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Abstract

The purpose of the following basis tables is to provide information on the historical cash-futures price relationships for selected North Carolina cash markets and Chicago futures markets. The basis for a particular pair of cash-futures markets allows an agricultural producer to convert a futures price for a given contract month into an expectation of the net price from a hedged position which would be received in the month the commodity is sold. This information is important for a hedger. Basis allows a potential hedger to forecast an expected net selling price, and then lock in the price through a futures market hedge if the price is attractive. Basis is generally defined as the cash minus the futures price. Thus, a negative basis implies a cash price which is below a futures price, while a positive basis implies a cash price above a futures price. A hedged price expectation for a market can be derived by adding the basis to the futures price. Basis estimates for grains (corn, soybeans, and wheat) are computed using weekly cash and futures prices. The cash prices are taken from the Market Grain Report, published weekly by the Market News Section, Division of Marketing, North Carolina Department of Agricultute, Futures prices are taken from The Wall Street Journal. Two basis tables are provided for each cash market; one provides a three-year average basis (19.86-1988) and the other provides a five-year average basis (1984-1988). Basis averages for each calendar month are calculated for futures contracts expiring up to one year into the future.

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