Alaron Grains and Oilseeds Comment

CHICAGO - Oct 18/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn- Monday weekly export inspection report showed 41 million bushels of corn was inspected for near term export up from 39.8 the week prior but under a year ago of 45.7. Year to date inspections are 269 m.b. versus 204 a year ago. Considering recent price gains the numbers show a bullish demand trend. Monday's crop condition report was unchanged on the week at 61% in good to excellent condition and 4% over a year ago. They put harvest at 41% complete versus 48 last year and five year average of 43%. Many key mid-west producers continue to log. IN 28%, MI 14, MN 28, NE 26, OH 14 and WI 18% harvested. We know growers are allowing corn to sit in fields longer to save drying costs but harvest delays the next 6 days look weather related as well with wxrisk.com seeing big Midwest rains through Sunday. Great exports, good cash corn buying for feed and ethanol keeps the trend up but near term there is 10 days left for funds to take month end profits and there sure not to wait until Oct. 30 and 31. It will come before Oct. 27th. Longs must be cautious as Dec. corn has major resistance at 3.30 and month end looms ahead.

Bean- Monday's weekly export inspection report showed 38.6 m.b. of beans were inspected for near term export up from 26.1 the week prior and 35 a year ago. Year to date inspections are 122 m.b. versus 81 a year ago. Even with higher prices, bean demand continues to grow as many believe recent lows could hold into 2008 as wheat and corn look to steal soy bean acres in hopes of replenishing stocks from drought on wheat and ethanol demand depleting corn stocks. Early talk see 4 million bean acres this spring going to wheat and corn. Monday's crop progress report showed 69% of our beans crop is now harvest versus our five year average of 65. Growers are harvesting beans first for cash to pay harvest time farm debit and holding corn in hopes of higher cash corn later. This should continue to harvest's end. Demand for beans remains strong and should continue strong into Jan. as Asia fills protein needs. Most of beans recent moves are funds buying out of short positions as they see harvest lows as in the the market moving to demand driven fundamentals. Support on Nov. lies down at 5.75 with resistance at 6.04, 6.08 then 6.15.

Wheat- Monday's weekly export inspection report came in at 18.6 m.b. down 2 m.b. from the week prior and 3 m.b. under a year ago. Year to date inspections are 319 m.b. versus last year's weak 377. It is a slightly negative near term demand signal. Monday crop progress report put planting of our winter wheat crop at 79% complete versus 80 on the five year average with 52% emerged from the ground. Rainfall in key producing western plains and southern delta states are at near perfect, setting eventual early crop development rating to come in good. We are seeing profit taking off new highs but new highs continue to come as talk of another Australian production cut is expected soon. Like corn, wheat traders too enjoy huge profits setting the stage for a month end profit taking break, so longs need to be cautious. Support on Dec. wheat lies at 5.18 then 4.80 which would be a 30% retracement to this point but of course we could rally 25 or 50 cents higher before we break but again be ready. If the break comes it will be before Oct. 27th.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

DISCLAIMER: The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.