Alaron Grains and Oilseeds Comment

CHICAGO - Aug 1/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Our reports began with Monday's weekly export inspection report showing 36.7 million bushels of corn was inspected. This is for near term export, off from 37.4 the week prior and 44 m.b. a year ago. Not a good demand signal. With our corn crop 90% made, importers think lower cash bids are ahead. Monday's 3:00p crop progress and condition report came out showing 90% of our crop was in the silking stage. Leaving very little left to determine our yields. Our crop condition report showed 58% of our crop was in good to excellent condition down 4% from the week prior. While down for our fourth consecutive week and 2% over a year ago. Big losers week MI 26% G-E down 11%. MN 30% down 10. MO 58% down 4 and IA 60% G-E down 3% from the week prior. With over 14 million more acres planted this year, the market is not as concerned about weather's impact on yields now as there is margin for error but corn will follow beans up if beans rally as we are in their key yield time. Corn is the tail of the dog, the follower to beans in the coming weeks. December new crop futures have minor support at 3.32 and then 3.22 with resistance at 3.60.

BEANS

Monday's weekly export inspection report showed 7.5 m.b. of beans were inspected for near term export, up from 5 the week prior. However, under a year ago of 9. m.b. The weekly jump comes as we see some near term hedge buying incase weather cuts yields as our pod develops through August 15th. It is near term friendly. The 3:00p Monday crop condition report put 51% of the crop in the pod setting stage. We are at key yield development time now through August 15th. The condition report showed 58% of our beans in G-E condition down 3% from the week prior, off for our fourth consecutive week but over a year ago by 5%. Biggest losers were WI 51% G-E down 3%. MO 50% down 6. MN 38% down 10. MI 30% down 10 and IL off 5% but still a healthy 73% G-E. Wxrisk.com sees the wather like this: the Midwest looks generally hotter and drier than normal through Sunday. The only chance for a change comes on some rain being forecast for Saturday and Sunday for ND, MI, WI and some of the eastern grain belt. The change would be if this weak front expands south into IL and IN and farther west into IA and NE. If it holds up north, it leaves 90% of the grain belt dry. As of today, three of the major weather prediction models have the Midwest hot and dry through August 11th. The American model is suggesting a chance for rain next Tuesday and Wednesday. We will watch to see each day as to next week's probability of rain. On my last report Friday, I said if we dry this week, November futures would push to 8.68. We about there. by week's end if the trade feels next week too will come in hotter and drier we can push to 8.92 by Monday's close. A turn to wet and 8.40 to 8.32 will be tested. This is key yield time and the next three weeks will take us as high as it remains dry and hot or as low as it is wet. Trade the next forecast.

WHEAT

Monday's weekly export inspection report showed 17.1 m.b. were inspected for near term export. Down from our four week average of 15.2 and a year ago of 13.2 mb. It is a decent demand signal and shows interest is still there at these prices. I would have preferred a number over 22 m.b. Monday's weekly crop progress report put our winter wheat crop at 88% harvested and in high demand due to historically low world ending inventory. Our spring wheat crop condition report showed 68% of the crop is in G-E condition down 7% from the week prior, off for the fourth consecutive week. However, well over a year ago of 32% g-E condition. Poorest qualities came out of WA 29% and MT 42%. The key to this report is the harvest number at 10% complete. Just like when our winter crop harvest began, everyone came to buy and exports soared, it will be interesting to see if demand pounces on the spring harvest. As we remain the primary port in the world for wheat near term. On my Friday report I said watch out for fund profit taking before month end Tuesday. Monday saw 20 cent declines with 12 cent lower settlements and today saw 10 to 12 cent declines in our opening range satisfying the profit takers. We come in Wednesday, looking to demand for direction and a much lesser extent weather and the spring wheat crop. December CBT Futures have support at 6.44. A close under 6.44 is bearish. If support holds new contract highs are next.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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