Alaron Grains and Oilseeds Comment

CHICAGO - Jan 17/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

CORN~

The week started with Tuesday's weekly export inspection report showing 33.4 million bushels of corn was inspection report showing 33.4 million bushels of corn was inspected for near term export, up from 26.8 the week prior and equal a year ago. Year to date inspections are 793 m.b. versus 673 a year ago. We are seeing a decent return on demand after recent holiday closings slowing exports. March corn opened up the 20 cent limit but after a three day 50 plus cent rally and funds long more than 400 thousand contracts fat with profits many headed to the bank leaving us with 6 cent gains on the day. Wednesday showed beans to be the leader. After sharp losses Tuesday, beans turned up again Wednesday pulling corn along but we failed to close over major chart resistance of 4.16. The question is can we fill some or all of the chart gap left from last Thursday high to Tuesday's low or will large index funds make it a break away gap and take us to our next objective of 4.40 to 4.50 first. Technically, if March closes over 4.16 buy long or those worried about the chart gap buy the February 4.10 put for about 8 cents. It expires January 26th.

Just a note, I am out of the office this Friday, so I will submit a report on Thursday.

BEAN~

Tuesday's weekly export inspection report showed 28.4 m.b. of beans were inspected for near term export, up from 19.8 the week prior and 19.1 a year ago. Year to date inspections are 541 m.b. versus 436 a year ago. Nice pick up in demand after holiday slowdown but can it continue with South American beans maturing and looking better the the week. Come February 1st importers may begin to contract Brazilian beans for futures shipment. Tuesday started with a higher open in sympathy with limit up corn but after Friday's crop report came out, less bearish than thought and 40 cent plus gain closes Friday. Some of the 130 thousand long contracts being held by funds fat with 60 cent gains from last Thursday's close took it to the bank leaving us down 8 cents on the day. Turn around Tuesday theme came on Wednesday as funds entered back long. There are no fundamental news events near term, so charts become our pricing force with a theme that beans need to firm up on fear of hearing further talk of bean acres going to corn. March beans need a close over major resistance of 7.26 now . We have a chart gap down to 6.78 to 6.92 so consider the February 7.20 put for 10 cents even if your long as it is insurance on the downside through January 26th. Charts look bullish near term but long term beans look for the biggest gains in 2007. Look at the November 8.00 call to buy and sell the 10.00.

WHEAT~

Tuesday's weekly export inspection report came in at 15.8 m.b. versus 16.7 the week prior and 12.8 a year ago. Year to date inspections are 517 m.b. versus 633 a year ago. With demand being so consistently weak for weeks, we can only assume the week's report being better is post holiday business. Wheat settled sharply lower Tuesday as profit taking in corn and beans and talk that weekend ice storms in our western plains failed to cause alarom over our dormant winter wheat left wheat over bought after a less than bullish crop report Friday. Wednesday saw wheat rebound after filling its price gap Tuesday left from last Thursday's high to Friday's low and with some strength in sympathy with higher corn and beans and talk by the weather site wxrisk.com seeing another winter storm in the far southwestern winter wheat states Friday and Saturday and again Monday and Tuesday. We are not likely to kill wheat lying dormant at its weed stage but the market sees one bad winter storm after the next and fear rises ahead of fact. March wheat has support at 4.62, and major resistance at 5.04.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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