Alaron Grains and Oilseeds Comment

CHICAGO - Nov 7/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn- Monday's weekly export inspection report came out at 10:00a central time showing 51.9 million bushels of corn was inspected for near term shipment, up from 40.7 the week prior and 36 a year ago. Year to date inspections are 395 m.b. versus 320 a year ago. Well, when new contract high prices on the week bring a sharp jump in demand it tells you something and that being today's supply demand fundamentals say prices are still cheap. the crop progress report after the close Monday showed 81% of the crop is now harvested versus 88 a year ago and five year average of 82%. The logging states were IN 64%, MI 45, OH 47, and WI 59%. It is these eastern corn belt states that are expected to have the lowest yields. Thursday's USDA crop report is based on harvest up to Nov. 1. There is no Dec. production report so, after Thursday's report the next one is in Jan. and that could show another and final production drop as the rest of the worst yielding corn states come in. Thursday's USDA monthly crop report, due to come out at 7:30a central time, is expected to lower c crop production. The average pre-report trade guess is for production to be 10.838 b.b. down 67 m.b. from our Oct. report and 274 m.b. under our 2005 crop. Ending stocks come next Sept. 1 are pegged at 912 m.b. down 84 m.b. from last month. Anything over these estimates and prices open lower but under and we open higher. Consider buying the Dec. futures and a Dec. 3.45 or 3.40 put for protection. If we come in more than 150 m.b. down look for up limit trade of 20 cents.

Bean- Monday's weekly export inspection report showed 38.1 m.b. of beans were inspected for near term export, down from 49 the week prior but over a year ago of 34 m.b. year to date inspections are 249 m.b. versus 192 a year ago. Contract highs saw a slight pull back in demand but its still a good number and where corn stocks are tight into next year bean inventories are still at record levels allowing for some soft spots in demand. Monday's crop progress report showed 90% of the crop is harvested leaving little to question after Thursday's crop production update. Thursday's USDA crop report has an average estimate for production of 3.240 b.b. up51 m.b. from our Oct. report and ending stocks come Sept. 1, 2007 of 583 m.b. up 28 m.b. from last month leaving production and ending stocks at record levels. Note, last month's report was higher on production and ending stocks yet we rallied from 5.70 to 6.80 following its release. Reason, we are long since done pricing in the record crop. The rally is all about bean demand for exports being up. Soy oil for the bio-diesel fuel industry being in high demand and talk of 5 million acres of more going from bean production to corn and wheat. It has the large equity funds trying to price it all in. There is a lot of risk with longs into the report as we could see a lower open then a higher close. As always it is not how we open that signals the trend but how we close on Thursday. Buy a break on Thursday if seen.

Wheat- Monday's weekly export inspection report showed 9.8 m.b. were inspected for near term export down from 11.8 the week prior and 17.7 a year ago. Year to date inspections are 358 m.b. versus 439 a year ago. As is the case every week, demand remains weak on the year but always be ready for any export business no matter how small to have a bullish effect on the day as inventory is historically tight. Monday's crop progress report put planting of our winter wheat crop at 94% complete and 59% in good to excellent condition off 1% from the week prior and 2% over a year ago. Key loser was OK at 41% versus 46 the week prior. No scare yet, but this is the most important winter wheat crop in 15 years so weather in key producing states will be watched closely now and they are TX, OK< CO and KS. There is no production numbers for wheat on Thursday's report but they will adjust ending stocks. Some see ending stocks lower as the government factors in wheat fields production lost to disappearance as growers set it to graze cattle and other see it up as poor demand needs to adjust down our export projection and add it to stocks. Most believe world ending stocks will be down as well. There should not be anything that shocks wheat in this report so, look to have wheat assume a followers roll Thursday. Those looking to buy can buy the Dec. 5.00 call for 10 cents or 500 dollars. There is not much time left but it controls risk.

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.