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| Alright you seem to be certain of what you know. So the theory goes they have to bring price up or make a big out, and only way I know to bring price up is added buying pressure. So I guess the questions become
If price stays where it’s at today how much will they stand to pay out (or lose)?
Supposing they don’t wanna lose money by giving it to the farmer, how much would it cost for them to bring price up to 5.95?
Is there some sweet spot before we hit 5.95 where they pay out somewhat but also try to bring price up? Like if they were to bring it up 5.45
At what point does price drop enough that it wouldn’t benefit them to try and bring price up, But rather send it on down?
Seems like insurance companies are forced to essentially sell the farmers puts. But they’d have to know going into this year that 5.95 is historically way high and that we were in an El Niño year where corn yields are sub trend yield in Midwest and that the possibility of major payouts should be anticipated.
Maybe it goes to 5.95 and this will be a lesson learned for me— not to over think something
But this theory is kind of an isolated system because there’s a lot of other moving players in the arena.
Do the market makers have a vested interest in seeing where price goes? Does China or other countries have or try to directly influence it? What about hedge funds, are they more along for the ride or also trying to steer it in a direction? I guess If they bring it to 5.96 insurance company trumps all then huh?
It just seems like a really complex situation that involves more maths than “fall price needs to be greater than spring price”
Edited by Deltamudd 10/15/2023 10:07
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Insurance price
