Implications for farmer pre-harvest corn marketing are also discussed. I do so by comparing observed prices during the pre-harvest marketing period to the price near contract expiration using data on new-crop December contract corn futures prices from 2000-2020. This article defines the weather risk premium and considers whether new-crop corn futures prices are consistent with such a premium.
Since this price premium is related to weather risk, I call it a weather risk premium. If the growing season progresses without a major weather event, new-crop prices are expected to fall. The basic idea for a weather premium is that concerns about production declines due to negative weather events create higher prices today higher than would be the case with “normal” weather and production. Market analysts often speak of a “weather premium” in the futures price for harvest-time delivery (i.e. Illinois Farmland Leasing & Rental FormsĪs spring planting nears completion in much of the corn belt, attention turns to the weather and its impact on crop yields and prices.Illinois Crop Budgets & Historic Returns.Farmland LEasing Facts Sheets & Pricing Information.Illinois Soil Productivity & Yield Utilities.Briomass Crop Budget Tool – Miscanthus & Switchgrass.Appraisal of Current Financial Position.Balance Sheet & Historical Financial Statements.Post Application Coverage Endorsement Tool (Sheet).precision conservation management (PCM).
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