Lean Hogs Hedge Model and Crush Margin Calculator

Board of Trade (CBOT) and lean hog futures from the Chicago Mercantile Exchange (CME).Using the Excel tab “Data”=> “Get External Data”=> “From Web” (Exhibit 5), it is possible toobtain constantly updated data for these prices.Exhibit 5. Importing data from webThis feature will inform the user of all the trading months, as well as other information inaddition to the current price as an additional reference for the user. The web query is set toautomatically update every 15 minutes; this can be adjusted by the user if necessary. It isimportant to note that the user must enable data connections every time they open thespreadsheet to enable this function to work. Other conventions were performed to enhanceautomation, such as formatting the query to not recognize the date format and some functionalconversions of queried names to match other queried names.The information up to this point is all used in the calculator which projects potentialhedging profits on lean hogs. The total cost per hundredweight is formulated first. This is doneby taking the local forward price from Crystal Valley Cooperative. If desired, the user has theoption to input the futures price for corn with the appropriate button, and then manually input abasis in the appropriate column if needed.Soybean meal is tabulated by the futures price for the respective month, and then addedto the projected basis as described to determine the cash price. These prices are multiplied by thenumber of bushels of corn and tons of soybean meal per head in the Feed Composition tab. This8 | Page