1. A cereal manufacturer wants to maintain costs on future deliveries of 107, 500 bushels of wheat at 567.4 cents per bushel. They notice that the hedge ratio is very close to 1, so they enter into 5,000 short contracts for October delivery at 568.1 cents per bushel, another 5,000 contracts for December delivery at 569.0 cents per bushel, another 5,000 contracts for February delivery at 570.5 cents per bushel, and, finally, for April delivery the same number of contracts at 574 cents per bushel. The company closes out contracts as the last trade date approaches.

	Holdings	Price at Sell-to-Open	Price at Buy-to-Close
Wheat Holdings	107,500 bu long	567.4c/bu	586.4c/bu
October wheat	5 contracts	568.1c/bu	569.5c/bu
December wheat	5 contracts	569.0c/bu	570.8c/bu
February wheat	5 contracts	570.5c/bu	580.5c/bu
April wheat	5 contracts	571.4c/bu	586.4c/bu

What was the cost(gain) of this hedge to the company?