Grain Price Hedging Basics

Robert Wisner and Don Hofstrand ( July, 2015 )

Summary

Hedging is defined as taking equal but opposite positions in the cash and futures market. Producer hedging involved selling corn futures contracts as a temporary substitute for selling corn in the local cash market. Hedging is a temporary substitute, since the corn will eventually be sold in the cash market.

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Iowa State University Extension

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Iowa State University

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