A few months ago a grain producer bought a put on the soybean futures contract for November 2023 delivery because she wanted to hedge the grain she was going to harvest during the fall. The put she bought had a strike price of $13.50/bu and she paid $0.80/bu for this put. Assume no trading fees here.

[a] Assuming the historical basis in her cash market is around -$0.70/bu in November, what is the minimum selling price she established with this put? Make sure to show all calculations clearly.

[b] Now we move forward and it's November 2023. The producer is selling the grain she just harvested and lifting her hedge. Assume that, on the day she is selling her grain and lifting the hedge, the spot price in her local cash market is $11.85/bu and the futures price is $12.55/bu. What is the realized price of this hedge? Make sure to show all calculations clearly.

[c] In this example, would the farmer be better off with or without the hedge? Why?