Economic Research Institute Study paper
Utah State University
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The main purpose of futures markets is to facilitate the trading of contracts which allow producers, processors and merchandisers of commodities to minimize their exposure to the risk of adverse price flucuation. This is achieved by either buying or selling contracts for delivery of a specified amount of a given commodity at a future date. These particul ar players in the futures markets are referred to as "hedgers" since they are offsetting a cash position by either buying or selling futures contracts.
Israelsen, Craig L. and Snyder, Donald L., "The Imortance of Basis In Grain Marketing Decisions" (1986). Economic Research Institute Study Papers. Paper 436.