Not sure if this is correct but this my understanding.
I have a beer fund to buy slabs each month.
This month it cost $25 to buy a slab (contract) but next month it's going to cost me $35 to buy a slab. So it's costing the beer fund $10 more to buy the next months slabs (the next contract) (contango effect) making a loss to the beer fund.
Cheers
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