Do you think prices will rise or fall

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You own an orange grove in florida and beliee that weather will be great an there will be no hurricanes. OJ prices are currently$1.20 per pound. Do you think prices will rise or fall? Do you want to go long or short th OJ F=futures? Futures are 15,000 pounds per contract and the current futures price for september is 1.25 cent. You believe your grove will produce 30,000 pounds. Margin is 5%. How many contracts do you need? What is the cash required? What happens if you are right and OJ drops to 1.15 cents? What happens if there is a big storm in California and OJ prices rise to 1.40 cents? What happens if there is a hurricane in Florida that wipes out half your crop and prices rise to 1.40 cents.

Reference no: EM131861314

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