Cattle producers and beef packers need to understandbasis determinantsas they develop
price expectations and make pricing, hedging, and forward contracting decisions.
study empirically estimated factors explaining variability in monthly fed cattle
five main results regarding live cattle basis are 1) corn price is an importantdeterminant,
2) a change in the value of the Choice-to-Select spreadpositively affects basis,
in the levels of captive supplies have no significant statisticalor economic impact
4) the June 1995 live cattle futures contract did not impact basis, and 5) both market
fundamentalsand seasonal components are importantbasis determinants