CME Group Livestock Futures and Options: Introduction to Underlying Market Fundamentals will provide basic information regarding the cattle and hog industries as well a fundamental economic framework for analyzing prices. The information is divided into two main sections. The first section provides general information on the cattle and hog industries and details the life cycle of each species from birth to slaughter. It also describes the different pricing mechanisms in each respective industry, and how prices are realized in the cash markets. The second section provides information on analytical tools used in price forecasts and discusses economic factors affecting the livestock industry. This section also assists the market participant in locating and understanding the various government livestock reports used in price forecasts.
This publication provides a starting point for the potential trader to begin amassing knowledge. Each market participant must learn about other types and sources of pertinent information and how to use the information available. The emphasis here is on fundamental analysis; however, the novice trader may also want to explore technical analysis and discover the benefits it could add to trading. Some market participants prefer one technique over the other, while others utilize both types of analysis to enhance trading skills. The type or combination of techniques used is solely the preference of the individual.