March $15$th: A packer needs to buy Live Cattle in early June. Currently the June Live Cattle

$($LC$)$ futures are trading at $$175\mathrm{.}650/$cwt$.$ The expected basis is $$1\mathrm{.}50/$cwt$.$

$$ Does the packer have a long or short cash position? $\_\_\_\_\_\_\_\_\_\_\_$

$$ Does the packer have a long or short futures position? $\_\_\_\_\_\_\_\_\_\_\_$

$$ To hedge: The packer will $\_\_\_\_\_\_\_\_\_\_\_($buy$/$sell$)$ June LC futures at

$$175\mathrm{.}650/$cwt$.$

$$ What is the expected price? $\_\_\_\_\_\_\_\_\_\_\_$

June $10$th:

$$ The packer must $\_\_\_\_\_\_\_\_\_\_\_($buy$/$sell$)$ cattle locally in the cash market at

$$185\mathrm{.}025/$cwt$.$

$$ To offset their future position, they must $\_\_\_\_\_\_\_\_\_\_\_($buy$/$sell$)$ June futures at

$$183\mathrm{.}00/$cwt$.$

$$ What is the actual basis? $\_\_\_\_\_\_\_\_\_\_\_$

$$ What is the realized price for the producer?

o Method $1$:

o Method $2$:

o The hedge resulted in a realized price of $\_\_\_\_\_\_\_\_\_\_\_.$