This paper analyzes the return and risks of hedging strategies of the major ten soybean producing regions in Brazil concerning Chicago Board of Trade (CBOT) future contracts. It was verified that the bases presented a well defined pattern characterized by strengthening from May to November and weakening in the remaining months. Long hedging had larger returns and larger risks comparing with short hedging. The conclusion of this study is that the CBOT soybean contracts present different returns depending on the type of hedging, on the period of hedging, and on the contract used. Therefore, the information presented in this paper is very important to support the decision making process in the Brazilian soybean agricultural system.
Price risk; Soybeans; Hedging; Futures contracts; Chicago Board of Trade
