The summer is usually a slow time for commodities with mainly the exception of the grain markets. This summer might be relatively inactive for many commodities as they are consolidation gains from the recent rally over the last couple months.

The weather in the Midwest may dictate the prices of corn and soybean futures through August. Extreme heat in the Midwest during the next few weeks would likely cause a rally in corn futures as it enters the critical pollination stage.

That is usually a longshot bet to expect extreme weather in a small time window to cause major damage, but rally can happen quickly just off a change in the weather report. Nonetheless, corn futures are dealing with an unexpected two million additional acres and rally probably wouldn’t extend too far.

Soybean futures enter their critical weather timeframe in August. Supplies are very tight on soybeans, so a weather scare could cause a sizeable rally. If the weather cooperates the next couple months, we may see lower prices for corn and soybeans.

Sugar futures are in the midst of a strong rally, so this is a market worth watching this summer. Unleaded gas futures have also been surprisingly strong and we could see this market rollover or make another leg higher. Gold futures should remain relatively quiet as the market is caught in a range between $880 and $980. Finally, is there a bottom in sight for lean hog futures? At the very least, it must be close.

The USDA pulls a major surprise out its hat every so often and the Plated Acreage Report on Tuesday left some traders with their jaws on the floor. Most corn traders and analysts were expecting a drop in planted acreage this season for corn, but the final USDA number came in about 3 million acres above the average estimate. This, of course, sent corn futures plummeting and they closed limit down on Tuesday.

The damage has been done from the report, but luckily the corn market had already dropped substantially throughout the last couple weeks and it was oversold. Corn futures did stabilize today and actually closed 2 cents higher.

The supply and demand picture has changed significantly as there will be much more supply come harvest time if the weather cooperates through November. Much of the corn crop will enter the critical pollination phase in the next couple weeks and extreme heat during this time could cause major crop losses. The weather is expected to turn warmer in the Midwest, but we will have a better picture on the weather after the long weekend.

The corn futures market will be driven mainly by weather developments in the next month with an overhang of a new increase in expected supply. With corn trading at $3.69 a bushel, it will take some major weather problems for this market to break through the May high around $4.75.

As most commodity traders have fallen asleep watching live cattle futures trade for most of this year, the market might actually be coming to life. Live cattle futures have been trading in a tight range for the last six months, but the market moved its limit for the day on news that beef output in May was down 8.4 percent from last year. This is a big drop and now traders are worried the shrinking supply numbers have finally hit the market.

August live cattle futures closed 3.00 points higher on Monday to close at 85.40. An ultimate breakout above the 90-level would look extremely positive on the charts. At the very least, I would say this market has put in a bottom and the lows around the 80-level should hold.

It will be interesting to see of lean hogs can also try to rally. This market is still suffering from the swine flu outbreak and demand has yet to fully recover. Prices of hogs will eventually get too low if they aren’t already there. This market is setting up for a good long-term buy, as demand will eventually return and the breeding numbers should continue to fall into the near future.

Supplies of soybeans are becoming tighter as the end of season supplies dwindle down to levels where farmers are unwilling to part with them. This could lead to a very wild ride on the July soybean futures contract.

The front month, July contract, is in a position where supplies are hard to find and prices could make a sharp move higher or lower going into contract expiration. The July contract closed at $12.01 on Friday, while the November contract closed at $9.91. The November contract is not priced as high, because the season’s crops will be harvested by November and new supplies will become available.

The important USDA Acreage report will be released Tuesday morning. This will detail the final numbers on how many acres were planted this year. Most analysts are expecting an increase of about 2 million acres from the March estimates. A lower number could send soybean prices heading north.

On the charts it looks like soybeans have made a top for the season. Weather conditions in the near future look favorable for soybean crops. However, soybeans need to make it through the critical August period to likely ensure a good crop for the season. Good weather and a 2 million plus increase in acreage numbers will make it very difficult for November soybeans to hit new highs in the next couple months.