“What is the chance of having a trend-line yield? What is the chance of it being above trend or below trend? What about the probabilities of how much or below?

“The economists can provide an estimate of what the November contract for soybeans or the December contract for corn, people can say, ‘With this national yield what could we expect the December contract to be at harvest?’”

On farmer queries…

“Most producers are as interested in their own place as they are in the market. They’re interested in the market for how much they’ll be able to sell their product for. But they’re interested in their own place to know what their product will be, what they’ll have to sell, maybe what they’ll have to commit to, right now.

“Most of them with old crop in storage have it committed, sold on some futures contract.

“The first (thing I say) is, ‘You may have some of your yield committed locally. You need to find out if the person you have the commitment with will take money at the CBOT price if you can’t deliver. Or do they insist you contracted for a bushel of corn and they want to be handed a bushel of corn, not a bushel of money.’

“These days, many times, cattle feeders won’t accept money. They want the corn or soybeans.

“This is a consideration that must be at the forefront. If you’re in a case where they’ll only take the product, you’ve got to hope you can deliver it. But don’t go speculating on that, at this time.

“You speculate with futures derivatives — calls, puts and the like — rather than with actual grain.

“If you do have the capability of delivering money rather than grain, then you can begin to commit your actual grain to the point you’re insured.

“Many have asked me, ‘Should I commit 25 to 30 percent of my guaranteed insured yield for this year? Corn is over $6.60.’

“In those cases, I think about one-fourth of it should be committed. If the price hits $7, go for half.”

For more on the 2012 drought, see here.