Alaron Grains and Oilseeds Comment

CHICAGO - Jul 4/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's weekly export inspection report showed 34.1 million bushels of corn was inspected for near term export, up from 30.6 the week prior but under a year ago of 41.2. The break in prices brought in some new business but the lofty prices have us under a year ago but it is domestic usage of corn to ethanol that offsets any negative export signals. Demand will continue to fluctuate with price swings, while domestic usage continues to rise into 2008. The crop condition report at 3:00p Monday, showed 73% of the crop is in good to excellent condition, unchanged from the week prior and over a year ago of 68%. Eastern belt states rose with recent rains with Illinois up 10% in the G-E category, Indiana up 6% and Missouri up 2% but the overly wet western states and northern tier offset eastern gains. With Iowa down 2%, Kansas off 1%, Michigan down 7% and Minnesota down 9%. With the increased acreage from last Friday's report corn has a negative mindset until we enter our key yield development time when yields are made or lost. By the end of next week, early planted corn will be at key yield time and our latest planted acres into month' end. Regardless of acres planted if we are dry from July 14th to August 5th, corn's trading higher and if wet lower.

Beans.

Monday's weekly export inspection report showed 7.1 m.b. of beans were inspected for near term export, down from 16.6 the week prior and 8.9 a year ago. High prices last week had demand pull back but the number is not bad for near 9.00 futures. With inventory more than ample for this year all attention is on weather and yields to determine next year's inventory which could end up at 200 m.b. with normal yields to under 100 m.b. or less with smaller yields this year. Monday's crop condition report showed 68% of the crop is in G-E condition up 2% from the week prior and 4% over a year ago. Like corn, beans saw the eastern belt states improve while western and northern declined. We are several week's ahead of our key yield development time so we will trade the weather and charts. November went right up to the 9.04 resistance on the daily bar charts before profit taking today as well as selling the improved quality condition and rain the next 48 hours over Iowa, Illinois, Indiana and Missouri. Totals look light but with the holiday, market closing Wednesday it was certain Tuesday would bring profit taking. Longs be careful as the contract highs Monday and a huge chart gap down to 8.48 a two weeks before our key pod setting stage sets up up for a connection near term. In the big picture, if we are hotter and drier than normal into August 10th, look for 9.65 basis November futures. If wet we could see 8.48. We come in Thursday and trade the next forecast for next week.

Wheat.

Monday's weekly export inspection report showed 22.1 m.b. of wheat was inspected for near term export, up from 15.9 the week prior and 15.6 a year ago. This is a good number and demand signal considering we saw contract high prices into late week but the Friday drop from contract highs as the US being the world's primary port for wheat now had foreign importers getting at least near term needs. Demand should remain good into early August. Monday's crop condition report for our spring wheat crop delivered on the Minneapolis Exchange showed 79% of the crop is in G-E condition, unchanged on the week and over a year ago of 52%. 61% is in the key yield head development time. States in worst shape are Montana, Washington and South Dakota to watch. Our winter wheat crop delivered on the Kansas City Exchange futures showed 48% in G-E condition unchanged on the week and up from a year ago 29%. 40% is now harvested. Number one wheat producer Kansas was 59% harvested and crop conditions jumped 5% in G-E from the week prior. Traders had thought the harvest progressing would uncover further problems from the Easter weekend freeze but this report suggest, maybe not. Nebraska was only 10% harvested. Weather for the next 7 days looks drier for the wheat states allowing harvest to move quicker. A close under 5.80 basis December CBT futures sets us up fro a move to 5.58. We need a close over 6.20 to turn back bullish technically.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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