U.S. corn crop insurance guarantee highest in 12 years

3/1/2023

By Julie Ingwersen

CHICAGO, March 1 (Reuters) - Crop insurance policies that guarantee prices for the 2023 growing season are the highest since 2011 for corn and the second-highest on record for soybeans after last year's peak, reflecting tight global grain supplies, analysts said.

The U.S. Department of Agriculture (USDA) set the guarantees, which act as a floor price below which farmers with insurance can receive payments, at $5.91 per bushel for corn and $13.76 a bushel for soybeans across most of the U.S. crop belt. The prices reflect the average settlement for Chicago Board of Trade December corn and November soybean futures during the month of February.

The insurance guarantee for spring wheat was $8.87, down from $9.19 a year ago, based on the average price of Minneapolis Grain Exchange September spring wheat futures during February.

The insurance price for corn is up a penny from $5.90 in 2022 and the highest since the 2011 price projection of $6.01. The soybean price is down from last year's record high of $14.33, but still relatively strong.

"These are very encouraging prices to try to bring out as much available acreage as possible," said Ted Seifried, chief market strategist for the Zaner Group.

Still, the crop insurance prices seemed unlikely to shift planting expectations much from forecasts released by the USDA last week for 91 million acres of corn in 2023, up from 88.6 million acres the previous year, and 87.5 million acres of soybeans, steady with 2022.

Compared to last year's insurance guarantees, the 2023 figures are "both profitable and close enough that economics will take a back seat to other considerations," such as planting weather, said Bill Lapp, president of Nebraska-based Advanced Economic Solutions. (Reporting by Julie Ingwersen; Editing by Stephen Coates)