheat Soybeans Lean hogs Class III milk Cotton Coffee CBOT CBOT CBOT CME CME CME CME ICE ICE Contract Size 5,000 bushels 5,000 bushels 5,000 bushels 5,000 bushels 40,000 lb 50,000 lb 40,000 lb 2,000 hundredweight 50,000 lb 37,500 lb Par Quality #2 yellow No. 2; 11% protein No. 2 #2 yellow 65% choice/ 35% select; steers/heifers; 1,050-1,500 lb 700-899 lb; med and Irg frame #1 and #1-2 feeder steers Class III Delivery Months Strict low middling: 12/32nd in Arabica Mar, May, Jul, Sep, Dec Mar, May, Jul, Sep, Dec Mar, May, Jul, Sep, Dec Jan, Mar, May, Jul, Aug, Nov Feb, Apr, Jun, Aug, Oct, Dec Lean value hog Feb, Apr, May, carcass Jun, Jul, Aug, Oct, Dec Jan-Dec (all) Jan, Mar, Apr, May, Aug, Sep, Oct, Nov Mar, May, Jul, Oct, Dec Mar, May, Jul, Sep, Dec