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How Futures Markets are beneficial to Farmers
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Farmers spend money planting. This means spending money to buy seed, fertilizer and other supplies.
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Farmer negotiates a wheat futures contract with a delivery date corresponding to the wheat harvest
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A number of factors including weather, consumer supply and demand, and local, national or global events affect prices.
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Despite changes in price that may occur between the contract agreement and delivery, the farmer still gets to keep the original agreed upon price in the contract.
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