The relentless climb in crude oil prices has the market believing that $70 a barrel long-term prices are here to stay. Historical volatility and current fundamentals make this high and flat price curve a very unlikely scenario.

The natural gas market has seen prices soften on the rebuilding of stocks, but the current heat wave in the Southwest and the possibility of hurricanes should keep the market from continuing to decline. And, there is probably more upside risk than the market has currently priced in.

Lastly, there is probably no more important development in all of agriculture than the declining spread in spot ethanol to spot gasoline prices. Basically, the immediate future of agriculture depends on the price of ethanol. With 6 billion gallons of proposed ethanol expansion, the market is trying to gauge incremental demand. If the current spreads hold, ethanol will be in no shape to buy $4 corn, and that development resets all other calculations.