Price trends indicate that Oklahoma and Texas wheat should be sold, each year, before August 31. This information is based on historical Oklahoma average monthly wheat prices and daily wheat prices for the period June 2008 through May 2019 and the assumption that wheat prices cannot be predicted (Table 1).
Three price data sets were used to conduct this research. Two data sets consisted of daily Weatherford, Oklahoma and Perryton, Texas prices. The third data set contained Oklahoma’s average monthly prices. The results were essentially the same for all three price data sets.
In Table 1, the month within each wheat crop marketing year (June through May) that had the highest net price is highlighted in yellow. For example, for marketing years 2008, 2009, 2013, 2014, and 2016, the month of June had the highest net price. Only in 2017 was July the highest average monthly price. August had the highest net price in 2011, 2015, and 2018. Note that in nine of the 11 years, June, July, or August had the highest net price. Only in 2010 should wheat have been sold after September 30.
Table 1. Oklahoma monthly average wheat prices minus commerical and interest costs (dollars/bu)*.
If wheat had been sold every year in June, the average price would have been $5.85. Selling in July would have netted $5.84, and August selling would have netted $5.89. The 11-year average prices for June, July, and August are essentially equal. There is a significant difference between June, July, and August prices and the average prices for the other nine months.
Of interest to note is that if prices could be predicted facilitating selling wheat during the high month each year, the net price received would be $6.48. The average price over all months is about $5.50.
Weatherford and Perryton daily prices were used to calculate the price range for each month. The price ranges for Weatherford and Perryton were not statistically different. The 11-year average price range for June was $1.09 (Perryton) and $1.07 (Weatherford).
ther monthly ranges were 87 cents, 77 cents, 64 cents, 59 cents, and 58 cents for July through November. Note that the price ranges declined as the marketing year progressed and stabilized at about $0.58 after September. The largest price movements, up and/or down, are expected in the June through August time period.
One can only speculate why the best time to sell wheat in Oklahoma and Texas has been before September 1. One reason may be that after Argentina and Australia finish their wheat harvest in late December, the next exportable hard wheat to be harvested is in Oklahoma and Texas.
Another reason may be that Black Sea wheat exports make up over 50 percent of all hard wheat exports. Black Sea exporting countries include Russia, Ukraine, Kazakhstan, and to a limited degree Belorussia. During the last 10 years, Kazakhstan’s percentage of the world’s hard wheat exports declined about one percent, while Russia and Ukraine’s percentage exports increased 17 percent.
The wheat harvests in the Black Sea exporting countries are mostly harvested mid-July through September. The majority of the Black Sea wheat exports are during the September through March/April time period. As the Black Sea wheat enters the export market, world wheat prices and U.S. wheat prices tend to decline.
It may not always be so. But, the best time to sell wheat in Oklahoma and Texas tends to be during the June through August time period.