WHAT MAKES THE PEICE OF OATS 3 
Obtaining a method for estimating the annual price, however, is but 
one important step in the price analysis. The problem remains of 
explaining the variations in price during the year, in order that by 
using the annual price as a basis one may calculate the probable 
seasonal movement. It is this seasonal movement of prices, rather 
than the average annual price, which is of great importance to the 
farmer who has oats to sell. The statistical methods used in this 
part of the study differ from those used in the earlier part, and on 
the whole the analysis offers greater difficulty. 
The most difficult part of the crop year for those attempting to 
forecast prices is during the growing season. Once the supply is 
fairly well known the principal factor to be considered by the fore- 
caster is changes in demand; but during the growing season not only 
demand, but supply as well, must be estimated. The problem is to 
discover some indicator of the volume of production which antici- 
pates the harvest. Two of these, the price of September futures and 
the monthly condition of the crop as reported by the United States 
Department of Agriculture, are available. These must be compared 
by the use of statistical methods as to their relative accuracy in pre- 
dicting the future prices, and the variations in accuracy as the 
growing season progresses must be measured. 
Finally, to make this study of greater value to those who may 
continue the work of analyzing grain prices, it has been thought 
advisable to apply to wheat some of the methods used in the analysis 
of oat prices, to emphasize the difference in the method of treatment 
necessary for this crop. The market for oats is a domestic market, 
and the price is determined very largely by the domestic supply. 
The demand for wheat, on the other hand, is a world demand, the 
supply a world supply. The price is determined in the world mar- 
ket and is affected comparatively little by the size of the crop of the 
United States, as is shown in this study. The application of the 
theory of an average annual price resulting from an annual supply 
is more difficult. 
SOURCES OF DATA AND SCOPE OF ANALYSIS 
The data on oat prices used in this study were obtained from the 
annual reports of the Chicago Board of Trade. The weekly high and 
low prices for No. 2 oats at Chicago were averaged to give monthly 
prices, and the monthly prices thus obtained were averaged for the 
crop years July to June, to obtain the yearly figures. In the study 
of the relation between cash and future prices a more accurate series 
was needed. For this purpose monthly cash and future prices were 
obtained by averaging the daily high and low prices. 
Data on production were obtained, for the most part, from the 
Yearbooks of the United States Department of Agriculture. No 
figures were available regarding the world carry-over of wheat, so 
these were calculated for the period 1891 to 1923 from data obtained 
from various sources, as explained in the Appendix. 
The wheat prices were obtained from the annual reports of the 
Chicago Board of Trade. The monthly figures are averages of daily 
high and low prices. Owing to the changes in grades from time to 
time, there was some difficulty in getting comparable grades for the 
entire period. Those used were: July, 1890, to January, 1897, No. 2 
