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Hedge: - May 2 0 ? t h : Producer plans to sell corn in early November. Currently the December Hedge : - arch 1
Hedge: May : Producer plans to sell corn in early November. Currently the December Hedge : arch th: A packer needs to buy Live Cattle in early June. Currently the June
Live Cattle LC futures are trading at $ The expected basis is
$
Does the packer have a long or short cash position?
Does the packer have a long or short futures position?
To hedge: The packer will
buysell June LC futures at
$cwt
What is the expected price?
June :
The packer must
buysell cattle locally in the cash market at
$
To offset their future position, they must
buysell June futures at
$ cwt
What is the actual basis?
What is the realized price for the producer?
Method :
Method : Question points: VolumeOpen Interest Calculation.
Fill in the numbers for Volume and Open Interest in the following table.
Question points: VolumeOpen Interest
Fill in the numbers for Volume and Open Interest in the following table.
corn futures are trading at $ The expected basis is $
Does the producer have a long or short cash position?
To hedge: The producer will
buysell Dec corn futures at $
What is the expected price?
Nov. :
The producer must
buysell corn locally in the cash market at
$
To offset their future position, they must
buysell Dec futures at
$
What is the actual basis?
What is the realized price for the producer?
Method :
Method :
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