During the last few weeks, the Oklahoma wheat crop condition has not changed much. Wheat in central and north central Oklahoma is probably in the best condition. The farther you go south of I-40 (the highway that runs east-west through central Oklahoma) the poorer condition the wheat crop is in. As one analyst put it, the crop looks good from a car, worse from a truck and thin from the air. Dryland wheat in the panhandle is in very poor condition. Wheat conditions are not as good as it looks from the road.

   This week, different analysts estimated Oklahoma's wheat production between 120 million bushels to 156 million bushels. I estimate that 80 percent of the 5.7 million planted acres will be harvested. Using an average yield of 32 bu per acre, Oklahoma wheat production is estimated to be 146 million bushels.

   The KCBT July wheat contract closed at $8.61 1/4 and was 21 3/4 cents higher. Next week will be critical. If the July wheat contract price is above $8.70 on Tuesday's close, the July contract may establish a sideways pattern between about $8.50 and $9.50. I think that the market realizes that the hard red winter wheat crop may not be sufficient to build next year.

   The market appears to have two dilemmas. First, the market will need to buy between 40 and 50 million bushels of hard red winter wheat during the month of June. I do not know how much wheat has been forward contracted, but I do know that it is a higher percentage than usual. Wheat prices will have to remain relatively high to get producers to sell the wheat. Second is if the wheat price is too high, producers will want to sell most of their wheat at harvest. With a potential large foreign wheat crop coming on, the demand may not be there to maintain the basis. Elevators would lose both storage income and basis.

   It is probably too late to forward contract wheat. The expected central Oklahoma June price is $8. If the wheat crop is larger than expected, prices will be lower and if production is less than expected, prices will be higher. We will not know production until the wheat is in the bin.

   Given that U.S. wheat stocks will probably increase next year and that the foreign wheat crop appears sufficient to build world wheat stocks, prices are expected to peak in June and then decline in August. If world wheat production is 23 billion or greater, I expect December 1 Oklahoma wheat prices to be between $6 and $7. Producers may want to consider selling 1/2 of their production at harvest, 1/4 in late September and the final 1/4 in mid-November.