Alaron Grains and Oilseeds Comment

CHICAGO - Oct 5/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Thursday's weekly export sales report showed 1.150 m.m.t. of corn was sold last week 32% under the week prior but anything over 1 m.m.t. is a good demand signal. Our primary customers in Asia purchased 700 t.m.t. of the total, thanks to the U.S. dollar value vs.. exchange rates favoring buying U.S. grain. Next week demand fundamentals take a back seat to supply side fundamentals as Friday, October 12th at 7:30a we get our next look at this year's harvest production as the USDA monthly crop production report comes out. Most private crop-casters look for an increase in production over the September report as harvest yields have generally come in over expectations. We are harvesting a monster crop and corn enjoyed the best of summer's growing season weather. Corn's only hope for any strength next week would come from potentially firmer bean trade as some forecasters are calling for a bullish bean number. Without a bean influence, March corn looks poised for a test of 3.44. 3.73 is major resistance.

Beans

Thursday's weekly export sales report showed 666 t.m.t. of beans were sold last week off 11% from the week prior with China in for 270 t.m.t. It is a friendly demand signal considering it came off contract high prices. Tuesday's 47 cent break broke March beans through minor and major support leaving the charts looking weak. We are certainly poised for further profit taking off contract highs last week. We have several issues next week that may put a floor under beans. One, Brazil continues to plant their new crop in very dry conditions with next week looking dry as well. The market has not been willing to jump on this yet as we are at early planting stages and they probably need 75% planted before dry weather becomes a pricing issue. Two, though corn yields are coming in higher, there is talk circling that there is areas of concern and lower than expected early yield results in bean fields Central and Southern Illinois, Indiana, North-East Nebraska and Iowa. This could lead to some pre-report trade guesses of a lower production number next Friday, without a bullish mindset into next Friday's report. We would expect 9.58 near term to be tested basis March futures. A bullish mindset developing and a lower report number, we could push back to 10.10.

Wheat

Thursday's weekly export sales report showed 1.598 m.m.t. of wheat was sold last week. Up 6% from the week prior and 10% over our four week average. It is obviously bullish as we hit historic high prices last week and demand strengthened. With world stocks at 30 year lows and Australia's crop a confirmed disaster and too late for rain to save, the world has no choice but to continue to turn to U.S. Ports for near term needs. All the the world's bad production news is over for now. Argentina and Brazil will not plant their new crops until next April. Australia will try again to grow some wheat next May with China's spring crop going to seed in March and the European Union areas plant winter wheat now. Our crop is going to seed now, so we will not harvest it until next spring. The world's stuck buying right here and only price determines the size of purchases. If today's export sales number from last week are any indicator of near term demand, then we are still bullish from a demand perspective. The large index funds are 90% technical and 10% says the worst of production problems are over. We close under chart support, a selling pattern on the charts could take March wheat back to 7.75 to 8.00 area. We closed under minor support Tuesday and major support Thursday. Unless something enters, that is not there, charts suggest there is further room to adjust to the downside. March finds next support at 8.75 then 8.35. We need a close over 9.50 next week to turn chart bullish. Traders do expect wheat's carryover on ending stocks number to come in lower next Friday.

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.