Hedge: $-$ May $20{?}^{th}$ : Producer plans to sell corn in early November. Currently the December Hedge : $-$ arch $15$ th: A packer needs to buy Live Cattle in early June. Currently the June

Live Cattle $($LC$)$ futures are trading at $$\frac{175\mathrm{.}650}{c}w.$ The expected basis is

$$\frac{1\mathrm{.}45}{c}wt.$

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

$($buy$/$sell$)$ June LC futures at

$$175\mathrm{.}650/$cwt$.$

What is the expected price?

June ${10}^{th}$ :

The packer must

$($buy$/$sell$)$ cattle locally in the cash market at

$$\frac{201\mathrm{.}025}{c}wt.$

To offset their future position, they must

$($buy$/$sell$)$ June futures at

$$\frac{202\mathrm{.}00}{?}$ cwt$.$

What is the actual basis?

What is the realized price for the producer?

Method $1$:

Method $2$: Question $7(7$ points$)$: Volume$/$Open Interest Calculation.

Fill in the numbers for Volume and Open Interest in the following table.

Question $8(11$ points$)$: Volume$/$Open Interest

Fill in the numbers for Volume and Open Interest in the following table.

corn futures are trading at $$4\mathrm{.}92.$ The expected basis is $-$$$0\mathrm{.}73.$

Does the producer have a long or short cash position?

To hedge: The producer will

$($buy$/$sell$)$ Dec corn futures at $$\frac{4\mathrm{.}92}{b}u.$

What is the expected price?

Nov. ${10}^{th}$ :

The producer must

$($buy$/$sell$)$ corn locally in the cash market at

$$\frac{4\mathrm{.}18}{b}u.$

To offset their future position, they must

$($buy$/$sell$)$ Dec futures at

$$\frac{4\mathrm{.}56}{b}u.$

What is the actual basis?

What is the realized price for the producer?

Method $1$:

Method $2$: