MacDonalds needs to buy 500,000 bushels of apple on Jan 31st, and wants to use either the Jan or Feb futures to hedge its risk. The current spot price is $36 per bushel and Jan futures are trading for $40 per bushel while the Feb futures are priced at $42 per bushel. The standard deviation of monthly changes to the spot price of apples is $2.5 per bushel. The standard deviation of monthly changes to the futures price of Feb apple contracts is $4.3 per bushel, as compared to Jan futures at $5 and the correlation between spot and futures price changes is 0.74. Each contract is for 10,000 bushels of apple. Which futures contract should MacDonald use and what strategy should the company follow? (Describe the hedge in detail including opening and closing of the futures)