Post-harvest grain storing and hedging with efficient futures

This study simulates whether Kansas wheat, soybean, corn, and mile producer s could have profitably used deferred futures plus historical basis cash pr ice expectations for post-harvest unhedged and hedged grain storage decisio ns from 1985-97. The signaled storage decision is compared to a representat ive Kansas producer whose crop sales mimic average Kansas marketings each y ear. Using 23 grain price locations, the simulations resulted in an 11 cent per bushel annual increase in grain storage profits for wheat, 27 cent for soybeans, -17 cent for corn, and -20 cent for mile; however, storage profi t differences varied substantially across locations. Hedging tended to decr ease risk, but not impact profitability.