| Press the Back
button to go back to the text. Table 3. Average Return to Various
Marketing Strategies, 21 Illinois Farms, Corn and
Soybeans, 1985 -1995.
| Strategy |
Corn
|
Soybeans
|
| Mean |
t-statistic a |
Mean |
t-statistic a |
| |
------------ Gross
Production Returns b ($/acre)
------------
|
| Sell
at Harvest |
303
|
NA
|
251
|
NA
|
| Sell
Futures on May 1 c |
319
|
0.82
|
266
|
1.56
|
| Buy
Sept. Put on May 1 d |
319
|
2.04
|
260
|
1.30
|
| Buy
Harvest Put on May 1 c |
310
|
0.93
|
259
|
0.97
|
| |
Gross Trading
Returns to Futures or Option Position
(cents/bushel)
|
| Sell
Futures on May 1 c |
11.0
|
0.90
|
33.8
|
1.66
|
| Buy
Sept. Put on May 1 d |
10.6
|
2.07
|
15.4
|
1.35
|
| Buy
Harvest Put on May 1 c |
4.9
|
0.85
|
14.6
|
1.02
|
a The t-statistic
for gross production returns per acre is for the null
hypothesis: gross returns with pre-harvest strategy -
gross returns from selling at harvest = 0. The
t-statistic for gross trading returns is for the null
hypothesis: gross trading return = 0.
b Gross return
for selling at harvest equals cash price during the
week in which 50 percent of the Illinois crop is
harvested times the farm’s yield. Gross return
for the other marketing strategies includes the
return from selling futures or buying the put. It is
assumed that 100 percent of expected production
(five-year moving average of yield minus high and low
yield) is sold before harvest.
c Futures and
harvest put positions are closed out on the same date
the cash sale is made, i.e. the week in which 50
percent of the Illinois crop is harvested.
d September put
option position is closed on the 15th day
of August or the last day of trading, whichever came
first.
SOURCE: original
calculations
|