Futures & hedging

• What it is

  A CBOT/MATIF futures locks a future price: selling futures insures against a physical-batch price drop.

• Basis risk

  Futures ≠ your port price: the hedge fixes the exchange part, basis (port − exchange) remains risk.

• Margin

  Initial and variation margin: adverse moves mean daily top-ups at the broker.

• Practice

  Sell futures for the harvest volume → sell physicals → buy back futures: the price drop is offset by hedge profit.

A hedge is price insurance, not profit: 'won' the hedge = lost on physicals, and vice versa. For a Ukrainian trader it often isn't worth the FX and basis risk without experience.