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   Home / Crops / Insurance / Risk Management

 

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 Weighted National Average Price and Projected    
Percent ACRE Price for 2010/11 Date: 8/2/2010        
1 Year         10 09 10 09 10 09 10
            Wheat Corn Sorghum Soybeans
2 07-08 NASS Published Price1   4.20   4.08   10.10  
3 08-09 NASS Published Price1 6.78 4.06 4.06 3.20 3.20 9.97 9.97
4 09-10 NASS Published Price1 4.87   3.55   3.20   9.56
5 % of 09-10 NASS Price Settled2 100%   94%   94%   96%
ACRE                      
6 2010 ACRE Strike Price, Average of 2008/09 & 2009/10 MYA Price 5.83 4.13 3.80 3.64 3.20 10.04 9.77
               
7 Assume an "Average" State Yield, 2010 ACRE Payment Price X 90%3 5.24 3.72 3.42 3.28 2.88 9.03 8.79
             
8 Assuming an "Average" Yield, Maximum ACRE Price to Exceed the 25% Cap on Payments4 3.93 2.79 2.57 2.46 2.16 6.77 6.59
             
             
8 USDA Estimate of the 2010/11 MYA NASS price and range of price (July 9, 2010)5 4.60 3.55 3.75 3.15 3.45 9.55 8.85
4.20 3.50 3.45 3.10 3.15 9.55 8.10
5.00 3.60 4.05 3.20 3.75 9.55 9.60
9 KSU Forecast of the 2009/10 New Crop MYA Price and range of price6   5.00 3.55 3.67 3.20 3.49 9.56 9.22
    4.01 3.50 2.86 3.15 2.72 9.47 7.19
  6.07 3.59 4.48 3.24 4.26 9.66 11.24
10 % of 10-11 NASS Price Settled2 30% 94% 0% 94% 0% 96% 0%
11 $ ACRE in (out) of the Money 0.24 0.17 (0.25) 0.08 (0.61) (0.53) (0.43)
12 % ACRE in (out) of the Money 4.2% 4.1% (6.6%) 2.1% (19.1%) (5.3%) (4.4%)
Next Year's Cup & Cap                
13 Min 09/10 Price to trigger 10% Cup 5.62 7.43 3.30 6.55 2.56 18.06 8.02
14 Max 09/10 Price to trigger 10% Cap 6.66 8.18 3.98 7.21 3.14 19.87 9.77
                       
NASS Monthly Wheat Prices and Historical Weights7      
Month 2005-2006    2006-2007    2007-2008    2008-2009    2009-2010  2010-2011
Price Weight Price Weight Price Weight Price Weight Price Weight Price Weight
Jun 3.55 8.5% 3.23 10.9% 3.98 11.9% 5.03 16.0% 5.72 10.8% 4.17  
Jul 3.37 23.4% 3.20 12.4% 3.88 16.8% 5.17 18.5% 5.17 18.3% 4.74  
Aug 3.27 12.6% 3.24 9.0% 3.91 13.4% 5.64 12.6% 4.85 10.8%    
Sep 3.36 7.9% 3.36 11.0% 4.06 11.7% 6.76 6.9% 4.48 9.5%    
Oct 3.43 6.6% 3.43 7.0% 4.59 6.3% 7.65 9.1% 4.47 9.7%    
Nov 3.46 7.2% 3.45 7.8% 4.59 4.7% 7.39 4.8% 4.79 6.8%    
Dec 3.40 7.5% 3.53 8.6% 4.52 8.1% 7.71 6.8% 4.87 6.3%    
Jan 3.43 7.9% 3.52 9.7% 4.53 8.4% 7.96 8.2% 4.90 7.7%    
Feb 3.36 5.4% 3.66 9.5% 4.71 6.2% 10.10 5.1% 4.73 5.1%    
Mar 3.42 6.6% 3.79 7.1% 4.75 5.1% 10.50 4.9% 4.70 5.2%    
Apr 3.35 3.2% 3.81 3.4% 4.89 3.4% 10.10 4.2% 4.41 6.1%    
May 3.31 3.2% 4.09 3.6% 4.88 4.0% 8.87 2.9% 4.33 3.7%    
                       
NASS Monthly Corn Prices and Historical Weights7      
Month 2004-2005    2005-2006    2006-2007    2007-2008    2008-2009    2009-2010 
Price Weight Price Weight Price Weight Price Weight Price Weight Price Weight
Sep 2.20 7.8% 1.90 7.4% 2.20 6.9% 3.28 7.9% 5.01 4.5% 3.25  
Oct 2.14 11.7% 1.82 11.3% 2.55 14.7% 3.29 13.7% 4.37 9.4% 3.61  
Nov 2.05 11.7% 1.77 8.9% 2.88 14.6% 3.44 11.1% 4.26 11.9% 3.65  
Dec 2.04 8.6% 1.92 7.9% 3.01 8.0% 3.77 8.7% 4.11 8.9% 3.59  
Jan 2.12 12.4% 2.00 15.4% 3.05 15.3% 3.98 16.5% 4.36 12.8% 3.66  
Feb 1.95 8.4% 2.02 8.2% 3.44 5.9% 4.54 7.3% 3.87 6.4% 3.55  
Mar 2.02 8.2% 2.06 6.8% 3.43 6.6% 4.70 7.5% 3.85 9.6% 3.55  
Apr 2.00 5.2% 2.11 6.4% 3.39 4.4% 5.14 6.2% 3.85 6.7% 3.41  
May 1.98 5.9% 2.17 6.4% 3.49 4.7% 5.27 4.6% 3.96 9.1% 3.48  
Jun 2.03 7.2% 2.14 6.9% 3.53 6.6% 5.47 6.1% 4.01 7.4% 3.41  
Jul 2.11 7.0% 2.14 7.5% 3.32 6.2% 5.25 6.4% 3.60 6.9% 3.55  
Aug 1.95 5.9% 2.09 6.9% 3.26 6.1% 5.26 4.0% 3.33 6.4%    
                       
NASS Monthly Grain Sorghum Prices and Historical Weights ($/bu)7  
Month 2004-2005    2005-2006    2006-2007    2007-2008    2008-2009    2009-2010 
Price Weight Price Weight Price Weight Price Weight Price Weight Price Weight
Sep 2.00 5.0% 1.91 7.1% 2.40 4.1% 3.46 8.1% 4.47 3.9% 3.15  
Oct 1.78 7.4% 1.67 9.4% 2.89 12.2% 3.46 13.7% 3.86 3.1% 3.11  
Nov 1.71 15.2% 1.58 19.1% 3.26 23.3% 3.51 19.8% 3.63 11.4% 3.18  
Dec 1.67 17.3% 1.63 15.9% 3.41 9.6% 3.88 15.4% 2.87 17.2% 3.20  
Jan 1.65 13.8% 1.77 13.8% 3.53 12.2% 4.14 14.9% 3.18 15.1% 3.27  
Feb 1.66 10.2% 1.90 7.0% 3.89 7.7% 4.68 6.3% 2.82 7.3% 3.05  
Mar 1.70 5.7% 1.98 5.1% 3.63 1.5% 5.06 4.6% 3.00 13.0% 3.18  
Apr 1.66 3.8% 2.07 5.2% 3.34 1.0% 5.21 4.0% 3.12 6.0% 3.02  
May 1.71 3.1% 2.25 4.3% 3.63 1.6% 5.22 2.1% 3.35 9.1% 3.19  
Jun 2.11 6.4% 2.21 1.7% 3.42 5.1% 5.66 3.1% 3.52 3.4% 3.01  
Jul 2.21 6.8% 2.58 6.7% 3.09 7.8% 5.07 4.5% 2.91 5.4% 3.30  
Aug 2.07 5.3% 2.44 4.7% 3.32 13.9% 4.70 3.5% 3.01 5.1%    
                       
NASS Monthly Soybean Prices and Historical Weights7      
Month 2004-2005    2005-2006    2006-2007    2007-2008    2008-2009    2009-2010 
Price Weight Price Weight Price Weight Price Weight Price Weight Price Weight
Sep 5.83 7.7% 5.77 7.4% 5.23 5.6% 8.15 10.4% 10.80 5.1% 9.75  
Oct 5.56 15.0% 5.67 19.9% 5.52 19.9% 8.36 21.1% 9.95 21.0% 9.44  
Nov 5.36 10.4% 5.62 6.2% 6.08 10.2% 9.42 10.7% 9.39 6.9% 9.53  
Dec 5.45 9.4% 5.78 9.2% 6.18 8.8% 10.00 8.2% 9.24 7.1% 9.80  
Jan 5.57 12.2% 5.87 14.1% 6.37 15.1% 9.95 17.3% 9.97 15.4% 9.79  
Feb 5.42 12.4% 5.67 5.7% 6.87 6.8% 11.70 7.3% 9.54 6.7% 9.41  
Mar 5.95 11.0% 5.57 5.9% 6.95 6.2% 11.40 6.3% 9.12 8.9% 9.39  
Apr 6.03 4.8% 5.52 5.5% 6.88 5.1% 12.00 4.8% 9.79 10.2% 9.47  
May 6.21 4.2% 5.68 6.6% 7.12 5.3% 12.10 3.2% 10.70 6.3% 9.41  
Jun 6.58 5.4% 5.62 5.4% 7.51 6.2% 13.10 4.4% 11.40 4.8% 9.45  
Jul 6.65 3.4% 5.61 6.4% 7.56 5.5% 13.30 4.4% 10.80 4.6% 9.79  
Aug 6.15 4.1% 5.23 7.7% 7.72 5.3% 12.80 1.9% 10.80 3.0%    
1NASS Published Prices.  The 2009/10 Marketing Year Average (MYA) price is complete for Wheat.  For all other crops and years, the 2009/10  and 2010/11 MYA  prices are estimates.  The 2009/10 MYA price is averaged with the 2008/09 MYA price to set the strike price for the 2010/11 ACRE program.  Also the 2009/10 MYA price is used to settle claims on the 2009/10 SURE programs. 
2The 2009/10 MYA price is or is nearly complete.  The wheat marketing year starts June 1 through May 31 while the marketing year for the other crops is September 1 through August 31.
3The 2010/11 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.
4The maximum 2010/11 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.
5USDA forecasted price released on July 9, 2010.
6It is assumed the market traded nearby futures prices adjusted for percentage monthly basis for MYA cash price, is the best current estimate of the MYA price to settle ACRE claims.  Therefore, the analysis is based on the KSU estimated price rather than the USDA estimated price published by the Office of the Chief Economist.
7Historical NASS yields and prices are published annually.  The current Marketing Year Average prices are updated monthly.  After the marketing year ends, NASS will publish the weights.  The wheat weights will be published in July and the fall crop weights will be published in September.
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