The driest parts of the Corn Belt picked up some much needed rain this week and corn futures prices suffered as a result. In sharp contrast to the weather forecasts of the past several weeks, this week's short- and long-range forecast maps started to show increased likelihoods of rain in key corn-producing states the next three weeks.

This is great news for corn farmers, who have been worried that the great start to the growing season has been threatened by a lack of June rains and calls for continued dryness. As soon as the forecast maps turned from dry to wet, corn futures prices turned as well.

In the past two weeks, the September corn futures contract has fallen from a high of $4.32 per bushel to close Wednesday at $353.75, a loss of more than 18 percent. As rains continue to fall, many traders undoubtedly expected the USDA to continue to upgrade the quality of this year's crop in its weekly Crop Progress report.

Corn quality ratings already are better than average this year and further upward revisions could cause further price declines. Traders awaited with great anticipation this week's USDA Acreage report. In a follow-up to the Planting Intentions report released in March, the Acreage reported on the number of acres actually planted to each crop type.

Natural gas prices fell to near their lowest levels of the year after two weeks of selling that started June 18. Natural gas prices have a tendency to fall at the beginning of summer, as producers make far more natural gas than the market demands. This overproduction is necessary in order to build adequate inventories for the winter months, when demand outstrips production. Also, the U.S. weather has become more mild in the last week, further reducing demand for electricity to cool homes.

As the price of natural gas began to fall from a high of $8.05 per billion cubic feet June 18, several traders exited long positions in order to avoid heavy losses. These sell trades pressured prices further. The final hit came on Thursday when the Department of Energy released its weekly natural gas storage numbers. The report showed that producers built inventories much more in the past week than analysts had expected and helped to allay some traders' fears that warm weather or possible supply disruptions from hurricanes would result in inventories being inadequate to meet winter demand.

After the Thursday report, natural gas futures fell to below $6.70 per billion cubic feet, a more than 15% decline from the highs seen June 18.

Crude oil prices jumped on Wednesday and Thursday following the Department of Energy's weekly Petroleum Status Report that showed a crude oil inventory increase roughly in line with analyst expectations.

Oil was buoyed by a larger-than-expected increase in refinery utilization the past week. As refiners utilize more of their capacity, they will need to buy more crude oil. If refiners continue to improve their utilization rates, something at which they have been unsuccessful so far this year, crude prices could go higher.

So far this year, refiners have faced myriad problems, including unscheduled shutdowns and seasonal maintenance that has taken several weeks or months longer than expected. If these problems persist and utilization numbers do not improve in coming weeks, it could put a lid on the recent price surge.

Opinions expressed solely are those of the writer. Walt Breitinger is vice president of commodities at A.G. Edwards and Sons. He can be reached at (219) 738-6460.