Commodity Futures Prices at Expiration equals cash ?

Discussion in 'Commodity Futures' started by trillenium, May 15, 2013.

  1. I know from Financial Futures that the futures price will equal cash at expiration. How is that in commodity futures ? Lets say the day of futures expiration the cash corn trades at 500 ... how much higher or lower is the futures price ? Does it equal the cash price or is it higher/lower and roughly by how much ?
  2. If the contract is not cash settled better have warehouse space ready.

    Just kidding, your broker knows you are not a hedger and should give you plenty of warning to close your position.
  3. 1) ?.....The futures price ought to be no lower than the cost of carry/delivery to the least advantageous delivery location of the least qualifying quality of commodity to satisfy delivery. :cool:
    2) In other words, Cargill, as the "short", will deliver the worst quality of corn, to you the "long", to the most detrimental location. :eek: :( :mad: :p :D :)