Alaron Grains and Oilseeds Comment

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

Corn:

Tuesday started the week's reports due to government closings Monday. Our weekly export inspection report showed 42.1 million bushels of corn was inspected for near term export, down from 45.1 the week prior; and over a year ago of 40.1. Though lower on the week suggesting a near term slow down in demand, the overall number is still a solid demand signal. Because our crop is a record this year and ending stocks increasing the trade can sit and wait for better cash values to buy. Tuesday's crop condition report showed 63% of the crop is in good to excellent condition unchanged on the week and 2% over a year ago. Crop condition reports should be ignored now. 42% of the crop is harvested vs.. the five year average of 30%. Generally, yields are better than many growers thought after an extremely uneven growing season weather pattern. Bio-genetic seeds have proven again they love heat and need far less rain than traditional seeds. After falling over 50 cents the 8 days prior to Monday's low, we saw some short covering Tuesday and Wednesday as profitable short positions took profits ahead of Friday's 7:30a Central Time USDA monthly crop production report. Pre-report trade guesses have an average corn production estimate of 13.459 billion bushels vs.. the September report of 13.308 with a yield of 157.7 b.p.a. vs.. 155.8. Unless there is a bullish surprise we look to sell the report and look for March futures to push to 3.44 with worse case scenario on the downside of 3.30 at which point I will buy long and hold into next spring. Technicals turn bullish for March on a close over 3.69.

Beans

Tuesday's weekly export inspection report showed 17.9 m.b. of beans were inspected for near term export, up from 13.6 the week prior; but under a year ago of 26.2. The break has brought in buying especially from China. Because the market sees such a low carry over on ending stocks for next year, it creates a buying enthusiasm on breaks. Demand will remain a positive force into early February when Brazil's crop begins to come in and supply the world with another port to buy from. Tuesday's crop condition report showed 58% of the crop in G-E condition up 1% on the week and under a year ago of 62%. 94% is dropping its leaves with 50% harvested vs. the five year average of 45%. The market is ignoring these reports now and ago should you. Like corn, beans too broke hard last week with an 8 day, 80 cent break into Monday's low before profit taking Tuesday and Wednesday. Pre-report trade guesses have an average bean production number of 2.648 b.b. vs.. last month's 2.619 with a 41.9 b.p. A yield up from 41.4. Even though the average suggests bio-genetic seeds rule, if there is going to be a surprise on this report it could come to beans. Corn was fully mature before those late summer record rainfalls fell but beans were in its key pod setting stage and many think low lying lands under water lost those acres and the USDA could cut harvested acres projections and production and ending stocks. So be ready for anything. March beans have a gap between 10.02 and 10.12 that could be filled on a friendly report number but a number well over the average would send us back to test Monday low.

Wheat

Tuesday's weekly export inspection report showed 31.5 m.b. of wheat was inspected for near term export, down from 41.2 the week prior but over a year ago of 21. It is a decent number overall but a big drop on the week and suggests importers are going to be patient while price pressure is present. You know the story, last Tuesday we broke through minor support ending wheat's bull run and broke under major support Thursday giving us a 1 dollar plus break into Tuesday's low. Friday's report only gives us a change in domestic and world carry over or ending stocks and no production numbers. The trade expects lower ending stocks as the last month's weather in key producer country Australia was nothing short of disastrous for yields. A lower world ending stocks lends to continued US what demand lowering ending stocks here. If the report comes out as expected with a slightly lower ending stocks and we are still under major resistance on march futures of 9.00. We look to continue the technical downtrend to test 8.35 with worse case scenario of 7.75 to 8.00 eventually. A close over 9.00 ends the bearish technical pattern.

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.