Net Return to Storing Ohio Corn and Soybeans Since 1973

By: Carl Zulauf, Professor Emeritus, Ohio State University; and Eric Richer, Associate Professor and Field Specialist , Ohio State University Extension, October 2025

Net return to storing Ohio corn and soybeans since 1973 is examined.  Cash storage of Ohio corn and soybeans after June is generally not profitable as prices decline on average and in a majority of years.  Net returns to cash and futures hedged storage ending no later than June do not differ statistically from zero, indicating returns just cover total storage cost.  Nevertheless, this findings is consistent with building on-farm storage because on-farm storage offers other opportunities to improve farm profits.  They include faster harvest, thus less harvest loss, and more flexible post-harvest marketing, such as location of cash sales.  Although not statistically different, net returns have generally been higher for storing Ohio soybeans than corn.  This is consistent with soybeans’ more rapid growth in consumption.  Hedged storage has the advantage of lower net return risk, especially at longer storage periods.

Ohio Corn Price Seasonal

Although Ohio cash corn price has averaged nearly the same in October ($3.02) and November ($3.03) since 1973, October is used as the harvest low price month.  The decision in part reflects that October is the harvest low for soybeans (see next section).  Average Ohio cash corn price increased through June, peaking at 117% of its October price (see Figure 1).  Price increased the most (4 percentage points) from November to December.  It declined on average after June.  Largest decline was from August to September.  Ohio cash price was higher in roughly one-third of the years after June, specifically, 37%, 31%, and 30% of the years for July, August, and September, respectively.  For a brief discussion of data sources and procedures, see Data Note 1.

Ohio Soybean Price Seasonal

The Ohio soybean and corn cash price seasonal are largely similar (see Figures 2 and 1).  Average cash price is highest in June.  Largest average decline is from August to September.  Soybean cash price did increase more consistently from its October low, specifically one to two percentage points per month through May and had a lower and less definitive peak.  Average soybean price for June and July all rounded to 113% of the October low.  Corn’s peak was 117% in June.  Ohio soybean’s August and September cash price both exceeded its July price in 22% of the years.

Net Return to Storing Ohio Corn and Soybeans

Net return to the two most common storage strategies, cash storage and storage hedged with futures, is examined for storage periods from October (lowest cash price) to June (highest cash price). Net cash storage return per bushel equals (a) Ohio cash price for the end-of-storage month (for example, December) minus (b) October Ohio cash price minus (c) interest opportunity cost of storing instead of selling at harvest minus (d) physical storage cost at commercial facilities to keep the crop in useable condition.  Net futures hedged storage return per bushel equals (a) net return to cash storage plus (b) change in futures price over the storage period minus (c) cost of trading futures.  Since price and storage cost have increased over time, net return is expressed as a percent of the October price.  Data Note 2 further discusses the procedures and data sources.

Average net return to cash storage expressed relative to the October price does not differ statistically from $0 for both corn and soybeans for all 8 storage periods.  Thus, from a statistical perspective, returns just cover total storage cost.  However, average net return above total cash storage cost is close to or exceeds 3% of October price for Ohio corn stored to February and beyond and for Ohio soybeans stored to March and beyond (see Figure 3).  Such returns are high enough to perhaps have economic meaning even if they lack statistical significance.  Return to storage is nominally higher for soybeans than corn, with soybean’s advantage increasing for storage beyond March. 

Net return to futures hedged storage generally averages close to $0, especially as the storage period lengthens.  The advantage of hedged storage is that risk of net return variation is lower for it than cash storage.  This advantage becomes notable for storage beyond January (see Figure 4).  Combining Figures 4 and 3 suggest that the higher average net return for cash storage beyond January can be viewed as a compensation for the higher risk of cash storage beyond January.

Summary Discussion

Cash storage of Ohio corn and soybeans after June is generally not profitable as prices decline on average and in a majority of years.

Net return to cash and futures hedged storage Ohio corn and soybeans that ends no later than June does not differ statistically from zero.  Stated alternatively, on average, returns to storage just cover the total cost of storage.

The preceding finding is however consistent with building on-farm storage since on-farm storage provides other opportunities to improve farm profitability.  They include faster harvest due to longer harvest days plus less travel and wait time in getting a crop stored.  Faster harvest can reduce harvest loss due to inclement weather.  On-farm storage also gives more flexibility to post-harvest marketing, especially the location of cash sales.

Although not statistically significant, return to cash storage has been nominally higher for Ohio soybeans than corn.  This finding should not be surprising as consumption has increased percentage wise much more for soybeans than corn.  As price increases to stimulate future soybean production to satisfy growing demand, storage is more likely to be profitable.

A clear advantage of hedged storage is a lower risk of net return variation than cash storage, especially over longer storage periods.  This finding was expected since it is well documented in the literature.

Data Notes:

1. Cash price in this study is the average monthly price paid to Ohio farmers by first handlers as reported by USDA, NASS (US Department of Agriculture, National Agricultural Statistics Service).  Starting the study with the 1974 marketing year postdates the early 1970s increase in price variability (Kenyon, Jones, and McGuirk).  The last complete marketing year is 2024.
2. Physical storage cost is from USDA, Commodity Credit Corporation through the 2005 marketing year.  Thereafter, it is from an Ohio country elevator, cross checked with another Ohio first delivery point.  Opportunity storage cost is measured using the October secondary market 6 month US Treasury bill rate, discount basis.  Six months is the Treasury bill maturity closest to the 8 month October-June storage period examined in this study.  Source is the Federal Reserve Bank of St. Louis.  The Chicago July futures contract is used for the storage hedge.  It is the first corn and soybean futures contract maturity after June.  For each month, average July futures settlement price is calculated using prices from Barchart.com.  Hedge storage cost is brokerage fee plus liquidity cost for the futures trade.  Brokerage fee is assumed to be $50 for a round trip buy and sell of a futures contract based on inquiries of brokers.  Liquidity cost arises since the price at which a futures trade is executed usually differs from the price when the trade is placed (i.e. execution is not instantaneous).  Based on Brorsen and Thompson and Waller, liquidity cost is $25 per futures trade made before February 1 and $12.50 thereafter.  Liquidity cost is less after February 1 since trading volume increases as contract maturity nears.  For an in-depth discussion of storage and trading cost, see Zulauf and Kim (2020).

References and Data Sources

Barchart.com.  2025.  Futures price data.  https://www.barchart.com/

Brorsen, B. W.  1989.  Liquidity Costs and Scalping Returns in the Corn Futures Market.  Journal of Futures Markets 9(3): 225-236.

Federal Reserve Bank of St. Louis.  September 2025.  Federal Reserve Economic Data.   https://fred.stlouisfed.org

Kenyon, D., E. Jones, and A. McGuirk.  1993.  Forecasting Performance of Corn and Soybean Harvest Futures Contracts.  American Journal of Agricultural Economics 75(May): 399-407.

Ohio Country Elevator.  2006-2025.  Personal inquiry of annual corn and soybean storage rates.

Thompson, S. R. and M. L. Waller.  1987.  The Execution Cost of Trading in Commodity Futures Markets.  Food Research Institute Studies Vol. XX, No. 2: 141-163.

US Department of Agriculture, Commodity Credit Corporation.  1978-2007.  Annual personal inquiry.

US Department of Agriculture, National Agricultural Statistics Service.  September 2025.  QuickStats.  http://quickstats.nass.usda.gov/