AAEC 3301 Assignment 3B

Name: ___________________

1. Type of hedge? ___________

(Answers in $/bushel only)

Cash	Futures	Basis?
Sept 1 Owns 5,000 bushels of soybeanswith a price objective of $10.50 per bushel	Sept 1 Sells 5,000 bushels of January soybeans at $12.00 per bushel
Nov 1 Sells 5,000 bushels of soybeans at $9.60 per bushel	Nov 1 Buys 5,000 bushels of January soybeans at $10.50 per bushel
Gain ________? Loss ________?	Gain ________? Loss ________?
NET HEDGING: Gain_______ ? Loss__________ ? NET HEDGE SELLING PRICE_________

2. Type of Hedge?__________

(Answers in $/gallon only)

Cash	Futures	Basis?
Sept 1 Sells 29,000 gallons of ethanol for April delivery at $ 2.70 per gallon	Sept 1 Buys 29,000 gallons of July ethanol at $ 3.20 per gallon
April 1 Buys 29,000 gallons of ethanol for April delivery at $ 2.90 per gallon	April 1 Sells 29,000 gallons of July ethanol at $ 3.35 per gallon
Gain ________? Loss ________?	Gain ________? Loss ________?
NET HEDGING: Gain_______ ? Loss__________ ? NET HEDGE BUYING PRICE__________