5,000 Bushels to Buy $27,500
10% of that to Hedge,& Hedging Costs Go Toward Purchase of Corn
Corn Futures Contract Size 5,000 bushel/Cost per Contract
Spec(per contract)
Initial $1,980.00
Maintenace $1,800.00
Hedge(per Contract)
Initial $1,800.00
Maintnance $1,800.00
Compare that to Buying @ $5.50 a Bushel
Buying Would Cost $27,500 for 5,000 Bushels
Makes Sence to Lock In Cheap Prices by Hedging & Hedge Costs Go Towards the Purchase of the Corn.
Or Contracts Can Be Sold.
I Hope They Hedged!