Storage Returns of Indiana Corn and Soybeans

2019-05-15T13:44:10Z (GMT) by Aaron Jonathan Edwards
Most of Indiana corn and soybeans are placed into storage at harvest time to be delivered to market at a later date. Indiana farmers have many options regarding how and when to sell this grain. The present research addresses the issue of how to maximize the expected net returns to storage. The three central questions are: (i) which crop produces better returns? (ii) should the grain be stored unpriced or hedged using futures? and (iii) how long should grain be stored? Expected net returns for corn were maximized by storing unpriced until spring. However, unpriced corn storage provided positive returns less frequently than storage hedging. Unpriced soybean storage was better on average, and also produced positive returns more frequently than storage hedging. Returns were higher for soybeans than corn.