Much of the U.S. is reporting dry summer conditions and with the lack of water comes the greater possibility for a reduction in the potential 2012 crop production.

A reduction in crop yields has led to some increases in market prices, most of which are now heading for two year highs.

For farms that have done some advanced marketing of crops using cash forward contracts, hedge to arrive or some futures or options contract, now is an important time. As a farm producer who has a delivery contract, you need to know the exact terms of that contract and what will be the impact of not having enough bushels to cover that contract if your crop fails.

The key is to know the details of the fine print. You need to know the terms and options you have in your delivery contract and evaluate your options, responsibilities and opportunities to fulfill your obligations.

Corn yield likely to be lower than USDA projections - Accuweather

Spider mites attack soybeans already hit by drought

In some agreements the producer is required to deliver the actual bushels. This may mean the producer will need to go out into the market and physically purchase bushels at whatever cost and location to make the required delivery.