– See "Futures Commission Merchant."
FOB - Free on Board is the price (and change of ownership point) of a commodity or product at a specific location. For example, "FOB on-truck, farm gate" means the price includes the buyer's responsibility (and cost) of loading onto the buyer's truck at the farm property.
Fast Market – A term used to describe unusually hectic futures or options market conditions. Many futures exchanges have special trading rules that apply after a "fast market" has been declared by the exchange. An example of a special trading rule would be that even if the futures price is higher that a buy order held by a broker, that order may not be guaranteed to be filled. See "fill or filled".
Fed Cattle – Young, live cattle less than two years old, ready for slaughter.
Feeder Cattle Futures (FC) - Futures contracts traded at the CME representing 50,000 pounds of 650- to 849-pound feeder steers that will enter finishing feedlots. CME Feeder Cattle Futures is a cash-settled futures contract.
(CME) Feeder Cattle Index® (CMEFCI) - The CME calculates the Index every weekday (including holidays). The Index is a seven-day weighted average calculated by dividing the total dollars sold during the seven-day period by the total pounds sold over that period. The price average is based on auction, direct trade, video sale and Internet sales for Medium and Large Frame #1 and Medium and Large Frame #1 and #2, 650 to 849 pound feeder steers in 12 US states. Prices of feeder steers described as being fancy, thin, fleshy, gaunt or full and predominantly dairy, exotic or Brahma breeding are not included. The CMEFCI is used as the cash settlement price for the CME feeder futures contracts on the last day of trading.
Feeding Margin - The amount of profit or loss from feeding hogs or cattle, expressed on a per head basis.
Feedlot Sales - A method of marketing feeder or fed cattle in pens at a feedlot, rather than through an auction market. The sale may be conducted by sealed bid or open auction.
Female to Male Disposal Rate - The ratio of females to males in the total cattle slaughter mix expressed as, for example, 1.09:1 or as 0.90:1. This ratio is an indicator of possible shifts in the size of the cattle herd. The greater the number of females in the ratio the greater the likelihood that the breeding herd is not expanding or will not expand in the near future. See "cattle cycle."
Fence or Window – A term for a specific price risk management strategy, using options (on futures), designed to lock in a higher floor price at the cost of putting a ceiling on price gains.
Fill or Filled – An order to a broker, to buy or sell futures or options, which has been carried out.
Final Payment – The last payment to producers who voluntarily decide to deliver grain to a CWB pool account. The payment is the amount of money still owing to farmers for each type and grade of grain after all previous producer payments and crop year marketing costs have been deducted from CWB total sales income for that type and grade of grain.
Finish - The amount of weight put on a beef animal. Cattle with a high degree of finish are those with a large fat covering for their body type.
First Notice Day - The first day on which holders of short futures can notify of their intentions to deliver actual commodities against a "sell" or "short" futures contract(s). First notice day varies with each commodity and exchange. It usually precedes the beginning of the actual delivery period. See "deliver against futures."
- To trade "flat" is to make a cash grain purchase or sale at a fixed price (flatted, flat price).
- Direct sale carcass price for slaughter cattle negotiated FOB farm gate, regardless of actual grade or weight.
- Cattle having what the trade considers a very large or excessive amount of finish.
Forward Price or Forward Contract – A cash market agreement between a buyer and seller that establishes price, usually for a specified quantity and quality, prior to delivery of the product.
Front Month(s) – The nearby futures contract. "Front months" usually refers to the nearby futures contract and the next futures month.
Frozen Pork Belly Futures - Futures contracts traded on the CME representing 40,000 lb of frozen pork bellies (the underside of the hog) cut and trimmed, in position at a federally inspected packing plant, ready to be delivered.
Full Carry or Full Carrying-Charge Market – A market is described as "at full carry" if the carrying charge is large enough to completely cover the cost of insurance, storage, and interest as well as other incidental costs until the next delivery period. See "carrying charges."
Fully Steady - A steady to upward-trending market.
Fundamental Analysis - The study of basic supply and demand information, and underlying factors that may affect supply and demand, to forecast upcoming prices and market trends.
Futures Commission Merchant (FCM) - An individual or company that accepts orders to buy or sell futures or options contracts on a commodity exchange on behalf of individuals or businesses. FCMs are paid commission for their services and are often called "commodity brokers" or "brokers."
Futures Contract - A standardized contract traded on a futures exchange for the purchase and sale of a specified commodity for delivery at some future time. The contract specifies the item to be delivered and the terms and conditions of delivery. Also known as "futures."
Futures Contract Codes – Single letters that are used on North American commodity exchanges to designate individual futures (and options) contract months. The futures contract codes are listed below:
Futures-First Contract – An unpriced forward contract between a buyer and seller that locks in the commodity's futures price, the amount, and the delivery period for a commodity to be delivered later. The final price is determined at a later date, when the seller locks in the basis prior to or up to the day of delivery, depending on the details of the contract. Also known as an "open-basis contract" or "to-arrive contract."
Futures Month Labels – Each futures month.
- General Agreement on Tariffs and Trade is an international agreement where member countries have agreed to trade within the scope of international rules. GATT member countries agree to expand multilateral trade through progressive improvements in market access by reducing tariff and non-tariff barriers. They also agree to the reduction or elimination of trade distorting domestic supports and export subsidies. The agreement resulting from the latest Round of GATT negotiations, known as the Uruguay Round, was implemented on January 1, 1995. For the first time in the history of the GATT, international trade rules have been applied to trade in agricultural goods and services. See "WTO."
GTC – The abbreviation for "good till cancelled." Usually refers to open orders to buy or sell futures or options at a specified price, until the order is cancelled.
Gilt – Young female hog that has not yet produced offspring.
Graded Delivered - Direct sale carcass price for cattle delivered to plant and meeting a specific grade and weight range.
Graded Storage Receipt – A negotiable elevator receipt issued for grain delivered to a primary elevator. The receipt that entitles the holder of the document to receive delivery of grain of the same kind, grade and quantity as the grain referred to in the document, at the location stated on it, upon surrender of the receipt.
Grading Certificates - Certificates issued by official inspectors, testers, and graders as proof of the quality of a graded commodity.
Grantor – The name given to the maker, writer, or issuer of a put or call option.
Grain Sample - A representative sample drawn from grain at the time it is unloaded. The sample is used in determining the grade, dockage, moisture content, and other characteristics such as the protein content, of the whole parcel of grain being sampled.
Grassers – Young, generally lean cattle destined for summer pasture.
Green - Feeder cattle with a minimum amount of finish or fleshiness, well suited to feeding.
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