Grain storage is a business decision, not a roll of the dice. To approach it that way, you need to periodically reassess whether the market is offering you a return for the risk you are taking holding inventory, says Carl German, University of Delaware Extension grain marketing specialist. Even if you have a hedge or put option in place to protect against lower futures prices while you wait for basis to improve, it’s a good idea to stay in touch with what the market is telling you.
Click here for an Excel spreadsheet that allows you to fill in today’s prices and your own basis, interest rates and costs of storage for various time frames to see what offers the best return. Simply fill in the values in Column B for those factors listed in green type.
Monitor Storage Returns, November 2010.
21st Century Grain Marketing Primer
Marketing Grain Using a Storage Hedge (PDF)