Alaron Grains and Oilseeds Comment

CHICAGO - Sep 11/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Monday began with our weekly export inspection report showing 43.9 million bushels of corn was inspected for near term export up from 38.4 the week prior; but under a year ago of 49. demand remains consistently good as it should with prices 80 cents off our season high but it is how ethanol plants handle harvest production that will be interesting. Will they move in and buy all the cash corn they can to fill warehouses with inventory to meet the near and long term ethanol needs or will they take a note from livestock feeders and buy only as needed. With ethanol production set to increase here in the U.S. each year into 2012, we might assume ethanol producers will load up especially with the mindset prices need to stay high enough to insure we do not loose acres to other crops in need of acres like beans and wheat. The average pre-report trade guess for corn with 20 major trading firms polled is a record 13.128 billion bushels. Up from last month's U.S.D.A. report of 13.054 b.b. The report comes out Wednesday at 7:30a central time. Expect Tuesday to see choppy two sided trade as traders get positioned and even up ahead of the report. Watch out for Wednesday report, as even though the average guess is slightly higher, the range of estimates are wide. We could have a very bullish or bearish crop number. December futures resistance is 3.50 with support at 3.30 then 3.18.

Beans-

Monday's weekly export inspection report showed 5.8 m.b. of beans were inspected for near term export, down from 13.3 the week prior and 10.3 a year ago. Our one dollar rally since August 20th has had some impact on demand especially with early harvest beginning this week and supplies looking ample in our immediate near term but these numbers are not bearish either. With dryness in South America and bean planting beginning there, we could be set up fro a situation similar to what we have in wheat. Where production problems around the world has demand at our door step. We could end up seeing purchases here for future shipment if weather there continues day. We are near the top of a four week rally that comes to a pivot point off Wednesday's crop report. If the report is bullish, a push to new contract highs are certain but a bearish report could set in motion profit taking and selling if harvest yields come in higher than expected. Wednesday's numbers will be heavily weighted for near term direction. The average pre-report threaded guess is 2.650 b.b. vs.. last month's report of 2.2626. The thing to watch is the carry over stocks number for 2008 which last month was pegged at 220 m.b. vs.. 575 this year. Pre-report estimates are as low as 100 m.b. to 3.20. A surprise at the high or low end of the range would send beans soaring or collapsing on the open. Support on November lies and 9.04 Tuesday. Stay long until we break support.

Wheat-

Monday's weekly export inspection report showed 28.8 m.b. were inspected for near term export down from 38 the week prior but well over a year ago of 10.4 m.b. Though off on the week it is still a solid demand signal but to some it is looked at as a signal demand is finally slowing. Today's strength came as Australia looks to remain dry, as their wheat crop continues to suffer at key yield time. Harvest seasonally begins the last week of September through October. It is weather influence that is limited to another 15 or 20 days. Wednesday's crop report has traders looking at our domestic 2008 carry over or ending stocks and world ending stocks. Last month's U.S. 2008 ending stocks were put at 404 m.b. Some think, recent explosive demand will being it in sharply lower. World stocks were put at 114.8 m.m.t. a 27 year low and could come in much lower due to a dry August in Canada and Australia. No one expects a bearish report. Wheat remains bullish until other foreign crops come on line shortly or support is broken.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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