Alaron Grains and Oilseeds Comment

CHICAGO - Jun 6/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's reports began with our weekly export inspection report showing 37.2 million bushels of corn was inspected by the USDA for near term shipment. This was down from the week prior of 43.3 and a year ago 45.5. Year to date inspections are up 100 m.b. after hitting 3 week highs on prices last week importers backed off but it remains a neutral to friendly number. Monday's weekly crop condition report showed 78% of the crop is in good to excellent condition, unchanged from the week prior and over a year ago of 71%. These are national averages. Of the key producing Midwest states that produce 85% of corn fared worse. Illinois and Indian fell 2% from the week prior. Nebraska and Ohio fell 4%. Minnesota down 5 and Iowa down 1%. The excessive wetness in our western corn belt left quality ratings lower due to pooling and ponding of low areas while the eastern corn belt was too dry. The crop ratings overall are still very good with this very early stage of development having no effect on potential yields. Wxrisk.com sees only marginal rains in the dry eastern belt Friday and Saturday up to 50% coverage and .75 inch rain at best with many areas lower. Next week looks dry and possibly a heat dome. This late week rain could be the last for the next 12 to 14 days. This brought on fund buying Tuesday. December corn has support at 3.82 then 3.70 with next resistance at 4.04. Stay long.

Beans-

Monday's weekly export inspection report showed 5.4 m.b. of beans were inspected for near term export, off from 7.9 the week prior and 9.5 a year ago. Bean inspections are up 78 m.b. on the year. It is a decent demand signal considering we hit contract high prices last week. The crop progress report put planting at 88% with all major Midwest producers over 92% with 70% emerged from the ground. Our first crop condition report of the year showed 71% of the crop in G-E condition versus 70 a year ago. Nothing here to get excited about. fundamentally beans continue higher as the market seeks a price high enough to find 4 million acres more to plant for next year and Europe and Asia continue to see palm oil shortages leading to stronger soy bean oil demand and buying by funds. The bullish fundamentals remain constant, only the weather gives us variables to daily price changes. If wxrisk.com forecast is right through June 15th, the dry eastern grain belt will suffer further quality declines as only marginal rains are called for late week with drier conditions all of next week. November new crop futures have minor support at 8.46 and major support at 8.38. If the late week rains are as light as projected and next week ends up hot as well as dry, the 9.00 area will be tested. If late week rains fool the weather gurus and come in better than expected, look for a pull back to 8.38 to 8.46 area. Use it as a buying opportunity.

Wheat-

Monday's weekly export inspection report showed 15.9 m.b. of wheat was inspected for near term export, up from 14.1 the week prior but under a year ago of 18.9. It is a good number but not great. We are entering our demand season as importers come to buy the new crop winter harvest that begins this month. Long time US wheat buyer Egypt was in over the week end for 240 t.m.t. on the world market, buying the lions share from us at 180 t.m.t. Last year's crop was so poor we were a third or fourth port of origin to buy wheat from for human consumption while this year's bigger and better crop sets us up to be the primary port of purchase near term. The winter wheat crop condition report declined 3% in the G-E category to 54% but well over last year's disaster of 27% G-E. The condition report influence is over as harvest has begun in Texas at 10% complete, Oklahoma 3, and California 19%. Our spring wheat condition came in at 85% G-E versus 79 last week and 69 a year ago. Some say too much rain in the northern spring wheat states could hurt the wheat, but that is non-sense, as it is at its weed stage with no head and nothing can hurt it except drought. The rain is good for early development. Tight world stocks, crop problems in China, Russian and concerns in Australia have importers seeking high quality US milling wheat. December wheat in Chicago sees support at 5.40.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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