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Abstract
Output price risk has been found to affect firm behavior in the soybean complex. Here, we investigate the influence of price risk on the supply of soybean products, using futures prices and implied volatilities from options markets to generate the first and second moments of the crushers' returns distribution. Our findings suggest that implied volatilities can be a useful measure of price risk in a supply response context. This measure has the advantages of being forward-looking, market generated, and relatively easily implementable for those commodities with futures and options markets.