1. When July 1^st rolls around, you offset your futures position. The July futures contract price is now $6.55/bu. Also, on July 1^st, you sell the wheat that you have harvested on the cash market price. The basis differential in the local cash market is 15 cents under the board. Assume there is no broker fee
2. What is your per bushel profit or loss in the futures market? (4 pts.
3. What is your total profit/loss in the futures market? (4 pts.)
4. Accounting for profit/loss in the futures market, what is the effective price per bushel, also called the net priceper bushel, you receive for your wheat? Hint: you will have to adjust the futures price by the local basis to determine the local cash price you received for your wheat. Show the math. (8 pts)