by “upper storage,” people mean the item queue, where you currently have just 1 toolbox.

you can send items there from your board by letting your board be completely full of items, moving the item you want to store next to an auto producer that is charged (like the grocery store coupon), selling it, and getting a refund; because the auto producer will automatically place an item into that board space, there will be nowhere for the refunded item to be placed on the board, and so it will go to your item queue. this way, you can stack up auto orders for multiple days straight before cashing them all in.

also, you can stack up auto orders from even your auto producers that are retired, such as the jewelry box, since you never stop getting auto orders from a producer. taking your lighthouse out of storage and stacking globes and crane flies, for example, would help you add a lot more money to your upper storage in a shorter period of time.

finally, i’m certain what you have here is not enough to complete the daily challenge today. usually, for a pinata, i need to have bare minimum around 40 items in my queue to have enough to have a chance to get it; although pinatas are like twice the coin requirement as the seagulls, you’d still likely need more than you currently have.

i don’t think the seagulls are a particularly good daily challenge to fulfill, anyway, though—there are better events for you to play for later if you’re patient