A client has asked you about hedging his production of soybean oil. He expects to sell 360,000 pounds of soybean oil in four months. Soybean oil contracts are available at 60,000 pounds per contract. How could he hedge his position?

Todays spot price is $55 per pound and todays futures price is $60 per pound. If after four months spot price is 50.5 per pound and futures price is 55.8 per pound, what is the overall profit or loss of this company?