Sp$24$ Applied Futures $-$ Grain Hedging Math

Please show your work.

Name: Kimber Wilson

Scenario #$1$

You are a corn producer. Today, May $1,$ you have planted corn and you expect a crop of over $1,035,000$ bushels. You would like to sell $100\%$ of the crop soon after the October harvest. You are fairly certain that prices are heading down, so you want to lock in a price for December delivery. The maintenance margin of $$1,000\mathrm{.}00$ per contract and possible margin calls will not cause you a cash$-$flow problem. You decide to sell two hundred and seven December corn futures contracts.

The December futures price today is $$4\mathrm{.}7525$ and the local forward cash for December is $$4\mathrm{.}5025.$ Brokerage fees for each contract is $$25\mathrm{.}00$ round$-$turn.

In December, futures prices have fallen to $$4\mathrm{.}7425$ and cash prices to $$4\mathrm{.}4925.$

$\backslash$table$[[$Date$,$Cash Market,Futures Market,Basis$],[$May$,$$$4\mathrm{.}5025,$$$4\mathrm{.}7525,$$$-0\mathrm{.}25$