Alaron Grains and Oilseeds Comment

CHICAGO - May 2/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's weekly export inspection report showed 41.5 million bushels of corn was inspected for near term export, up from 37.3 the week prior and 34 a year ago. Year to date inspections are 1.386 b.b. versus 1.242 a year ago. A good number for demand even as many thought a fast planting pace this week might drop cash bids having importers waiting. The crop progress report at 3:00p central time showed 23% of our projected record 90 m.a. crop is now planted versus 11 the week prior, 48% a year ago and 5 year average of 42%. Key Midwest producers read like this: IL 36% versus 66 a year ago. IN 13 vs. 30. IA 14 vs. 58. MO 45 vs. 88. NE 14 vs. 36. OH 19 vs. 38 and WI 11% vs. 27 a year ago. Only 4% is emerged from the ground with 5 of the top 7 producers at 0 emerged. It looks like the planting window will stay open until at least Saturday. Only minor planting delays due to rain the next 48 hour in southern Illinois and Indiana will occur. Planting progress should surge this week. Technical's remain the same with December futures planting lows at 3.40 to 3.48 worst case scenario; if planting goes uninterrupted into month end but rain delays are sure to occur periodically. Wxrisk.com sees potential for late this week end into early next week as possible disrupting our planting progress. Monday saw lower prices as the week looked warm and dry enough to plant in 80% of our corn states through Saturday but prices turned up Tuesday when the lower than expected crop progress planting number came out. December corn finds resistance at 3.78 with first support at 3.54 then 3.48 and 3.40. We need a close over 3.92 this week to turn technically bullish. Near term corn remains planting questionable but long term bullish.

Beans~

Monday's weekly export inspection report showed 14.9 m.b. of beans were inspected for near term export, unchanged from the week prior but over a year ago of 10 m.b. Year to date inspections are 925 m.b. vs. 752 a year ago. Not bad considering South America's dominance for export this time of the year but a low price on US soybeans last week and a much lower dollar vs. foreign currencies made beans fair value. The dollar index has been down appreciably lately. Monday's crop progress report showed 3% of our crop is planted vs. 9 a year ago and 5 year average of 7%. We are on schedule. The good week for planting corn has the past idea that corn planting delays will lead to less corn acres planted and more beans is now gone from market conversations leaving traders thoughts back to the March 30th planted acreage report that showed 8 m.a. less beans will be planted. We broke through minor resistance on November futures at 7.72 today leaving a series of minor points of resistance at 7.88, 7.92 and 7.94 a close over 7.94 sets us up for a break out to 8.18. Near term as planting progresses we should stay under 8.18 but settle near a price market feels reflects the March 30th planted acreage report. About 7.94 to 8.10. Once we are 25% planted or more then weather if foul can push us through 8.18.

Wheat~

Monday's weekly inspection report showed 16.6 m.b. of wheat was inspected for near term export up from 14.4 the week prior but under a year ago of 24.3. Year to date inspections are 792 m.b. versus 898 a year ago. Another sign that demand for low quality old crop wheat is poor as importers await new crop availability through June. The crop progress report Monday showed 34% of our spring wheat crop is planted vs. 14 the week prior, 39 a year ago and 5 year average of 45%. 6% is emerged from the ground. North Dakota and Minnesota are furthest behind at 22% and 20%. Our winter wheat crop condition report showed 56% of the crop is in good to excellent condition up 2% from the week prior and 36% a year ago. States that declined we are soft winter wheat states delivered at the Chicago Board of Trade IL at 25% G-E down 7% and OH 36% down 1%. Key big hard red winter wheat delivered on the KC Exchange producer Kansas came in at 39% G-E up 5%. NE 55% up 4. TX 66% up 3 from the week prior. Traders are scratching their heads as daily reports out of the fields unveil horror stories about dead wheat yet the last two weekly updates suggests we are recovering. The bottom line is this: There was significant losses of yield in KS and parts of OK and NE that will show up with lower crop production numbers on future production reports. The wheat lost in the southern delta is too small of production to mean anything and wheat that was not froze out looks to recover nicely. This week's weather looks to improve that wheat further on next Monday's report. At some point we will get that loss of production surge but near term the market will trade each condition update it gets. Though spring wheat futures are still being planted to be delivered on the MN Exchange, with good weather through June and July it could end up being our best quantity and quality crop most sought after by US millers and foreign importers leaving us after an early planting low to seek a harvest demand rally as the Easter freeze left little high quality hard red and soft red winter wheat delivered in KC and CBT.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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