Base and Precious Metal Producer
National Canadian Airline
Large Soybean Operation
- Farmer expects harvest of at least 10,000 bushels of soybeans and wants to protect himself in June against the possibility of falling prices
- Our analysis showed that the cash price for new-crop soybeans is $6 and the price of November (delivery month for new-crop) bean futures is $6.25
- In June, short hedge crop by selling two November 5,000 bushel soybean futures contracts at $6.25
- In fall, when cash and futures prices have fallen, lift hedge by purchasing November soybean futures at $5.95 when selling his cash beans to local elevator for $5.72 a bushel
- Outcome: The gain in the futures market offsets the lower price the farmer receives.
Contact us to find out how we can work with you to identify the strategy appropriate for your overall financial goals.
