PART 1: The following information is available to you regarding cash and futures prices: www. Year 2018 2019 2020 2021 2022 B Cash price on Apr 14 $3.75 $4.59 $4.28 $5.45 $6.33 Cash price on Oct 2 $4.23 $3.98 $4.22 $5.02 $5.81 soubong May corn futures contract Price on Apr 14 $4.10 $4.86 $4.67 $5.69 $6.87 nibe..i mino Hedging without production/consumption Sep corn futures contract Price on Apr 14 $3.97 $4.71 $4.84 $5.55 $6.48 Dec corn futures contract Price on Apr 14 $3.62 $4.31 $4.96 $6.00 $6.37 G Dec corn futures contract Price on Oct 2 $4.20 $4.12 $4.24 $5.45 $6.17 1. Calculate the basis of each year for a corn producer who plants corn on Apr 14 and harvests/sells corn each Oct 2. Then calculate the 5-year simple average basis. (the final answer required here is the 5-year average) Sam C-G pr $ -0.18 Sum B-F 5 Mar corn futures contract Price on Oct 2 $4.96 $4.35 $4.45 $5.91 $6.48 $0.17 Q1) 2 Start: On Dec 2, a feedlot begins making plans to purchase feeder cattle in four months (planned purchase on Mar 2). They elect to hedge the price of their anticipated feeder cattle purchase. The appropriate futures contract is trading at $172/cwt. jog lins 2. Which contract maturity/expiration month would the feedlot use for their hedge? Jan 3. Calculate the feedlot's expected March 2 cash price, if their expected basis on March 2 is -$3.25/cwt. $175.25/Cut 02 End: On March 2, the feedlot purchases cattle. Their cash price $185/cwt. The appropriate futures contract price is $187/cwt. 4. Calculate their realized (net) price ($/cwt). 1

PART 1: The following information is available to you regarding cash and futures prices: 1. Calculate the basis of each year for a com producer who plants com on Apr 14 and harvests/sells corn each Oct 2. Then calculate the S-year simple average basis. (the final answer required here is the 5 -year average) 5SumC6$0.185SumBF=$0.17 Hedging without production/consumption. Q1) Start: On Dec 2, a feedlot begins making plans to purchase feeder cattle in four months (planned purchase on Mar 2). They elect ro hedge the price of their anticipated feeder canle purchase. The appropriate futures contract is trading at $172/cwt. 2. Which contract maturity expiration month would the feedlot use for their hedge? Jon 3. Calculate the feedlot's expected March 2 eash price, if their expected basis on March 2 is $3.25/cwt. $175.25/cut End: On March 2, the feedlot purchases cattle. Their eash price $185/cwt. The appropriate futures contract price is $187/cwt. 4. Calculate their realized (net) price ( $/cwt). 1