My spade connector that hooks to the sending unit sometimes loses contact. I clean the male spade on the SU and the female on the wire end too. That normally gets the temperature gage working and staying steady. When I see lots of fluctuation, I immediately go to the spade connector and it has always proven to be the culprit. The problem is that the sending unit is a low-resistance unit. Any contact resistance in the connector is enough to cause the resistance to ground (ohms) to change enough to make a huge difference by percentage, of the total resistance. Clean contacts are imperative.
To check your sending unit, pull the spade connector off and use an ohmeter measure the resistance from the spade connector on the sending unit to ground (the engine block). Write down that reading and then start the tractor and let the engine warm up. Measure the resistance again. It should be much lower. When the engine is cool, the ohms should be around 700, when the engine warms to normal operating temperature, you should see 100-125 ohms. This simple test will tell you the condition of your sending unit without having to purchase another one new. In summary:
1. Check the spade connector for clean contacts.
2. Check the resistance of the sending unit to ground for cold and normal temperatures.
The results will determine your next steps. Good luck and save bucks $$$.