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Disclaimer:
This web page is designed to aid farmers with their marketing and risk
management decisions. The risk of loss in trading futures, options,
forward contracts, and hedge-to-arrive can be substantial and no warranty
is given or implied by the author or any other party. Each farmer must
consider whether such marketing strategies are appropriate for his or her
situation. This web page does not represent the views of Kansas State
University.
Disclosure: Dr.
Barnaby’s research was the basis for the privately developed Crop
Revenue Coverage. |
| Estimating CRC & IP Wheat Harvest Price |
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| KCBOT
States: AZ, CO, KS, NM, OK, & TX |
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|
| CBOT
States: AL, GA, KY, LA, MS, MO, NC, SC, TN, & VA |
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| IP
uses CBOT Prices Only |
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Daily |
Daily |
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Daily |
Daily |
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|
Closing |
Closing |
|
Closing |
Closing |
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|
Price |
Price |
|
Price |
Price |
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|
KCBOT |
CBOT |
|
KCBOT |
CBOT |
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|
Jul 03 |
Jul 03 |
|
Jul 03 |
Jul 03 |
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| Date |
Wheat |
Wheat |
Date |
Wheat |
Wheat |
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|
| 06/02/03 |
3.2200 |
3.1875 |
06/17/03 |
3.1125 |
3.1675 |
|
| 06/03/03 |
3.2250 |
3.1950 |
06/18/02 |
3.1200 |
3.1650 |
|
| 06/04/03 |
3.1700 |
3.1350 |
06/19/02 |
3.1150 |
3.1575 |
|
| 06/05/03 |
3.1850 |
3.2050 |
06/20/02 |
3.0700 |
3.1175 |
|
| 06/06/03 |
3.2025 |
3.2050 |
06/23/02 |
3.0425 |
3.0700 |
|
| 06/09/03 |
3.2525 |
3.2725 |
06/24/02 |
3.0050 |
3.0225 |
|
| 06/10/03 |
3.3000 |
3.3375 |
06/25/02 |
3.0225 |
3.0100 |
|
| 06/11/03 |
3.2575 |
3.3050 |
06/26/02 |
3.0225 |
2.9850 |
|
| 06/12/03 |
3.3150 |
3.3700 |
06/27/02 |
3.0025 |
2.9525 |
|
| 06/13/03 |
3.1650 |
3.1775 |
06/30/03 |
3.0025 |
3.0175 |
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| 06/16/03 |
3.1200 |
3.1600 |
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IP |
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| Avg Harvest |
KCBOT |
CBOT |
CBOT |
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|
| Price |
$3.14 |
$3.15 |
$3.15 |
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|
| Plant Price |
3.73 |
3.53 |
3.53 |
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|
| Price Change |
0.59 |
0.38 |
0.38 |
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|
|
| % change |
-15.8% |
-10.8% |
-10.8% |
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|
| An
Example for a Kansas Wheat Grower and other KCBOT States. |
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| The
Harvest price will be multiplied times the grower’s wheat yield in
2002. |
| A
grower with a 40 bu. APH X 70% coverage X $3.73 base price would |
| have
had revenue guarantee of $104.44.
If this grower produced 9 bushels |
| then
based on today’s price |
$3.14 |
estimate
of the revenue |
| to
count would be |
$28.26 |
and
the indemnity payment would be the |
| difference
between the revenue to count and the revenue guarantee for gross |
| indemnity
payment of |
$76.18 |
(before
premium deduction). |
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