Alaron Grains and Oilseeds Comment

CHICAGO - Aug 8/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn- The week's reports started with Monday's weekly export inspection report showing 48.3 million bushels of corn was inspected for near term export up 4 m.b. from the week prior and 18 m.b. over a year ago. Year to date inspections are 1.876 b.b. versus 1.596 b.b. a year ago. The report continues to show a stellar demand pace. The demand side of the market should remain strong through year's end as Asian neighbors of China look to the US to buy corn that China will fail to supply them. They hold more corn back for ethanol consumption and of course demand here especially at harvest for corn to fill ethanol warehouses will keep demand robust. The crop condition report came out of the close showing 57% of the crop in good to excellent condition up 1% from the week prior and 5% better than a year ago. We are 97% through our key silking stage, weather is less destructive from now on. States improving were mainly all eastern like IL, IN, OH, WI, and MN while the western belt losers were IO, KS, MO, and ND. If last week brought a 1% while this week looks cooler and wetter we must assume next Monday's report will improve as well. Wxrisk.com sees the western corn belt as seeing better than expected rain through Tuesday then again Thursday and Friday. he sees next week as wet as well with no real heat dome before August 21st. Corn's only hope for near term strength comes if profitable short positions take profits before Friday's 7:30a USDA crop report. Any strength into the report should be sold if next week continues to look wet. Support on September corn lies at 2.34 with resistance at 2.43. A close over 2.43 puts next resistance at 2.54 and a close under 2.34 support finds 2.30 next stop.

Just a couple notes: The monthly USDA crop production report comes out Friday at 7:30a central time. The common thinking is the USDA will slightly lower the production number from last month's report due to the lower quality rating since then. Next overnight trading rules. If you place an order on the overnight electronic trade and it is not filled, that order carries over to the day session. Then if not filled it is cancelled end of day session. Day session orders do not carry into the overnight session.

Bean- Monday's weekly export inspection report showed 15.4 m.b. were inspected for near term export up 6 m.b. from the week prior and 10 m.b. over a year ago. Year to date inspections are 888 m.b. versus 1.050 b.b. It is a start to better demand but it came on a 25 cent decline from our recent high two weeks ago. Demand fundaments remain a non-pricing force. The crop progress report put 72% of our crop in its key pod setting stage when yields are most effected, leaving about 12 days left where weather can either hurt or help yields in a big way. The crop condition report came in unchanged from the week prior at 53% G-E condition and 2% over a year ago. Like corn, beans too see this week's weather as potentially the best week for rain this growing season and if we can get some short covering or profit taking ahead of Friday's USDA crop report and wxrisk.com is still calling for a cooler wetter week next week, use it as a selling opportunity as it will take us through key yield development time. We came into today Tuesday, with first support on November futures at 5.76 then 5.70 with resistance at the bottom of the chart gap at 5.94.

Wheat- Monday's weekly export inspection report showed 18.6 m.b. of wheat was inspected for near term export up 5 m.b. from the week prior, but 7 m.b. under a year ago. Year told ate inspections are 141 m.b. versus 162 a year ago. Demand, though up on the weak, remains questionable at best. Monday's crop condition report showed 32% of our spring wheat crop is in G-E condition unchanged on the week and below a year ago of 67%. We are only off 2% from three weeks ago suggesting weather and its impact on yields and quality is over. We are now 49% harvested versus 21% last year and our five year average of 17%. this suggest were now moving into a market environment where demand becomes the primary pricing fundamental as supply side issues move to the sidelines until our winter wheat crop goes to planting in September. Demand running under a year ago and spring wheat harvest pressure underway is a model for lower prices. All wheat were down 10 to 13 cents in the final hour of trading today. We came in today with September CBT wheat support at 3.82. Next support is 3.74 then 3.63. Sept. MN support is 4.64 then 4.50, while Sept. KC finds support at 4.70 then 4.58. Traders expect a bullish wheat production report Friday, as the USDA lowers spring wheat production and our carry over stocks for next year. If we get some pre-report short covering before the report we will look to sell short a higher opening Friday.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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