Yield crop simulation for options pricing

Mathematical models of yield and options pricing for crop yield have been developed. For this purpose, a one-factor Vasicek equilibrium model was used, describing the evolution of the instant interest rate and the price of a discount zero coupon bond. Based on the options pricing model for discount zero coupon bonds, a model of options pricing on crop yields is obtained. The price of a European call option is based on current weather conditions in the region and takes into account the operations (and their timeliness) that the farmer has performed to increase crop yields.