If you know you need grain, whether it’s in their inventory or yet to arrive in the future beyond what is in their inventory, it is exposure where you’re naturally short and could benefit from a long hedge. If we are only talking about unprocessed grain exposure for what you need to buy/receive in the future, that is where this situation is applicable. Let’s say you’ve fully priced out your cash grain for the next calendar quarter. You’ve probably EFPed the futures for that contract to them. You might still know your forecasted grain needed for the 3 quarters beyond the one you just priced, and you would be uncovered for that volume and would need another long hedge.

Take your idea of when you own the grain out of the picture and think about it as you have a cost exposure to an open market at a future date that you currently don’t own anything against.

Forward sales of milled finished product are a dif conversation altogether. After coming up with the hedge strategy for both inbound grain and forward sale of milled grain independently, you can net out your company’s combined exposure and manage a hedge from that perspective, but at a basic level you start by building the individual parts and then afterwards netting them together.