On $1$ November $2019,$ you harvested wheat and put $4000$ bushels into storage at the local elevator. You had not previously hedged any of this this harvest. You decide to sell this grain on $1$ March $2020$ and hedge your price risk using the March futures contract.

As expiration of the March contract approaches, you decide if you will sell, as was your original intention, or if you will roll your hedge forward and sell in May instead.

Assume that your local elevator is a delivery location of the futures contract so that you do not have to consider basis risk, and also assume that there are no commission charges for your futures transactions. The monthly storage cost is R$0\mathrm{.}2$ per bushel. You are given the following information:

Date Wheat Spot Price Prices of March Futures Prices of May Futures $1$ November $2019$ R$11\mathrm{.}30$ R$13\mathrm{.}50$ R$13\mathrm{.}701$ March $2020$ R$13\mathrm{.}45$ R$13\mathrm{.}45$ R$13\mathrm{.}851$ May $2020$ R$13\mathrm{.}82$ R$13\mathrm{.}82$ a$)$Determine the profit$/$loss if you sell wheat in March. $[4]$ b$)$ Determine the profit$/$loss if you roll the hedge forward to May. $[5]$ c$)$ Between the two investment strategies in $($a$)$ and $($b$),$ which one is better? Explain. $[2]$