Kellogg's, the breakfast cereal manufacturer, uses large quantities of corn in its manufacturing operation. Suppose the near-term

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Kellogg's, the breakfast cereal manufacturer, uses large quantities of corn in its manufacturing operation. Suppose the near-term weather forecast for the corn-producing states is drought-like conditions, so that corn prices are expected to rise. To hedge its costs, Kellogg's has decided to use the Chicago Board of Trade's corn futures contract. Should the company be a short hedger or a long hedger?

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