Imagine it is February 1, 2023. You are a buyer for a soybean meal manufacturer. Youre considering
Question:
Imagine it is February 1, 2023. You are a buyer for a soybean meal manufacturer. You’re considering participation in the September futures contract markets for soybeans and soybean meal. Soybeans futures are at 1306’6; soybean meal futures are quoted at 415.5. The cash price for soybeans at Midland Marketing’s Yocemento elevator is $12.67. Soybean meal costs $399.60. Assume you predict soybean prices will rise and soybean meal prices will decrease.
a. Would you buy or sell soybean futures?
b. Look up the specs for soybean contracts. Put the futures and cash price of soybeans in the same proper units.
c. By participating in the futures market what price of soybeans are you trying to achieve?
d. What is the current basis for soybeans?
e. Would you buy or sell soybean meal futures?
f. Look up the specs for soybean meal futures. Put the futures and cash price of soybean meal in the same proper units.
g. By participating in the future market what price of soybean meal are you trying to achieve?
h. What is the current basis for soybean meal?
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III