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Hedging with production/consumption On May 10, a soybean producer is assessing her marketing opportunities. She expects to produce 48,500 bushels of soybeans at harvest on

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Hedging with production/consumption On May 10, a soybean producer is assessing her marketing opportunities. She expects to produce 48,500 bushels of soybeans at harvest on Oct 20. She chooses to hedge her soybean price. The appropriate futures contract is trading at $12.50/bu. She is very risk averse and wants to limit her speculative price exposure as much as possible (considering both cash & futures). Her expected basis is -$0.20/bu. Later , on Oct 20, she sells 41,800 bushels of soybeans for a cash price of $14/bu. The appropriate futures contract is trading at $14.15/bu. 7. Determine her overall outcome (realized revenue) from both her cash and futures positions. Using the same setup from the above problem (the soybean producer): Consider her overall outcome if she hedges her crop based on the following futures market positions... Hedge 10,000 bushels on May 10. The appropriate futures contract is trading at $12.50/bu. Hedge 5,000 bushels on June 25. The appropriate futures contract is trading at $13.55/bu. Hedge 10,000 bushels on Aug 5. The appropriate futures contract is trading at $14.90/bu. On Oct 20, she sells 41,800 bushels of soybeans for a cash price of $13/bu. The appropriate futures contract is trading at $14.15/bu. 8. Determine her overall outcome (realized revenue)from both her cash and futures positions

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