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.
Estimated RA Harvest Price for Corn1,
& Cotton for States with Sales Closing 3/15 and Cotton 2/28 or 3/15
Daily
Daily
Daily
Daily
Closing
Closing
Closing
Closing
Price
Price
Price
Price
CBOT
NYBOT
CBOT
NYBOT
Dec 05
Dec 05
Dec 05
Dec 05
Date
Corn
Cotton
Date
Corn
Cotton
11/01/05
1.9675
52.11
11/16/05
1.9275
49.79
11/02/05
1.9600
52.29
11/17/05
1.9225
49.64
11/03/05
1.9625
51.73
11/18/05
1.9200
49.31
11/04/05
1.9550
51.44
11/21/05
1.9150
48.54
11/07/05
1.9475
51.26
11/22/05
1.9150
49.90
11/08/05
1.9525
50.96
11/23/05
1.9075
48.95
11/09/05
1.9525
50.41
11/24/05
Holiday
Holiday
11/10/05
1.9375
50.20
11/25/05
1.8975
48.9500
11/11/05
1.9550
50.72
11/28/05
1.8775
48.8500
11/14/05
1.9675
50.89
11/29/05
1.8625
48.9800
11/15/05
1.9575
50.28
11/30/05
1.8750
49.1900
Avg Harvest
Corn
Cotton
Price
$1.930
50.21
Plant Price
$2.32
50.00
Price Change
($0.39)
0.21
% change
(-16.81%)
0
Increase in Trigger Yield2
120.2%
100.0%
1
RA uses the same Harvest Prices for Soybeans as CRC but November average
for Corn.
2
In years when prices fall, it requires a smaller yield loss to trigger
revenue insurance claims. For example the trigger yield for a corn
grower with a 132 bushel APH times 70% coverage is 92.4 bushels based on
the planting price of $2.32. Based on today's lower harvest price this
same corn grower will have a claim if yields are below 111.1 bushels or
120.2% of the minimum trigger yield of 92.4 bushels. Corn growers may
calculate their trigger yield by multiplying 120.2% times their APH
times the percent insurance coverage they selected. Any yield below
this level will trigger revenue insurance claims. This does not apply
to MPCI-APH.
An Example Kansas Corn Claim. A Kansas Corn grower with a 132 bushels
APH X 70% coverage X higher of harvest, plant price of $2.32 would have
had a revenue guarantee of $214.37. If this grower produced 33 bushels,
then based on today's price of $1.93 the revenue to count would be
$63.69 and the indemnity payment would be the difference between the
revenue to count and the revenue guarantee for gross indemnity payment
of $150.68 (before premium deduction).
