Ukraine and Russia are now harvesting their 2012 wheat crop. Reports indicate that, as expected, yields are about 40 percent less than last year.

Reports indicate that Argentina’s planted wheat acres may be 20 percent less than last year and some analysts lowered their U.S. spring wheat production estimates.

The five-year average Oklahoma/Texas Panhandle cash wheat price is about $6.05. With U.S. ending stocks slightly less than and the stocks-to-use ratio equal to the five-year averages, it is difficult to justify $8 wheat.

In the last 13 trading days, the Chicago Board of Trade December contract corn price has increased from $5.06 to $7.08. Based on projected corn production, use and ending stocks, Allendale, Inc. estimated that the CBT December corn contract price would peak at about $7.25.

In the June WASDE, corn production was estimated to be 14.79 billion bushels. This estimate was based on 166 bushels per acre and 89.1 million harvested acres.

Because of hot dry weather, projected corn yields have been lowered. Using 154 bushels per acre and 89.1 million harvested, production would be 13.72 billion bushels.

Using USDA’s corn marketing-year corn use and exports, 2012/13 corn ending stocks would decline from June’s 1.88 billion-bushel estimate to 810 million bushels. Ending stocks below 850 million bushels justifies current corn prices.

Historically, in short crop years corn prices peak in late August or early September. When corn prices peak, wheat prices will probably peak. The wheat marketing-year wheat prices trend is normally set in late August and/or early September.

Producers must have a marketing plan. Slight modifications are acceptable. If the plan was to sell in one-third increments and one-third has been sold, consider selling a small percentage of the remaining wheat on this rally.

If you need $8 wheat to make ends meet, sell a higher percentage. As seen over the last three weeks, situations and prices change rapidly.