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It is January 15. A soybeans producer is looking to protect himself against a decrease in the price of soybeans. The producer expects to sell
It is January 15. A soybeans producer is looking to protect himself against a decrease in the price of soybeans. The producer expects to sell 95,000 bushels of soybeans on May 15. Suppose a put option contract on soybean futures with a strike price of $12.50 per bushel has a premium of 50 cents per bushel. The May futures price of soybean for delivery in May is currently $12.06 per bushel, the basis is $2.20 per bushel under. One futures contract is 5,000 bushels of soybean. At the close of trading on May 15 (the last settlement date), the May soybean futures price was trading at $9.30 per bushel, and the basis is $2.75 per bushel under. What is the farmer's net cash price for soybean (per bushel) when the put option hedge is lifted on May 15? (Answer to two decimal places)
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