You plan on selling 67 steer calves in January that you expect to weigh 750 pounds each. You have ovserved the following prices ($/cwt) over the last 3 years:

CashCME FCBasis2007$89.00$99.00a.___________2008$94.00$103.00b.___________2009$83.00$94.00c.___________

What is your expected basis for January 2010 (3 year average)?d.___________

Market Information 9/9/09

Current Cash 750 lb steer$87/cwtJan FC Futures$101/cwt

If you placed a hedge on 9/9/09 using Jan futures, what is your expected net sale price?

Assume that on Jan 25 you sell your feeder cattle for $85 per cwt at the local auction and that Jan. FC Futures are at $94 cwt. Show the results of a Futures hedge you placed on September 9 and offset on January 25.

----------|

Date|

________|

------------------------------|

Cash|

_______________________|

--------------------------------||

Futures||

_________________________||

-------------------------------------|

Basis|

_____________________________|

9-Sept|

|

________|

e.|

|

_______________________|

g.||

||

_________________________||i.|

|

_____________________________| 25-Jan|

|

________|

f.|

|

_______________________|

h.||

||

_________________________||j.|

|_____________________________|

k.NSP = ____________