The commodity groups
Livestock commodities
3 min
Livestock is the smallest of the major groups but has features all its own.
The main contracts
- Live cattle — fully grown cattle ready for slaughter, traded on CME.
- Feeder cattle — younger cattle that will be fattened; their price depends partly on the cost of the corn used to feed them.
- Lean hogs — pigs raised for pork.
In Brazil, live cattle (boi gordo) is one of the flagship B3 futures contracts, quoted in reais per arroba. Brazil is the world's largest beef exporter, so the contract is a genuine hedging tool for ranchers and meatpackers like JBS and Marfrig.
What makes livestock unusual
- It is perishable and non-storable. Unlike grain you cannot warehouse cattle for years — animals must be fed daily and have a slaughter window. This breaks the normal storage-based futures pricing logic.
- The feed link. Cattle and hog economics depend heavily on corn and soybean-meal prices. When feed gets expensive, ranchers may bring animals to market sooner, raising near-term supply and lowering prices — then tightening supply later.
- Disease and trade bans. An outbreak (foot-and-mouth, avian flu, swine fever) or an importer's ban can swing prices fast. Brazil's access to the China beef market is a recurring, market-moving theme.
Livestock is a specialist corner, but for a Brazilian audience the boi gordo contract is one of the most relevant commodities of all.
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