Alaron Grains and Oilseeds Comment

CHICAGO - Apr 18/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's weekly export inspection report showed 29.8 million bushels of corn was inspected for near term export up from 27.4 the week prior and equal a year ago. Year to date inspection are 1.303 b.b. versus 1.156. The good inspection number comes as South Korea is looking to purchase up to 500 t.m.t. of US corn for near term shipment. Demand remains a positive force. Our crop condition report put corn planting at 4% complete versus 3% last week, 8% a year ago and under our five year average of 9%. Big Midwest producers read like this IL, IN and IA at 0%. OH and NE at 1%, and MO 18%. This week looks to be the first week we can get field preparation work done and some planting from Wednesday to Saturday, but wxrisk.com sees rain bringing an end to planting from Sunday through Wednesday of next week. If our weather updates keep rain in the forecast for next week we could see more spreading of buying corn, selling beans as delayed corn planting could lead to less corn acres and more bean but if they dry up next week before Friday's close traders may begin to unwind spreads selling corn and buying beans. All the market is doing is trading weather's effect on planting progress. If you haven not signed up for a weather site in tune to weather it is effect on grain to trade consider calling Dave Tolleris at: 804-717-8256 at wxrisk.com. It is the best site out there.

Bean:

Monday's weekly export inspection report showed 12.4 m.b. were inspected for near term export down from 22 the week prior; but slightly over a year ago of 11.6. The same recent story as our near term demand is declining with cheaper South American crops flooding the market but demand still remains better than a year ago. South American exports will keep US sales slow until June 1st, when their sales will begin to wind down leaving the US as the primary port for beans again. The National Oilseed processors crush reports showed 147 m.b. of beans were crushed in March to get the meal and oil up 17 m.b. from the month prior. the better curshing figures should suggest strong demand for soy oil for human food use and soy meal to animal feed but the soy oil inventory rose suggesting recent high prices are slowing demand near term. Soy oil sales are up almost 40% the last six months and demand on the year will remain strong. Now, put that aside. Beans are trading corn's planting problems. We have not planted an acre of beans yet, as 85% of the beans are planted in May. As corn struggles to get acres planted in April, traders believe if this continues we will end up planting less corn and more beans. That will not happen, but the fear or psychology is a trading tool. As soon as wrist.com says the pattern will turn more seasonably drier and warmer, we will buy beans.

Wheat:

The weekly export inspection report showed 21 m.b. of wheat was inspected for near term export up from 14 the week prior and 9.9 a year ago. Inspection remain 100 m.b. year to date behind a year ago. We continue to see some level of increased demand but I am sure it is low quality wheat for feed or Asia. Demand is not a positive force until new crop availability. After the close Monday at 3:00p central time our crop condition report showed 55% of our winter wheat crop is in good to excellent condition, down from 64 the week prior but over a year ago of 39%. Key producer Kansas was 36% g-E versus 55 last week. TX 62 versus 69. NE 47 verus 60. Less important states were MO 10% G-E versus 46. IN 39 versus 51. IL 28 versus 56. We expected the lower ratings after the hard Easter weekend freeze and had an appreciable rally for it. Now what? Next Monday's report is equally important. This week looks warm, sunny, with some timely rain. A healthy crop should improve a lot on next Monday's update. If the field ratings are down 1 or 2% to unchanged or up just 1 or 2% in the G-E category. It will suggest recent freeze damage is permanent. Then we will have to figure out did be lose 150 m.b. or 400 m.b. but an improvement of 5 to 8% would suggest little permanent damage leaving the worst behind us and a more bearish mindset.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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