Comparing prices using basis

摘要

Whether it's trying to minimise your purchase price or maximise your revenue, cattle prices are at the forefront of every lotfeeder's mind. But do you know how well your price compares with other prices for similar cattle, or indeed with the prices you typically pay (or receive) at that particular time of year? Basis is the difference between the price of a physical commodity (or cash price) and the futures price. In the example in table 1, the Dalby saleyard (or cash) price was 323e7kg carcase weight (cwt) and the price for the nearest cattle futures contract on the same day was 3280/kg cwt.