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.
Table 1. Estimated Weighted National Average Price and Projected %
ACRE Price loss (05/22/09)
Grain
Soy-
Crop
Wheat1
Corn1
Sorghum1
beans1
Month
Month
Jun
7.62
Sep
5.02
4.60
10.70
Jul
7.16
Oct
4.37
3.96
9.94
Aug
7.64
Nov
4.26
3.68
9.38
Sep
7.43
Dec
4.05
2.87
8.97
Oct
6.67
Jan
4.36
3.27
9.97
Nov
6.28
Feb
3.87
2.83
9.55
Dec
5.91
Mar
3.86
3.10
9.12
Jan
5.90
Apr
3.87
2.99
9.89
Feb
5.79
May
Mar
5.70
Jun
Apr
5.69
Jul
May
Aug
1
USDA Est. 2008/09 NASS Price
6.85
4.20
3.30
9.85
2
% of 08-09 NASS Price Settled3
97%
76%
79%
82%
4
07-08 NASS Published Price1
6.48
4.20
4.08
10.10
3
KSU Est. 2008/09 NASS Price2
$6.77
$4.15
$3.37
$9.80
ACRE
5
2009 ACRE Strike Price, Average of 2007/08 & 2008/09 MYA Price
6.62
4.17
3.72
9.95
6
Assume an "Average" State Yield, 2009 ACRE Payment Price X 90%4
5.96
3.76
3.35
8.95
7
Assuming an "Average" Yield, Maximum ACRE Price to Exceed the 25%
Cap on Payments5
4.47
2.82
2.51
6.72
8
USDA Est. 2009/10 NASS Price
4.70-5.70
3.70-4.50
3.15-3.85
8.45-10.45
9
KSU Forecast of the 2009/10 New Crop MYA Price6
6.16
4.39
4.15
8.71
10
$ ACRE in (out) of the Money
-$0.19
-$0.63
-$0.80
$0.24
11
% ACRE in (out) of the Money
(2.9%)
(15.2%)
(21.5%)
2.4%
1NASS
Published Prices.
2The NASS
2008-09 marketing year is a weighted Marketing Year Average (MYA)
price. The 2008-09 MYA price is averaged with the 2007-08 MYA price
to set the strike price for the 2009 ACRE program. Also the 2008-09
MYA price is used to settle claims on the 2008 SURE programs.
3The
estimated 2008-09 MYA price is about 95% complete for wheat because
the wheat marketing year starts June 1 through May 31 while the
marketing year for the other crops is September 1 though August 31
therefore the 2008-09 MYA price for corn, grain sorghum and soybeans
is about 80% complete.
4The 2009/10 MYA price would need to
fall below the strike price to trigger assuming the state yield is
equal to the state Olympic 5 year average yield.
5The maximum 2009/10 MYA price
necessary to hit the 25% of coverage payment limit. Once the ACRE
25% of coverage payment limit is hit, then prices will need to fall
below 70% times the loan rate ($1.365 for corn) to trigger
additional payments because there is no counter cyclical payment.
The maximum price will be lower for farmers over the $73,000 payment
limit.
6It is
assumed the market traded nearby futures prices adjusted for
percentage basis for MYA cash price over the past 24 months, is the
best current estimate of the MYA price to settle ACRE claims.
