Alaron Grains and Oilseeds Comment

CHICAGO - Jul 25/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday's weekly export inspection report showed 35.7 million bushels of corn was inspected by the USDA for near term shipment. Down from 42.5 the week prior and 51 m.b. a year ago. With the rain last week and talk of more this week, importers see last week's price weakness extending this week leaving them with thoughts of buying needs cheaper later. The crop progress and condition report came out after the close Monday showing 78% of our corn crop is at key yield development. 62% was in good to excellent condition down 2% from the week prior. Traders had expected an increase after last week's rains in the Midwest, but small producers had big declines such as MI down 9%, MN down 10 and WI off 17%. This offset increases in major producers like IL up 2, IN up 5, NE up 1 and IA unchanged. The lower ratings still led to light buying with closes Tuesday up 1.4 cents and all eyes turning to weather. As of Tuesday afternoon's close the weather models were mixed with some having lots of rain in the driest of western grain belt states and our dry upper plains and other models had it much drier with 50% coverage .25 to .75 inch Thursday into Friday. It will take until Wednesday to get a better look. With timely rain through August, we could expect December corn to visit 3.00 to 3.05 and hot and dry through August no higher than 3.70.

B e a n s-

Monday's weekly export inspection report showed 3.3 m.b. of beans were inspected for near term export, down from 10.4 the week prior and 12 a year ago. Like corn, beans too look to the importers as seeing further cash weakness after last weeks and this week's rain increase the talk of potentially higher yields than the previous dry period had us fearing. Their backing off a little hoping for better value later. The crop progress report showed 30% of our crop setting the pod with 70% of our key yield time ahead through August 15th. 61% was in G-E condition down 1% from the week prior and 54% a year ago. The bottom line is weather in the Midwest through August 15th will either cut appreciably the crop size or push us to higher than expected yields or something in between but it is all weather for beans. The Thursday and Friday rain event is still to be determined. If the rains come through light we could move to 8.68 quickly and if heavier than expected look for a quick move to 8.26. With timely rain and moderate temperatures through August 15th, we could see November Futures push to 7.80 to 7.94 area. Of course if we have twenty five percent or less our normal moisture during that period, 10 dollar beans could be hit. Stay focused on one forecast at a time for the week.

W h e a t-

Monday's weekly export inspection report showed 19.2 mb. of wheat was inspected for near term export, up from 13.8 the week prior and 18 a year ago. The better demand continues as importers rush to buy US wheat as foreign exporters that compete for world exports with the US. Continue to have production fills. Australia cut their crop again while Canada continues to see broadened drought areas. Monday crop progress report put our winter wheat crop at 81% harvest. Our spring wheat crop condition report showed 75% of the crop was in G-E condition down 1% from the week prior but well over a year ago of 34%. The trade shrugged the report off and went straight to focusing on our extraordinary demand pushing wheat up 20 cents at all exchanged. With 98% completely head developed, an early harvest has begun at 2% complete. The market believes there will be a rush to purchase freshly harvested spring wheat as foreign importers contract buy for future delivery as a hedge against foreign production problems. This is wheat they did as the winter crop became available. World market inventory is a historically low levels and we have quantity. This looks to keep US Ports busy. Watch out, month end nears and if you made a thousand somebody made a million as the old saying goes- and this sets us up for a potential profit taking break especially as large funds take profit taking break especially as large funds take profits and pay month end bonuses on profits taken.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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