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Farmer Joe guesstimates that he will have 1 , 0 0 0 metric tons of white corn in six months' time. The current market price
Farmer Joe guesstimates that he will have metric tons of white corn in six months' time. The current market price for white corn is $ per metric ton. Joe is worried that the
price of white corn will drop in six months' time. He wants to hedge his exposure but the only available futures contracts are on yellow corn. Joe decides to hedge with the yellow
corn futures as the prices of white and yellow corn generally move together. What kind of hedging is Joe engaged in Please clearly state the answer and explain why?
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