The following questions use the table below on soybean oil. Answer the following questions about an end user needing to purchase soybean oil. One soybean oil contract is 60,000 pounds (lbs).

	Now	Later
Cash Soybean Meal Market	$0.335/lb	$0.346/lb
Futures Soybean Meal Market	$0.3000/lb	$0.311/lb

1) Is the individual concerned about price increasing or decreasing?

2) What is the initial action in the futures market: buy or sell?

3) What is the cash price paid/received by the individual later?

4) Did the individual earn a profit or loss in this hedging situation? Enter profit or loss in the following blank.

5) What is the value (i.e. amount) of the profit/loss on the hedge for one contract (signs matter)?

6) What is the hedged price per bushel on this transaction?

7) If the individual didn't hedge, what would have been the price paid/received for the cash commodity?

8) The individual made the right decision to hedge: Yes or No.

9) What is the net selling (or purchase) price?