A farmer who has planted soybeans for November harvest estimates that in order to make a profit, he will have to sell his soybeans for $5.48/bushel. In May, cash soybeans are $5.48/bu and the November futures price is $5.76/bu. The farmer hedges his position in the futures market. By November, the cash price has declined to $4.83/bu and the November futures price is $5.10/bu. The farmer lifts his hedge and sells his soybeans at the prevailing price. a. Is this a short or long hedge? Explain. (5 points) b. Calculate the basis in May. Show your work (3 points) c. What is the basis in November? Show your work (3 points) d. Did the basis strengthen or weaken? Explain (5 points) e. What is the gain or loss in the futures market? Show your work (5 points) f. What was the net price received for his soybeans after hedging? Show your work (6 points)