In this paper we provide a model of futures market equilibrium in which both financial intermediaries and their customers are able to hedge both quantity and price risk. The interplay between alternative loan commitment arrangements and hedging decisions is examined in some detail. As an example we show conditions under which futures contracts can be used, in conjunction with a particular loan pricing scheme, to replicate another pricing mechanism. By considering both input and output price uncertainty we argue that, due to the ‘built-in’ hedge on their balance sheets, the equilibrium hedge ratios for both firms and intermediaries is less than one (that is, a partial hedge). This generalization also allows us to provide counterexamples to some commonly held beliefs concerning futures trading (for example, that hedgers would always want to avoid basis risk).