Alaron Grains and Oilseeds Comment

CHICAGO - Sep 18/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

We started the week's reports with Monday's weekly export inspection report showing 30.8 million bushels of corn was inspected for near term export, down from 48.2 the week prior and 49 a year ago. A mild soft spot on demand as harvest is underway and importers hope lower cash bids await but they maybe disappointed if beans continue to rally pulling corn along. Monday's 3:00p crop condition report put corn at 63% in good to excellent condition up 2% from the week prior and 2% over a year ago. 64% of the crop is fully mature and harvest underway at 14% complete. Corn feels the weight of a record crop near term as seen on its marginal at best gains on the day. Yet long term, demand sees corn well into the four dollar area by spring. If beans continue its rally, corn will be close behind in a followers roll as seen recently but if beans pull back 25 or 30% of its recent rally, corn looks to soften quickly. In other words, corn wants to go lower on near term bearish supply side fundamentals yet, it needs to keep a premium along with corn to insure it maintains the acres it planted this year again next spring. Major support lies at 3.40 basis December futures 3.58 on March and 3.70 for May. It looks like a close on December above 3.53 is needed to turn chart bullish.

Beans

Monday's weekly export inspection report showed 10.9 m.b. of beans were inspected for near term export, up from 7.2 the week prior and equal a year ago. Very good demand signal off contract highs. Beans posted 18 cent gains at mid-session Monday on talk that the upper Midwest frost Saturday was more wide spread and damaging than expected. Depletion of the soy oil in the bean due to a frost or freeze shows up after harvest when the crush takes place but growers will look for beans that turns dark and those are the ones that could end up half their size. Monday's crop condition report showed 56% of the crop was in G-E condition, unchanged on the week but 5% under a year ago. 55% of the crop is dropping its leaves with 4% now harvested. The trade awaits news on yields. Tuesday saw a higher open for our eighth consecutive day before profit taking set in pushing us down 5 at mid-session. Long term, March futures see much higher prices as beans seek acres to plant but near term harvest risk lies ahead if support is broken. November support Wednesday lies at 9.58 and March at 9.70. A close under here sets up potentially another 20 to 25 cents lower. Stay long until support is broken.

Wheat

Monday's weekly export inspection report showed 29.6 m.b. were inspected for near term export, down from 31.9 the week prior but well over a year ago of 21 m.b. Year to date inspections are 371 m.b. vs.. 244 a year ago. Still good demand off contract highs until Canada and Australia begin to flood the market with their crops. Canada's underway, while dry conditions leading to a slow maturity has Australia's harvest not begin until After October 1. Monday saw wheat push 30 cents higher at the close as traders anticipated a bullish Australian wheat board estimate Tuesday. They got just that and some. The wheat board put the Australian crop at a dismal 15.5 m.t. vs.. 22 in June and well under the September 12. U.S.D.A. estimate of 21 m.t. Needless to say, this means more exports for the U.S. in the longer term reducing our ending stocks for 2008 further, but the Calvary is on the way with our new winter wheat crop now 14% planted. The big question is how many more acres will go to seed with these attractive prices. In a true bull market you never look to how high we can go but to where is our support. Once we close under support the trend ends. December CBT Wheat minor support lies at 8.50 then major support at 8.30

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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