Complete the Taccounts before answering the questions. (Hint: The formula for basis is cash - futures = basis.) 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 $5.45 bu. In May, cash soybeans are $5.45 bu and the November futures price is $5.75/bu. The farmer hedges his position in the futures market. By November, the cash price has declined to $4.80/ bu and the November futures price is $5.10/bu. The farmer lifts his hedge and sells his soybeans at the prevailing price. 1. Is this a short or long hedge? 2. In May, what is the basis? 3. What is the basis in November? 4. Did the basis strengthen or weaken? 5. What is the gain or loss in the futures market? 6. What price did the farmer receive for his soybeans after hedging