!) You are in the midet of harvesting co your storage bins. Assume the cash com pri trading at $3.95/bu. You plan to store the anticipate will be about the last week o northeast Indiana. The basis this year is unus basis continuing into late November 17 under the last weck of November, iivne decline between now and late November short storage period, you decide to heag futures today (10.17.19) at $3.95 and then November Manasting corn this fall and inet placed in Onn hu. of corn in ane ! the cash com price today is $4.20/bu, and Dec. CBT corn futures are plan to store the corn until harvest is over and the corn is dry, which you last week of November, and then sell it at your local grain elevator in Is this year is unusually strong (positive) and you anticipate the strong meaning you anticipate no change in the basis from Oct. ver. iiuncver, you are concerned that futurs prives would ate November. To avoid the risk of futures prices declining during this you decide to hedge the sale of the corn by selling December CBT com -19) at $3.95 and then offset the hedge when you sell the cash corn in late A. If you lodge the sale of the com today in. com (show your calculations)? Sarvi dio com today (10.17.). what is your Expected Sale Price for this on November 26th you sell the cash corn at $4.00/bu. and, simultaneously, offset ur snort hedge in Dec. CBT corn futures at $3.70. Complete the T-Bar diagram below to usuan ic actions you would take in the cash and futures market both in October and in November. Remember to correctly label all your actions in the diagram and summarize the cash, futures, and basis results at the bottom of the diagram. Date 10/17/19 Cash Futures Basis 11/26/19 Cash Price Received on 11/26 = Net Gain or Loss on Futures = Actual Basis Change = From !!!?to!! Actual Sale Price for the com (show your calculations)? Did this equal the B. What was your Actual Sale Price for the end Expected Sale Price? If not, why not? 2) You are a hog feeder that anticipates needing to purch in late November. You don't have storage sp November, but you are concerned that futu So, you decide to hedge the purchase of the corn today with $3.95/bu. and will offset your long hedge when The basis this year is unusually strong pos into late November meaning you anticipate If you hedge the purchase of the com today (10.17.19). what is your Expected Purchase Price for the corn (show your calculations)? cipates needing to purchase 10,000 bu, of com in the cash market don't have storage space to purchase cash corn now and store it until late u are concerned that futures prices could rise between now and late November. the purchase of the corn today with Dec, CBT corn futures trading at set your long hedge when you purchase the cash com in late November is unusually strong (positive) and you anticipatc thc strong basis continuing vember meaning you anticipate a basis of $+0.25/bu. in late November. Assume that on November 26th you buy the cash corn at $4.00/bu. and, simultaneously, offset your long hedge in Dec. CBT corn futures at $3.70. Complete the T-Bar diagram Deo mustrate the what actions you would take in the cash and futures market. Remember to correctly label all your actions in the diagram and summarize the cash, futures, and basis results at the bottom of the diagram. Futures Basis Date 10/17/19 Cash No Action Exp. in late Nov. 11/26/19 Actual Cash Price Paid on 11/26 = Net Gain or Loss on Futures = Change in Basis Trom Exp. io Adual B. What was your Actual Purchase Price for the corn (show your calculations)? Did this equal the Expected Purchase Price? If not, why not
