Alaron Grains and Oilseeds Comment

CHICAGO - Aug 3/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Thursday's weekly export sales report showed 806 t.m.t. of corn was sold for shipment prior the beginning of the new grain marketing year Sept. 1 for our new 2008 grain marketing year for a total of 1.776 m.m.t. Sales have been a little slow recent weeks but Asian markets that backed away earlier have moved back in. They probably see the two week stabilizing of prices as a near term low on cash bids and that has them filling near term needs. Several private crop forecasters have released their estimates for next Friday's USDA crop production report. They came in with slightly lower corn production numbers than the last USDA report in July. Their basis is that hot and dry conditions in the western grain belt and upper plains the last month cut yields. This should be the consensus opinion into harvest, that yields will be lower than government estimates. It should not have a bullish effect on corn prices as the massive 14 m.a. increase in planting offsets any marginal reduction. Additionally, old school traditional crop forecasters have yet to except that the bio-genetic sees yield far better results even in the hottest and driest of areas as seen the last two years. Corn, remains the tail of the dog. it is going to follow beans as beans move through its key yield pod setting stage through August 15 to 20th. If beans are up 8 then corn up 2 and beans down 10 corn down 4. It will trail behind. In the big picture, if hot dry weather cuts beans yields in August. Beans could rally a dollar pulling corn up no more than 35 cents. If beans see timely yield improving rains then December corn will push to 3.05 to 3.08 with November beans as low as 7.80 to 7.90. It is all about weather still with beans in the leader ship roll. go to my bean commentary for our near term weather.

Beans

Thursday's weekly export sales report showed 185 t.m.t. of beans were sold last week for near term shipment and a total of 440 t.m.t. added on sales for shipment after September 1. The beginning of our new grain marketing year. It is a neutral near term demand signal but key world buyer China, was in for 120 t.m.t. being a positive note. Okay, with beans in the middle of its key yield development time through August 15th to 20th, weather takes on a more heighten importance. Wrist.com sees three of the four major models of weather projections showing hot and dry conditions from today through Wednesday in the western and eastern grain belt states. With all rains on the Canadian Border and no farther south than Northern Minnesota, Wisconsin and North Dakota. The GFS or American model has rain of .50 to 2.00 inches with 70% coverage this week end through Wednesday. a big difference. Over the week end, the three hot and dry models will turn wet or the wet model dry setting us up for another wild Sunday night trading and Monday. If we come in Monday and it is hot and dry, we could push to 8.92 to 9.02 but if the American model is right and it is raining, we will open 15 to 22 lower.

Wheat

Thursday's weekly export sales report showed 1.741 m.m.t. of wheat was sold last week, down from a ten year high the week prior of 2.080 but still a very bullish near term demand signal. Same old story. With world growing problems in Australia, Canada, the Ukraine, most areas of Eastern Europe either too dry or too wet and world ending wheat stocks at 26 year lows, while the US is the sole port of origin in the world for fresh harvested wheat and quantity. We have to expect nervous foreign users of wheat to over buy here; until foreign producing ports show their ability to deliver. Because we are in a demand driven market now, the news of demand comes suddenly and at times, periods of no demand for days. This leaves us to focus on our charts for our positioning in the market. Stay long September CBT wheat and get out on a close under 6.30 and go short on a close under 6.30. a close under 6.30 will occur only if current prices have hit a level that keeps importers backing away.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

DISCLAIMER: The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.