Agricultural Marketing Glossary – C

CBOT – The Chicago Board of Trade. http://www.cbot.com/

CFTC – The Commodity Futures Trading Commission. The CFTC is independent agency of the US government, created in 1974 to regulate commodity futures and options markets. More details are available at http://www.cftc.gov/cftc/cftchome.htm

CIF - An abbreviation referring to the total of Costs of the commodity, Insurance coverage and Freight to port of destination, included in selling price of the commodity or product and paid for by the buyer.

CKG - An abbreviation for 100 kilograms.

CME - The Chicago Mercantile Exchange, sometimes known as "the Merc."

CWT - An abbreviation for hundredweight or 100 pounds.

Call Option – An option giving the buyer of the option the right, but not the requirement, to buy (go long) a futures contract at a certain price, the strike price, on or before a specified expiry date. See "put option."

Call Premium - The trading price of a call option at a specified strike price. See "strike price."

Canner, Cutter, Utility, and Commercial – The four US slaughter cow grades. Canner cows are thin, emaciated cows. Cutters are "thin to moderate flesh", utility cows carry significant flesh, and commercials are normally younger cows.

Carrying Charge Market - A futures market situation for a particular commodity in which there are higher futures prices for each following futures month, for at least the current marketing year.

Carrying Charges – The cost of storing a physical commodity, such as grain, over a period of time. Costs include insurance, storage, and interest, as well as other incidental costs. It is a "carrying charge market" when there are higher futures prices for each successive contract month. See "full carrying charge."

Carryover or Carryover Stocks - The total amount of a particular grain, oilseed, or special crop in all positions remaining at the end of the crop year. See "In All Positions."

Cash - The actual physical product or commodity as opposed to commodity futures. Also known as "cash commodity," "spot commodity," or "actuals."

Cash Advance - See "Advance Payment Program."

Cash Contract for Future Delivery - A contract between two parties for the purchase and sale of grain or livestock of a specified grade and at a specified price. The contracted product is to be delivered to the buyer by the seller at a specified delivery point and within a specified delivery period. Also referred to as a "deferred delivery contract" in crop markets or a "cash forward contract" in livestock markets.

Cash Crops - Crops that can be marketed at any time without delivery or contract restrictions and for which full payment is received.

Cash Market – Generally, the market where the exchange of the physical commodity takes place in exchange for cash currency between buyers and sellers.

Cash Purchase Ticket - A document in a form specified by the Canadian Grain Commission which includes payment from the buyer. It shows the delivery date, station name and number, grain type, grade, gross and net weight, price, and the amount payable for each delivery of grain or other crop covered by the Canada Grains Act. A cash purchase ticket is issued after delivery into an elevator or licensed buyer. The included payment (cheque) can be cashed at any chartered bank or other financial institution.

Cash-Settled or Cash Settlement – A method of settling the obligations of some futures (or options) contracts after the last trading day of a contract month. In cash settlement there is no actual delivery of the commodity by holders of short (sell) futures positions. Instead of delivery of the physical product, there is a transfer of cash between the short-holder and the long-holder based on the price difference between the original futures contract price and the recent cash price of the commodity. Examples of cash-settled futures contracts are Feeder Cattle and Lean Hog futures traded on the CME. See "CME."

Cattle Cycle - The long-run fluctuation in the size of the cattle herd in response to biological and economic forces. The Canadian and US cattle cycles often, but not always, consist of a seven-year expansion phase, followed by a three-year contraction phase.

Cattle-on-Feed Report - Monthly reports released by the USDA (in the US) and Canfax (in Canada), estimating cattle and calves on feed for the slaughter market based on survey results. The US report is based on feedlots with capacity of 1,000 or more head. The Canfax report covers only Alberta and Saskatchewan. Both reports include cattle placements and marketings but exclude cattle in a feedlot on a backgrounding ration.

Cattle Inventory Reports - Reports outlining total cattle herd size for various classes of animals. These reports are issued biannually showing January 1 and July 1 numbers by both USDA and Statistics Canada.

Charting - The preparation and use of price charts or graphs to use in technical analysis of futures or equity (share) markets. Price movements, average price movements, volume and open interest and many other parameters may be graphed as a method of forecasting prices.

Clearing house - A separate agency or corporation working in conjunction with each commodity exchange to guarantee all completed futures and options buy and sell orders. The clearinghouse also handles all recordkeeping for offset and delivery of futures contracts and exercising of options. The clearinghouse ensures that financial settlement or delivery on futures between all traders is made through its facilities.

Clearing member – A registered member of an exchange clearing house. All trades by non-clearing members or brokers must be registered with and eventually settled through a clearing member.

Close, the - The short period at the end of each daily trading session officially designated by the futures exchange during which all futures and options transactions are considered made "at the close."

Closing Price (or range) - The price (or occasionally the price range) recorded during the period designated by the exchange at the official close.

Cold Storage Report - Monthly reports issued by USDA showing frozen and refrigerated stocks of meats, dairy products, poultry products, fruits, nuts and vegetables stored in refrigerated warehouses.

Colony - The bees in a hive. Typically a colony is made up of one queen and about 65,000 bees in various stages of development.

Commercial – Any company that merchandises - buys and sells - or processes cash grain and other commodities.

Commission house – A futures brokerage company that buys and sells futures on behalf of its customers. The company generates income by the commission that it charges its customers.

Commodity - An economic good, a product of agriculture or mining or, sometimes, limited manufacturing. Services are not included. In agriculture wheat, corn, barley, lentils, canola, oats, feeder cattle, lean hogs, and frozen pork bellies are examples of commodities.

Commodity Exchanges - Centres where actual commodities or commodity futures contracts and options on futures are bought and sold. All organized exchanges have detailed, definite rules to regulate the details of trading procedures.

Commodity Futures Trading Commission – see "CFTC."

Contract codes – See "Futures Contract Codes."

Contract Grades - those grades of a commodity, which have been officially approved by a commodity exchange, as deliverable in settlement of a futures contract (also called deliverable grades). For example, the contract grade of ICE Futures Canada Barley futures is No. 1 Canada Barley weighing at least 48 pounds per bushel or 300 grams/0.5 liter.

Convergence – The tendency for an increase or decrease in the cash price of a commodity and a decrease or increase in the futures price of an expiring, nearby futures month of the same commodity until the cash and futures prices come together by the end of trading of the expiring futures month. Convergence can be, and often is, forced by many market participants arbitraging between the cash and futures markets.

Corner – A situation where a single buyer or seller, or a very small number of buyers or sellers, holds a large share of either the outstanding long or short positions in the futures markets. Buyers or sellers attempt to corner a market so they can influence prices in these markets to their advantage. In the extreme situation, buyers or sellers hold more futures contracts at or near expiry of a particular futures month than the amount of the cash commodity that actually exists.

Cover or Covering - The closing out or offsetting of a short or sell position in any futures contract. A short or sell futures position is "covered" by buying an equal number of the exact same futures contract. Opposite of "liquidation."

Cross-hedge – Hedging to manage a commodity's price risk using a futures contract of a different commodity which has some price relationship to that commodity. For example, feed barley growers might choose to use CBOT corn futures as a hedge to protect against falling feed barley prices.

Cryovac - Plastic, airtight packaging system for fresh products such as beef, pork, lamb, veal, poultry, and seafood as well as dairy products, smoked, and processed meats.

Current Delivery Month – The nearby futures contract, which matures and becomes deliverable during that current calendar month. Also referred to as the "spot month." See "spot month."

Currentness - The percentage of A1 carcasses in the total A1, A2, and A3 weekly cattle kill. A decreasing percentage of A1 carcasses, or decreasing currentness, is an indicator that feedlots are holding back cattle expecting or hoping for higher prices. An increase in currentness indicates that feedlots are marketing cattle as soon as they are ready in response to profitable prices or expected lower future prices.

Custom Feeding - An arrangement of feeding cattle in a commercial feedlot, where the animal is not owned by the feedlot. The animal's owner pays the feedlot either a certain amount per pound of gain, or more commonly, the daily cost of feed, veterinary supplies, and yardage.

Cutability - The yield, expressed as a per cent of the total carcass weight, of all saleable meat cuts from a carcass.

Cutout Values - Daily estimates of the value of a beef or pork carcass based on current wholesale market prices for each part of the carcass. Cutout value is an estimate because only the packers know what the yields are for each component since yield varies from carcass to carcass. Cutout values estimate the returns received by packers for saleable meat.

• In beef, the value of the rib, chuck, round, loin, brisket, short plate, and flank in each carcass is totalled to give an average cutout value.
• In hogs, the value of the ham, loin, ribs, belly, picnic shoulder, Boston butt (part of the shoulder), skin, fat, trim, etc. is totalled to get an average cutout value.

Cycle Analysis - The use of past price cycle patterns to identify possible future price cycles and attempt to predict future market price behaviour.