For most wheat producers, it has been a long time coming. Finally, we have above-average yields and $8.50 wheat. Oklahoma's wheat yields are expected to be about 35 bushels per acre compared to a 32-bushel 10-year average. Texas production is expected to average 30 bushels per acre compared to a 31-bushel 10-year average.

If Oklahoma's wheat production is 157.5 million bushels (USDA's estimate) and prices average $8.50, the Oklahoma wheat crop is worth about $1.34 billion dollars. Total Texas production of 102 million bushels would be worth about $867 million dollars.

Oklahoma producers have the opportunity to receive an average gross return of about $300 per acre and Texas producers about $250. Per-acre variable cost of production, excluding land, is about $110 per acre. Costs may be lower for lower yielding acres and higher for higher yielding acres.

The average return for Oklahoma producers is expected to be about $190 per acre and about $140 per acre for Texas producers.

This year's income is needed to offset disasters of the last two years. Oklahoma produced 60 percent of an average wheat crop last year and 74 percent of an average crop in 2006. In 2006, Texas wheat producers harvested 35 percent of an average wheat crop. Both 2007 and 2008 Texas wheat production was above average.

Some producers had their wheat destroyed by hail or have been unable to harvest the wheat due to excessive rain. Hopefully, these producers have hail and/or crop insurance.

Producers that have completed harvest are deciding when to sell. The first thought is that regardless of what happens to prices, selling wheat at $8.50 is difficult to call a mistake.

Some market chatter is about the relatively large increase in corn prices and that corn prices are supporting wheat prices. Hard red winter wheat is being priced as a food grain, not a feed grain. Hard red winter wheat prices would have to be within 70 cents of the Chicago Board of Trade September corn contract price before corn prices would support wheat prices.

At this writing, central Oklahoma and Texas Panhandle wheat prices are about $8.70. The CBT September corn contract price is $7.60. Corn is providing a price floor at about $8.30.

Another factor is that foreign wheat production is projected to be 21.9 billion bushels compared to a 5-year average of 19.9 billion bushels. World wheat stocks are projected to increase from 4.2 billion bushels to almost 4.9 billion bushels. The above-average foreign wheat crop is expected to put pressure on wheat prices in late August and early September.

The spread between the Kansas City Board of Trade December wheat contract price and the July wheat contract price is 33 cents ($9.78 - $9.75). It costs about 33 cents (3 cents per month storage and 3.5 cents per month interest) to store wheat until Dec. 1 in commercial storage. The market is signaling a 50/50 chance that storing wheat between now and Dec. 1 will produce additional income.

Before making the sell-versus-store decision, remember last year. United States and world wheat production was projected to be sufficient to build wheat stocks. Then it rained during harvest in the major wheat areas, wheat production was significantly less than expected, and wheat prices increased from about $4.75 to $14.

Can this happen two years in a row? It is not likely, but possible.

Most producers will not go wrong selling wheat for $8.50. I suggest that producers sell at least one-third of their production and possibly one-half at harvest. Then sell the remainder in two lots: one-half of the stored wheat in late September or early October and the remainder in mid-November.

Producers selling all their wheat at harvest should consider storing about 10 percent. This strategy will provide the opportunity to sell wheat if the market reaches $10.