Alaron Grains and Oilseeds Comment

CHICAGO - May 16/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's weekly export inspection report at 10:00a showed 37.5 million bushels of grain was inspected for near term export up from 34.7 the week prior and under a year ago of 44. Year to date inspections are 1.459 b.b. versus 1.325 a year ago. Not great, but good as prices were generally at the low of our last 6 weeks range. The key will be can we see gains in demand when prices are up? Monday's crop progress report at 3:00p showed 78% of our corn crop is now planted versus 83 a year ago and equal our five year average. We look to finish up this week. 39% is emerged from the ground. Weather and its impact on planting progress is behind us with weather and its impact on growing as our pricing source. Over a third of the crop is in need of timely rain weekly to achieve normal yields, while temperatures remain not too hot. The western corn belt of Iowa west, has ample soil moisture for good early emergence but Illinois east has been very dry for two weeks. We should get our first crop condition report next Monday. Buy dips and look for the market to build a weather premium in prices. December has major reversal support at 3.54 and July 3.48. December needs a close over 3.98 to turn chart bullish and July 3.92.

Beans-

Monday's weekly export inspection report showed 7.6 m.b. of beans were inspected for near term export down from 11.5 the week prior and equal a year ago. Year to date inspections are 948 m.b. versus 770 a year ago. The rally to 5 week highs did not help draw importers as well as heavy South American competing sales but domestic demand and a strong crush pace leaves us still using if not selling a lot of beans. Monday's crop progress report after the close showed 32% of the crop is now planted versus a year ago and 5 year average of 31%. 6% is emerged from the ground. Weather indications this week by wxrisk.com suggest planting days and delays will lead us to 62 to 73% planted by next Monday's update with 32% emerged from the ground. Next week we enter a true weather market as over a third of the crop will have emerged. This week we continue to see traders buy soft spots building a weather fear in that reflects the 8 million less acres planted and its effect on ending stocks. There is no margin for growing error. Continue to buy dips. November has support at 7.86 then 7.72 with first resistance at 8.14. A close over 8.14 is a break out.

Wheat-

Monday's weekly export inspection report showed 22.8 m.b. of wehat was inspected for near term export, up from 18.4 the week prior and 15 a year ago. Year to date inspections are 833 m.b. versus 925 a year ago. It helped to have us sitting Tuesday to Friday lows at 4 week lows and 48 cents below the 20 day high all encouraging g some demand, especially as wheat growers look to clean bins of old crop supplies as our new crop harvest nears in June. Our Monday crop progress report put spring wheat planting at 87% complete versus the five year average of 74% with 51% emerged from ground. Our first crop condition report of the year came out showing 79% of the crop in good to excellent condition and off to a great start. Last year's crop finished its crop condition rating ahead of harvest at 32% g-E after starting at 76%. So, time will tell now what Mother Nature has in store for our spring crop. The winter crop to come to harvest in June, showed 58% in G-E condition versus the three preceding weeks of 57, 56 and 54%. The Easter freeze disaster as many thought is slowly going away. Nebraska and Ohio still see a very show head development pace but number one wheat producer Kansas and hardest hit by the freeze saw a 31% jump in head emergence to 50% of the crop headed out. If next Monday shows a similar increase in heading in Nebraska and Ohio then a supply side rally is gone. Only demand then at harvest will bring us bullish consistency. July CBT wheat has support at 4.85 with July K.C. hard winter futures support at 4.75.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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