12. You are feedlot operator. You will need to purchase feeder cattle in June and you will do so on the local market at the going price. Suppose you know that you can sell the fed cattle at $1.50/ib, but you want to offset any price risks. To do so, you use the futures market. Answer the following: (20 pts) What position are you in the local market? What position should you take in the futures market to offset the price risk? Suppose the current futures contract price for feeder cattle is $1.25/lb. Construct a table that illustrates your per pound equity if the June contract price is one of the following: $1.05/lb., $1.15/lb., $1.25/lb., $1.35/lb.. $1.50/1b