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Nebraska | This will be a rough example. You want to sell $4.00 corn but not lose control of the grain for hopes of a basis improvement. You would buy a contract (5000 bu) at $4.00 on the board to lock in price and basis would be set on the sale of the cash grain then you would exit the hedge. Futures go down you make money on Hedge. Futures go up you lose money on hedge but gain on the cash grain. Hope this is clear I might have inhaled to much NH3 tonight. | |
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Define what Hedge means???
