Alaron Grains and Oilseeds Comment

CHICAGO - Jul 21/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Our weekly export sales report Thursday showed 669 t.m.t. of corn was sold last week, down 34% from the week prior and 27% under our four week average. Key Asian customers were in for 287 t.m.t. about 200 t.m.t. under what is needed. We are seeing more and more sales spread out from our 2007-2008 marketing year to 2008-09 where this report showed 498 t.m.t. were sold. The 2007-08 sales were neutral for demand but the 2008-09 sales added to it shows that demand is a long term mind set and then add domestic use. It is still bullish. Corn is nervous about Monday's open. Lost week corn traders went home with a forecast for a hot and dry week ahead yet, a change in the jet stream pulled rains into the Eastern grain belt enough to insure Monday's 3:00p crop condition report will raise quality ratings in IL, IN and OH. We did see rains in the Western grain belt leaving IA to improve but NE and Dakotas and MN my decline. Looking forward, the Western corn belt states look hot and dry through Tuesday for certain. Wednesday through Friday have a 30% chance of rain. The Eastern belt is dry through Tuesday with a 45% chance of rain Wednesday to Friday. This again, sets us up for a scary opening Monday. With only 20% of corn yield maturity left, rain next week over 60% of the Midwest would pull December futures down to not lower than 3.06. No rain, 3.60 is best case scenario.

Beans-

Thursday's weekly export sales report showed 181 t.m.t. of beans were sold last week, down 25% from the week prior and 23% under our four week average. No surprise as contract high prices were hit last week and foreign importers know harvest is only a coupled months away and potentially lower cash prices. Demand is okay, as we are seeing sales for our new marketing after September 1; as well but overall demand will not draw in buying. As I noted in my corn commentary, the Midwest grain belt is dry through Tuesday. Hot West but wxrisk.com sees a chance for cooler and wetter conditions by mid-week. Where corn has the last 20% of its yield development time left, beans have 85% of its yield development time left. This leaves weather and its impact on our pod setting stage makes for big ranges. Beans started off high today Friday, with gains of 8 to 10 cents before late morning weather updates adding rain possibilities for next week pulled us to down 10 at midsession. If 60% or more of our Midwest gets rain next week, we will break November futures support at 8.60 and fill the chart gap to 8.48. If we come in Monday and take the rain out, we can push to 9.02.

Wheat-

Thursday's weekly export sales report showed 767 t.m.t. of wheat was sold last week, down 35% from the week prior. 7% over our four week average. Demand remains strong as the US remains the sole world port of origin in the world to by fresh harvest, while foreign producers and export competitors struggle with poor weather conditions and questionable production, leaving foreign importers over buying US wheat for longer term coverage- incase others can not make their export goals. Our spring wheat crop is the big question mark as we are at key yield development time for another week with the Dakotas west to Montana and Minnesota looking hot and dry the next 6 to 7 days. There is only a 20% chance for moisture next week. The trade mindset is we could loose quality levels, which are currently good, and that is important to the Minneapolis Exchange Futures as our spring wheat is our highest protein wheat and generally stay home for domestic millers and US millers living off low US inventory can not look to Canadian supplies as they did last year, do to far less Canadian wheat acres and a broad drought area. If we come in Monday and see a 6 to 10 day upper plains hot and dry, forecast the September Minneapolis Futures Contract will break 6.32 resistance and push higher. If we see cooler and some rain we would see 6.08 quickly.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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