For corn and soybeans, the current price structure appears to offer a very small return to forward pricing a stored crop.

"Consider the following examples for east central Illinois. A typical cash bid for harvest delivery of corn is currently about 12 cents under December 2011 futures, or 35 cents under July 2012 futures. The bid for March 2012 delivery is about 24 cents under July futures. The 11-cent premium for March delivery will not nearly cover the cost of owning and storing corn until March," Good said.

If a stronger basis were anticipated by March, a storage hedge might be considered, he added.

"If, for example, the cash price in March was expected to be 10 cents under July futures, then a 25-cent per bushel return to storage could be captured by selling July futures. The interest cost of holding corn from harvest to March would likely exceed 12 cents per bushel, leaving only 13 cents to cover storage costs. A larger return would occur if the basis were stronger than expected and vice versa," he added.

For soybeans, a typical harvest delivery bid in east central Illinois is currently about 28 cents under November 2011 futures, or about 45 cents under July 2012 futures. The bid for March 2012 delivery is about 30 cents under July futures.

"Again, the 15-cent premium for March delivery would not pay the cost of owning and storing the crop until March. If a stronger basis, say 10 cents under July futures, were expected by March, a storage return of 35 cents would be expected from selling July futures," he said.

The interest cost of owning soybeans until March 2012 would be about 23 cents per bushel, leaving only 12 cents to cover storage costs. A larger or smaller return could occur, depending on the magnitude of the basis in March.

Storing corn and soybeans unpriced implies the expectation of prices increasing by more than the cost of owning and storing these crops. Higher prices may only be forthcoming if the concerns about the U.S. and European economies can be overcome. In the short run, that might require much smaller production forecasts by the USDA on Sept. 12 and/or Oct. 12.

"However, the market is already anticipating some reduction from the August forecasts so actual reductions would have to be surprisingly large," Good said.

In the longer term, higher prices might occur if demand is stronger than currently forecast, requiring further rationing of consumption, he added.

"Surprising demand strength might have to come in the export markets if the domestic economy remains weak. Southern hemisphere crop problems or larger-than-expected corn exports to China might be required to provide the demand boost. Time will be required for those developments to unfold.

Corn and soybean prices are at high levels and are facing some strong headwinds. High prices and generally strong basis levels reduce the potential returns to storage.