Research implies that, on average, June, July, and August are the best times to sell wheat in Oklahoma and Texas. A problem is price variability. Between June 1 and Aug. 31, 2012, the average price was $7.74, and the range between the high price ($9.03) and the low price ($5.99) was $3.04. Selling wheat all at once could have left money in someone else’s pocket. 

The Energy Policy Act of 2005 and other market factors caused about a $2 upward shift in wheat prices during the 2006/07 and 2007/08 marketing years. Therefore, June 2009 through August 2021/22 wheat marketing prices were used to evaluate wheat price risk. 

Another assumption is that wheat prices can’t be predicted with sufficient accuracy to “beat the market.” If this is true, mechanical selling strategies may be the best method to use to sell wheat. 

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Oklahoma average monthly prices (USDA/NASS), adjusted for five cents per month storage costs, showed that if wheat had been sold every year for the average June price (2009-2021), the 13-year average price received would have been $5.48. Selling in July every year produced an average price of $5.46, and the average price for August was $5.51. The monthly average prices for the remainder of the year were between $5.10 and $5.32. 

This data shows that a mechanical strategy consisting of selling wheat during the June through August period (harvest period) produced a higher average price over the 13-year period than selling wheat during the other nine months. Each year selling one-third of the wheat during each harvest (June, July, and August), at the average monthly price, produced a 13-year average selling price of $5.48. 

So can the adage, “If you have one foot in a bucket of ice water and one foot in a bucket of hot coals, on the average you’re comfortable” be applied to wheat prices? 

A problem with this strategy is that it may be difficult to receive the average price. Figure 1 and Table 1 show the price variability around the average harvest prices.  

Daily Medford, Okla., prices for June 1 through Aug. 31 for the 13 years 2009 through 2021 were used to calculate the average harvest prices and the price ranges (Table 1 and Figure 1). 

Daily Medford wheat prices show that the 13-year average harvest price was $5.51. The average price range, during the three-month harvest periods, was $1.84. The highest price variability was $3.12 ($3.41 to $6.53) during the 2010 harvest. The lowest price variability was 78 cents ($6.66 to $7.44) during the 2013 harvest.  

A point of interest is that price variability does not depend on price level. In 2010, the average price was $4.79, and the spread was $3.12. In 2012, the average harvest price was $7.74, and the spread was $3.03. In 2013, the average harvest price was $7.68, and the spread was only 78 cents. 

The price variability, shown as a percentage (Table 1) shows the highest price variability occurred in 2010 at 33 percent. The lowest price variability was in 2013 with a percentage variation of six percent. 

Also, the last seven years, 2015 through 2021, show that the price range has been between 80 cents and $1.73 with an average of $1.35.  This is less dollar variability than during 2009 through 2015, but $1.35 per bushel can still make a significant difference in dollars received. 

This analysis shows that selling all the wheat at one time is risky. Perhaps the best strategy, to manage prices risk, is to sell in smaller lots over a specified period.