HEDGING WITH FUTURES AND OPTIONS UNDER A TRUNCATED CASH PRICE DISTRIBUTION

Many agricultural producers face cash price distributions that are effectively truncated at a lower limit through participation in farm programs designed to support farm prices and incomes. For example, the 1996 Federal Agricultural Improvement Act (FAIR) makes many producers eligible to obtain marketing loans which truncate their cash price realization at the loan rate, while allowing market prices to freely equilibrate supply and demand. This paper studies the effects of truncated cash price distributions on the optimal use of futures and options. The results show that truncation in the cash price distribution facing an individual producer provides incentives to trade options as well as futures. We derive optimal futures and options trading rules under options as well as futures. We derive optimal futures and options trading rules under a range of different truncation scenarios. Empirical results highlights the impacts of basis risk and yield risk on the optimal futures and options portfolio.farm programs, futures, hedging, options, truncation, Marketing,

The Effects of Government Maize Marketing Policies on Maize Market Prices in Kenya

The Government of Kenya pursues maize marketing policy objectives through the National Cereals and Produce Board (NCPB) which procures and sells maize at administratively determined prices, and stores maize as a contingency against future shortages. A private sector marketing channel competes with the NCPB and prices in this channel are set by supply and demand forces. This paper estimates the effects of NCPB activities on the historical path of private sector maize market prices in Kenya between 1989 and 2004. Results provide important insights into the historical effects of the NCPB, and will provide useful input into deliberations on the appropriate role for the NCPB in the future. It was not possible to use a fully structural econometric model to estimate the historical policy effects because of data limitations in Kenya, which are typical of many developing countries. Instead we use a reduced form vector autoregression model (VAR) and show how policy simulation results can be obtained from a fairly parsimonious VAR that can be estimated with sparse data and imposes only minimal identification restrictions. Results show that NCPB activities have stabilized maize market prices in Kenya, reduced price levels in the early 1990s, and raised price levels by roughly 20 percent between 1995 and 2004. Because roughly 60 percent of Kenya's rural households purchase maize while less than 30 percent sell maize, the government's maize marketing board operations have transferred income from urban consumers and most small rural households to maize selling farmers.Kenya, income transfers, maize policy, price stabilization, VAR, International Development, C22, O2, Q13, Q18,

The evolutionary development of high specific impulse electric thruster technology

Electric propulsion flight and technology demonstrations conducted primarily by Europe, Japan, China, the U.S., and the USSR are reviewed. Evolutionary mission applications for high specific impulse electric thruster systems are discussed, and the status of arcjet, ion, and magnetoplasmadynamic thrusters and associated power processor technologies are summarized

A pendant proton shuttle on [Fe4N(CO)12]- alters product selectivity in formate vs. H2 production via the hydride [H-Fe4N(CO)12].

Proton relays are known to increase reaction rates for H2 evolution and lower overpotentials in electrocatalytic reactions. In this report we describe two electrocatalysts, [Fe4N(CO)11(PPh3)]- (1-) which has no proton relay, and hydroxyl-containing [Fe4N(CO)11(Ph2P(CH2)2OH)]- (2-). Solid state structures indicate that these phosphine-substituted clusters are direct analogs of [Fe4N(CO)12]- where one CO ligand has been replaced by a phosphine. We show that the proton relay changes the selectivity of reactions: CO2 is reduced selectively to formate by 1- in the absence of a relay, and protons are reduced to H2 under a CO2 atmosphere by 2-. These results implicate a hydride intermediate in the mechanism of the reactions and demonstrate the importance of controlling proton delivery to control product selectivity. Thermochemical measurements performed using infrared spectroelectrochemistry provided pKa and hydricity values for [HFe4N(CO)11(PPh3)]-, which are 23.7, and 45.5 kcal mol-1, respectively. The pKa of the hydroxyl group in 2- was determined to fall between 29 and 41, and this suggests that the proximity of the proton relay to the active catalytic site plays a significant role in the product selectivity observed, since the acidity alone does not account for the observed results. More generally, this work emphasizes the importance of substrate delivery kinetics in determining the selectivity of CO2 reduction reactions that proceed through metal-hydride intermediates