Assume you decided to store and hedge the wheat in July. It is now October 1, 2019 and you need some cash flow. You are going to lift the hedge and sell the stored wheat. The KC wheat futures prices at harvest are 10/1 DEC $6.35/bu. MAR20 $6.40/bu. MAY $6.55/bu. JUL $6.37/bu. SEP $6.47/bu. DEC $6.55/bu. Complete the following T-account below to examine its effectiveness. Assume the current basis is 15 cents per bushel stronger than expected. Date Cash Futures Basis 7/1 2019 Forward Price = $ /bu. contracts (Buy or Sell) (#) of wheat (contract month & year) @ $ /bu. $ /bu (expected) 10/1 2019 Cash Wheat @ $ /bu. contracts (Buy or Sell) (#) of wheat (contract month & year) @ $ /bu. $ /bu (actual) Futures Gain/Loss $ /bu. Calculate the net price. Cash price $ /bu. Production hedge gain or loss $ /bu. Storage hedge gain or loss $ /bu. Net Price $ /bu.

E Assume you decided to store and hedge the wheat in July. It is now October 1, 2019 and you need some cash low. You are going to lit the hedge and sell the stored wheat. The KC wheat futures prices at harvest are $6.35vbu. $6.40 bu. $6.55 bu $6.37/bu $6.47/bu 6.55 bu 0 DEC MAY UL SEP DEC Complete the following T-account below to examine its effeetiveness. Assume the current basis is 15 cents per bushel Date Cash Futures Forward Price S 2019 (Buy or Sell) (#) of, (contract month & year) wheat Cash WheatSbu 10/1 2019 contracts (Buy or Sell) (#) of, (contract month & year) wheat Futures Gain/Loss Sbu Calculate the net price. Cash price Production hedge gain or loss Storage hedge gain or loss Net Price E Assume you decided to store and hedge the wheat in July. It is now October 1, 2019 and you need some cash low. You are going to lit the hedge and sell the stored wheat. The KC wheat futures prices at harvest are $6.35vbu. $6.40 bu. $6.55 bu $6.37/bu $6.47/bu 6.55 bu 0 DEC MAY UL SEP DEC Complete the following T-account below to examine its effeetiveness. Assume the current basis is 15 cents per bushel Date Cash Futures Forward Price S 2019 (Buy or Sell) (#) of, (contract month & year) wheat Cash WheatSbu 10/1 2019 contracts (Buy or Sell) (#) of, (contract month & year) wheat Futures Gain/Loss Sbu Calculate the net price. Cash price Production hedge gain or loss Storage hedge gain or loss Net Price