Profit or loss

One orange juice futures contract is on 15,000 pounds of frozen concentrate. Suppose that in Sep 2009 a company sells a Mar 2011 orange juice futures contract for 120 cents per pound. In Dec 2009, the futures price is 140 cents; in Dec 2010 it is 110 cents and in Feb 2011, it is closed at 125 cents.

The company has a December year end. What is the company’s profit or loss on the contract? How is it realized?

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