Suppose today is February 10, 2017, and your firm produces breakfast cereal and needs 190,000 bushels of corn in May 2017 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might rise between now and May. Use Table 23.1 a. What total cost would you effectively be locking in based on the closing price of the day? (Round your answer to the nearest whole number, e.g., 32.) b. Suppose corn prices are $3.57 per bushel in May. What is the profit or loss on your futures position? (Enter your answer as a positive number. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Total cost $ $ a. b. TABLE 23.1 Sample Wall Street Journal Futures Price Quotations Metal & Petroleum Futures Contract Open Open High hilo Low Settle Chg interest Copper-High (CMX)-25,000 lbs; $ per lb. Feb 2.6735 2.6735 2.6715 2.6480 -0.0125 672 March 2.6660 2.6765 2.6410 2.6535 -0.0130 120,434 Gold (CMX)-100 troy oz; $ per troy oz. Feb 1239.40 1243.50 1226.90 1235.10 -2.50 1,387 April 1242.70 1246.20 1226.10 1236.80 -2.70 288,888 June 1246.10 1249.00 1230.00 1240.00 -2.70 63,531 Aug 1250.10 1252.00 1235.10 1243.10 -2.80 18,296 Dec 1254.00 1256.90 1239.00 1249.20 -2.70 29,516 June 18 1266.00 1266.00 1254.80 1259.00 -2.50 4,419 Palladium (NYM)-50 troy oz; $ per troy oz. Feb 732.85 732.85 732.85 772.60 2.80 1 March 770.60 778.80 768.00 772.55 2.80 22,948 June 771.00 780.00 770.40 774.00 2.85 6,503 Sept 775.30 777.00 775.10 775.00 3.60 17 Platinum (NYM)-50 troy oz; $ per troy oz Feb 978.80 979.10 978.80 1019.20 2.80 42 April 1019.60 1032.10 1016.20 1022.20 2.80 59,479 Silver (CMX)-5,000 troy oz.; $ per troy oz. Feb 17.750 17.815 17.750 17.720 0.037 179 March 17.780 17.845 17.615 17.741 0.036 113,427 Crude Oil, Light Sweet (NYM)-1,000 bbls; $ per bbl. March 52.37 53.21 52.37 53.00 0.66 385,634 April 52.98 53.70 52.95 53.46 0.55 280,780 May 53.42 54.10 53.41 53.88 0.51 192,554 June 53.90 54.45 53.90 54.25 0.49 264,679 54.79 55-35 54.79 Dec Dec'18 55.10 55-50 55.04 NY Harbor ULSD (NYM)-42,000 gal; $ per gal. March 1.6360 1.6624 1.6345 April 1.6443 1.6693 1.6435 Gasoline-NY RBOB (NYM)-42,000 gal; $ per gal. March 1.5510 1.5811 1.5471 April 1.7600 1.7800 1.7575 Natural Gas (NYM)-10,000 MMBtu; $ per MMBtu. March 3.143 3.189 3.110 April 3.212 3.253 3.179 May 3.269 3.311 3.240 June 3-339 3.365 3.298 July 3.385 3.413 3-350 Oct 3.385 3.423 3.358 Agriculture Futures Corn (CBT)-5,000 bu; cents per bu. March 369.50 372.75 367.50 May 377.25 380.25 375.25 Oats (CBT)-5,000 bu; cents per bu. March 256.00 257.50 250.00 May 248.25 254.00 246.00 Soybeans (CBT)-5,000 bu; cents per bu. March 1057.00 1061.50 1045.00 May 1067.25 1071.50 1055.50 Soybean Meal (CBT)-100 tons; $ per ton. March 340.70 341.60 335.90 May 344.80 345.80 340.10 Soybean Oil (CBT)-60,000 lbs; cents per lb. March 34.67 34.98 34.47 May 34.96 35.26 34.76 (ODD) 55.21 0.49 229,809 55-32 0.37 111,505 1.6415 .0055 111,133 1.6500 .0059 72,273 1.5702 .0175 112,099 1.7741 .0122 85,512 3.141 .015 197,215 3.209 .013 146,224 3.272 .017 137,143 3.330 .019 79,485 3.380 .020 79,570 3.392 .020 93,442 369.50 -1.25 500,405 377.25 -1.25 346,739 254.50 .50 4,155 253.00 3.00 3,027 1050.50 -8.25 248,998 1061.50 -7.75 210,368 338.40 -2.80 126,399 342.60 -2.70 122,484 34.67 -.02 123,991 34.95 -.03 118,319
