As I write this post September 2011 wheat futures are trading at slightly more than $7 per bushel. If I had asked any wheat farmer three months ago would they like to lock in $7 wheat for next year's crop, I am fairly certain that 100% of them would have said yes.
These farmers now have that choice, subject to the basis issues as discussed in a previous post. I would strongly suggest that all wheat farmers review their budget for next year and see if it makes sense to try to lock in prices near the current level. Any time that a farmer can at least lock in good prices to cover all of their estimated production costs allows the farmer greater flexibility in marketing their crop and it also pleases the banker.
In a side note, I spent Friday and Saturday driving combines for my cousins down in Walla Walla. I drove a Case IH 2388 and 1470 for about 18 hours and that was my idea of a vacation. Yields ranged near 125 bushels for dry land wheat and with the current good prices, I think my cousins might have a good year in farming. They have some steep hills down in this area and kicking in the 4 wheel drive is always fun for a combine driver. Using three machines, you can cover a lot of acres in a day, however, this year the fields had a lot more down wheat and the speeds are much lower than normal. it is fun to see 3 combines, 2 bunk-out wagons and 2 semis all going strong.