Selling futures contracts to protect against possible declining prices of commodities that will be sold in the future. At the time the cash commodities are sold, the open futures position is closed by purchasing an equal number and type of futures contracts as those that were initially sold.
Selling futures contracts against a long cash market position to protect against a decrease in the price of a commodity, security, currency or index.
Selling futures contracts to protect against possible decreased prices of commodities which will be sold in the future. See also Hedging.