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(b) A soybean processor plans to process 25,000 bushels of soybeans into soybean meal and oil, with each 60 lb. bushel of beans yielding 48
(b) A soybean processor plans to process 25,000 bushels of soybeans into soybean meal and oil, with each 60 lb. bushel of beans yielding 48 lbs. of meal and 11lbs. of oil. On March 25th the price of the May soybean contract on the Chicago Board of Trade was 1300 cents/bushel; that of the May soybean meal contract is $350/ton; and that of the May soybean oil contract is 60 cents/lb. On April 15th, the prices are respectively 1320 cents/bushel, $355/ton and 62 cents/lb. What would have been the net gain or loss in US$, if the processor hacd decided to fully hedge his exposure by undertaking a 'crush' hedge' orn March 25th? Note: The soybean contract is for 5,000 bushels (1 bushel 60 lbs.), the soybean meal contract is for 100 short tons (1 short ton 2,000 lbs.) and the soybean oil contract is for 60,000 lbs. When calculating the number of contracts needed, round to the nearest full contract. (50%)
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