For merchants who do commodity business, or those who want to buy commodities as raw materials, there is a certain period for ordering, so it is good to order at a lower price within this period. What if the price is higher but they have to order? At this time, shorting the commodity in the futures market plays a hedging role. If the commodity price falls after buying at a high price, shorting futures can make money, make up for the loss of buying at a high price, and thus realize hedging.
What are the disadvantages of this hedging? It's also obvious. Hedging can only make this process lose as little or no as possible. This process is difficult to make a profit, or it is profitable, and it may face unnecessary losses.