Alaron Grains and Oilseeds Comment

CHICAGO - Apr 3/07 - 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 32.5 million bushels of corn was inspected by the USDA for near term shipment. This was under the week prior of 44.7 our four week average of 41 and a year ago of 43.3. Year to date inspections are 1.241 b.b. versus 1.089 b.b. a year ago. It shows a slight slow down in demand near term, which could be only this week as the report last Friday left importers waiting for lower cash bids off the bearish planted acreage report. We should find a low early in the week for corn and then see demand pick up, especially as we have one less export day this week as markets are closed Friday for the Easter Holiday. Sunday night electronic trade had corn off limit down trading but the day session traded limit down until late closing off our 20 cent limit down by 1 to 2 cents. Tuesday was two sided with most of the day spent higher as sellers saw the market off 40 cents since the report and await follow through from funds. The break fairly priced in the 2.5 m.a. amount that came in over the average pre-report trade guess. Front month's remain weak while December new crop futures still look friendly at lower prices as every acre intended to be planted is critical to keep from further dwindling or low ending stocks.

Bean:

Monday's weekly export inspection report showed 18.5 m.b. of beans were inspected for near term export off 1 m.b. from the week prior, 5 m.b. under our four week average but over a year ago by 4 m.b. Year to date inspection are 857 m.b. versus 711 a year ago. We're off, as South America flood beans from harvest onto the market but sales still stay ahead of a year ago and that is important as it suggest demand is greater than their record crop can produce. Additionally my prediction that sales of US beans would continue ahead of a year ago due to Brazil keeping more of their beans home for their increased bio-diesel fuel needs is occurring. Brazil's exports in March are under March 2006. This should continue the next 2 months. Monday saw beans open lower in sympathy with down limit corn and nearly down limit wheat but quickly turned up on the day sharply as profits taken from corn moved into long beans after a very bullish long term planted acreage report. Tuesday saw price corrections into midsession as traders will not be overly anxious to get long beans as we have not planted an acre yet and a 3 day holiday lies ahead having traders thinking being more flat on the week. This could set us up for a rally when we return next week.

Wheat:

Monday's weekly export inspection report showed 16.6 m.b. were inspected for near term export up from 14.6 the week prior, 12 m.b. a year ago and equal our weak four week average. Year to date inspections are 721 m.b. versus 832 a year ago. Nothing to get excited about as we are mainly moving low quality wheat to feed. Weather and its effect on our winter wheat market is 90% of the pricing influence through mid-May when harvest begins. Monday at 3:00p central time we got our first crop progress and condition report of the year by the USDA wheat and eventually corn and beans when planted, will live or die off these Monday reports. The crop progress report put planting of our spring wheat crop at 3% complete versus the five year average of 3%. Key spring wheat states to follow are: ID, MN, MT, ND, SD, and WA. The condition report will come out on spring wheat once 30% is seeded. Our winter wheat crop saw its first condition rating. It comes in 5 categories: very poor, poor, fair, good and excellent. The market adds up the good and excellent numbers and uses an increase on the week as bearish as it shows improvement for yields and a decline on the week as bullish as it suggests bad weather and decline yields. This report had the good to excellent category at 71% versus 38% a year ago. In other words, we are off to a good start after a warm and wet March. Next Monday's report could derail the improving conditions near term as the weather site wxrisk.com sees near record cold Wednesday to Monday from KS east to OH and as for south as OK. Snow in the Dakotas and frost in KS. this could create concern among traders but I do not think we will kill any of the wheat as the head is not fully developed but if they decide to trade fear before fact we could see short covering ahead of our Friday closing.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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