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.