When seeking to hedge a cash commodity without a corresponding futures contract, one can turn to a related futures contract that follows similar price trends. This strategy, known as cross-hedging, involves using a different but related futures contract, such as soybean meal futures to hedge fish meal. By doing so, one can mitigate the risk associated with price fluctuations in the cash commodity market. This is a common practice in the world of finance, and an important concept to understand when managing investments.
