Alaron Grains and Oilseeds Comment

CHICAGO - Mar 7/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

CORN:

Monday's weekly export inspection report showed 51.6 million bushels of corn was inspected for near term export up 16 m.b. from the week prior and 13 over a year ago. Year to date inspections are 1.081 b.b. versus 926 m.b. a year ago. with long term corn demand being the most bullish of all the grains, it is no surprise that last week's price pull back triggered buying interest. On my Friday report I gave 4.10 basis May futures as the lowest we could trade this week ahead of this Friday's USDA monthly crop report. With a sharp drop in stock market futures Monday, index funds sold more of their long profitable positions pushing May to 4.13 before short covering and new buyers entered pushing us to 4.27. 4.10 looks to hold into Friday's report unless stock futures currently up today end up collapsing Wednesday and Thursday at which point we can expect more corn liquidation.

BEAN-

Monday's weekly export inspection report showed 24.8 m.b. of beans were inspected for near term export, down 9 m.b. from the week prior, 2 m.b. under a year ago and 5 m.b. under a strong four week average. It is off on our comparisons but still a good number for this time of year considering South American crops are coming to harvest and cutting into our world export market share. Last year we saw our inspections fall below 24 m.b. every week from March 27th to June 26th before Brazil was sold out and the US became the sole port of origin to buy beans from in the world. With record crops in their region we expect a seasonal slow down but Brazil looks to be less aggressive an exporter than a record crop suggests as they look to keep more beans home for their exploding bio-fuel needs. I gave 7.68 as worst case scenario this week if further stock declines occurred dragging bean profits from longs with it. Monday saw 7.76 as a low before recovering. That 7.68 area looks technically strong but watch these stocks futures closely as large index funds are still fat with long position profits to draw on if needed.

WHEAT-

Monday's weekly inspection report came in at 18.3 m.b. down 5 from the week prior and 2 m.b. over last year. Not a good demand signal considering last week's price break. Importers await new grain in May now. Wheat's attention is slowly turning to supply side issues as we embark on breaking dormancy on our winter wheat crop. On Friday I gave support to buy on the July Kansas City Exchange futures at 5.00. After hitting 4.98 we turned up to 5.12 with the market settling back today Tuesday. You should have to K.C. 4.90 may put for downside protection as recommended Friday as were still early on weather becoming sole driving force. The best weather site out there is wxrisk.com. Their 90 day outlook has the western plains winter wheat crop states as drier than normal. They see Thursday through march 16th as unseasonably warm in Texas, Oklahoma, Colorado, Kansas and our southern delta states. This should lend talk to dormancy breaking. April will be a key month for crop development. If this forecast holds true traders will find their way long the Kansas City Futures where our winter wheat crop is delivered against the futures. Start watching this now.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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