Just using cash marketing strategies, the perfect plan would have been to sell all wheat on July 20 ($9).

The next best scenario would have been to sell all the wheat anytime from Oct. 1 through Dec.10. Selling wheat in one-third lots would have been the next best strategy ($7.56), followed by either selling wheat at harvest ($6.53) or forward contracting and selling at harvest ($6.47).

Some producers like to hedge by selling wheat on the Kansas City Board of Trade, buying put option contracts in April, or selling wheat at harvest and buying call option contracts.

Buying put option contacts in April to cover one-half expected production and selling all wheat at harvest produced a net price of $6.53, which is the same price as selling all the wheat at harvest.

Selling all the wheat at harvest and buying December call option contracts produces a net price of $7.66, which is about the same net price as the one-third strategy ($7.66).

What this analysis shows is that if someone could predict prices, they would sell all their wheat on a single day ($9).

No one can predict prices. Now the question is, “Should all of the wheat have been stored to sell in the October through early-December time period?”

On June 20, the price was $6.53. The five-year average price was $6.45. Both U.S. and world wheat stocks were near the five-year averages. The U.S. winter wheat crop was predicted to be about 7 percent of the world’s wheat production. On June 21, 2010 (24 months prior), wheat prices were $3.70.

Given this information, a prudent producer would think the odds of higher prices were about 50/50. Remember, it was a drought in the Corn Belt that resulted in higher wheat prices.

So what was the best strategy? Sell all wheat on July 20 for $9 per bushel.

A risk adverse producer could have used the one-third strategy and received about $7.56 per bushel.

A producer who didn’t need cash to pay bills and could take some risk could have stored all his wheat into the fall and received about $8 per bushel.

What was the perfect strategy? There isn’t one.