Alaron Grains and Oilseeds Comment

CHICAGO - Apr 5/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Today's weekly export sales report showed 549 t.m.t. of corn was sold last week. Asian sales were off at 220 t.m.t. but Mexico's drought had them in for 180 t.m.t. We were off 51% from the week prior in part due to last Friday's report pushing importers to the sidelines and to some extent buyers are clearly waiting to see if lower cash bids can occur. Now that the smoke has cleared from last Friday's monster planted acreage report, what does it all mean? the old timers in the industry say "what report"? It is not what you plant, but what you grow, and Mother Nature will determine yields. The technical and computer trading funds crunch the numbers to try and figure what we can produce with normal weather and yields, while they create software tables to adjust downward yields based on rainfall or lack of to determine crop losses. Since last Friday funds subtracted longs and added to shorts but still maintain a net long position. If the prior trend continues, corn will be in for further selling unless or until bad weather enters after planting. If we do plant the 90 million acres suggested and yields are equal to last year with the projected USDA usage and demand our ending stocks will still come in under 1 b.b. In other words, we need to have perfect weather or the 12 million more acres to be planted to keep up with demand will not be enough to keep our ending stocks from shrinking. Weather and its effect on the crop will get more attention this year than any other. After finishing off selling the bearish acreage report with lower prices Monday and Tuesday, traders began buying back shorts Wednesday. As weather reports call for cold wet weather in the Midwest through Sunday, then warmer next week but wetter suggesting Midwest corn growers will not get in the fields before April 18th. leaving thoughts that half or more of this year's crop will be planted in the last half of the preferred planting window, where yields tend to be smaller as more corn matures later into hotter summer dates in July. If weather gurus come in next week and call for an end to the cold and wet conditions, they will unwind the spreads put on this week that was buy corn, sell beans. So, we are setting up for a big down day in corn soon but it is still up to weather to tell us when. WXRISK.COM sees Tuesday to Thursday as a wet Midwest. One last note, next Tuesday is our USDA monthly crop report that may or may not adjust carry over stocks for corn, wheat and beans. It should not unveil any surprises but be aware.

Bean:

Thursday's weekly export sales report showed 259 t.m.t. of beans were sold last week, down from 270 the week prior and 354 t.m.t. a year ago. We can blame some of the drop as importers were absent during last Friday's acreage report but key US and world bean buyer, China, was absent for the first time in over a year. some will soy they they are turning to South America to fill needs. We will see. Like corn, bean traders too look to Mother Nature to determine crop size. Eight million less acres to be planted certainly will cut our record ending stocks this year of 595 m.b. If we plant the 67 m.a. the USDA estimated with last year's yield and projected usage our ending stocks for 2008 will be near 200 m.b. Still a very lofty ending stocks as 150 m.b. or less in needed to get users and processors nervous. But that number leaves us one drought from running out and unless prices move high enough to discourage over usage and demand or find more acres we would be poised to move carry over under 100 m.b. for 2009. Everything suggests beans will move higher long term. Near term November futures find support at 7.98 a close under here and 7.82 is next stop. If we get a weather call to drier, warmer conditions, we will look for that sharp up day in beans as traders unwind their long corn, short bean spread.

Wheat:

Thursday's weekly export sales report showed 214 t.m.t. of wheat was sold last week down 60% from the week prior and 54% below a weak four week average. Clearly, importers await new crop harvest in may and June of our hard red winter wheat crop that currently is off to a great start and with continued good weather through May it will be the best quality crop in three years. Near term though the period of this past Wednesday through Sunday is bringing early morning frost and record breaking cold to a large area of the western and northern plains wheat states. The head is not developed enough to be vulnerable to damage but fear in the market brought on short covering into our three day holiday. We are in a weather market, so ignore demand and look to weather for pricing volatility into May. if we come in Monday and see a return to warm temps and timely rains, I will sell K.C. July Futures as the weather scare that pulled us up over 30 cents off Monday's low will see sellers return but WXRISK.COM will determine our next move on the weather.

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.