A $3.10 harvest price would be 80% of the $3.88 projected price for 2020. The harvest price is used to calculate crop insurance indemnity payments on corn in the Midwest states. In this case, the harvest price is the expected average of settlement prices in the month of October for the December corn contract traded on the CME. At that yield, the expected harvest price is estimated at $3.10 per bushel (see Table 1). The June WASDE report has a yield estimate of 178.5 bushels per acre. Table 1 shows harvest price projections for different U.S. As WASDE reports are released, estimates of harvest prices can be revised. corn yield is regularly forecast in the World Agricultural Supply and Demand Estimate (WASDE) report produced by the Office of Chief Economist, U.S.
Historical relationships indicate that higher corn yields will have a negative impact on prices. Corn yields are estimates at this point in time, and weather in July will have a large impact on actual yields. Although the projected price for crop insurance is set using the average of February settlement prices for the same contract, the use of the May futures contract allows incorporation of a decrease in prices that have occurred after COVID-19 measures have been introduced.
Using settlement prices in May provides unbiased estimates of harvest prices. The harvest price is based on the average of settlement prices for the same December contract throughout the month of October.