Which of the following statement(s) is CORRECT according to the above (Contract sizes for corn and soy bean futures are unchanged)?

i. Between May 2020 and July 2020, spot soy bean prices are expected to go down.

ii. If the demand for ethanol is expected to go down further in the future, corn futures prices is also expected to go down (all else staying equal).

iii. There should be an arbitrage opportunity in the corn and soy bean futures market by taking long position on soy bean futures and short position on corn futures.

iv. The return on a spread strategy that took long position on May corn futures and short position on May soy bean futures became less profitable in 17 April 2020.

A. i and ii

B. iii and iv

C. ii and iv

D. ii,iii and iv

PLEASE HELP ME ANSWER THIS QUESTION

For farmers, especially in the U.S., choosing between corns and soy beans is an important decision making for their crop portfolio management. There are many different reasons for farmers to choose between corns and soy beans including how they change the soil after harvesting (If you are interested, you may search for corn / soy bean rotations). Among many different reasons for corn and soy bean demands, probably the most important reason for corn demand is for production of ethanol (one of the most important bio-fuels). Also, soy bean is the most important source of food for livestock, especially pigs. You may remember that there has been a trade war between the U.S. and China and the tariff on soy beans has been one of the biggest issue due to the importance of pork in China. As such, corn and soy bean futures are one of the most important futures contract in the market and speculators bet on the price difference between corn and soy bean futures (as the strategy is on the price "difference", we call this type of trading strategy as "spread" strategy, that is the spread between equivalent corn and soy bean futures.) Home - Markets Markets Analysis SOYBEAN PRICES TURN LOWER, FRIDAY'S MARKETS REMAIN MOSTLY HIGHER THE DOLLAR IS WEAKER AND CRUDE OIL DROPS BELOW $20 PER BARREL. By Mike McGinnis 4/17/2020 INDIANOLA, Iowa -- On Friday, the CME Group's farm markets close mostly higher. At the close, the May corn futures closed 21/2 higher at $3.221/4. July corn futures finished 3 higher at $3.2914. May soybean futures settled 41/4 lower at $8.3234. July soybean futures ended 31/2 lower at $8.421/4. July wheat futures closed 334 higher at $5-331/2. July soymeal futures settled $3.00 per short ton lower at $293.10. July soy oil futures closed 0.01 higher at 26.67 per pound