Press
the Back
button to go back to the text.
| Table
1. Localizing Grain Prices for Central Ohio and
Central Iowa, An Example for 1997. |
| |
(Hedge)
|
Central
Ohio (Hedge, Buy call)
|
(Buy Put)
|
(Hedge)
|
Central
Iowa
(Hedge, Buy Call)
|
(Buy Put)
|
| Dec. Futures |
$2.70
|
$2.70
|
$2.70
|
$2.70
|
$2.70
|
$2.70
|
| Average Bases |
$0.22
|
$0.22
|
$0.22
|
$0.30
|
$0.30
|
$0.30
|
| Marketing Costs |
$0.02
|
$0.03
|
$0.02
|
$0.02
|
$0.03
|
$0.02
|
| Premiums |
----
|
$0.10
|
$0.09
|
-----
|
$0.10
|
$0.09
|
| Localized Price (LP) |
$2.46
|
$2.35
|
$2.37
|
$2.38
|
$2.27
|
$2.29
|
| Localized
Price with Basis, One Standard (std.) Deviation
Above and Below the Average |
| LP +1 std. deviation |
$2.51
|
$2.40
|
$2.42
|
$2.47
|
$2.36
|
$2.38
|
| LP -1 std. deviation |
$2.41
|
$2.30
|
$2.32
|
$2.29
|
$2.18
|
$2.20
|
|