Alaron Grains and Oilseeds Comment

CHICAGO - Nov 9/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Thursday's weekly export sales report showed 1.505 m.m.t. of corn was sold last week up from 635 t.m.t. the week prior and 5% under our strong four week average. Sales to key Asian customers were 600 t.m.t. vs.. 300 t.m.t. the week prior. As I noted on last Thursday's weak number, that we should expect a strong number this week as Asia tends to back off on purchases about every 4 or 5 weeks and a soft week would be an abortion. Demand remains strong and will continue into spring as China keeps more corn home for expanding feed lots leaving the U.S. to fill the hole on Asian neighbors of China's needs. Friday's U.S.D.A. crop report put corn production at 13.168 billion bushels, down 93 million bushels from the average pre-report trade guess, 150 m.b. under last month's report and 2.633 b.b. over a year ago. Ending stocks for September 1.2008 were put at 1.897 b.b. off 35 m.b. from the average guess and 100 m.b. under the October's report. The numbers were too small of a change to trade and the market shrugged them off. We come in Monday with the market looking at crude oil, dollar index, and metals in that order for direction. A week dollar index and strong crude is bullish while the reverse is bearish. Last Friday I called for March to push to major resistance of 4.04. We hit 4.07. If crude's strengthens next week, pushing $100. or better, March corn could push to not higher than 4.22. Failure of crude to rally and a higher dollar index and march corn will test not lower than 3.88.

Beans:

Thursday's weekly export sales report showed 614 t.m.t. of beans were sold last week down 17%, from the week prior. 2% under our four week average. Key world player China was in for 117 t.m.t. vs.. 280 the week prior as rains in South American beans fields had them cut their hedge buying of U.S. beans. The number overall is good even though lower on the week. China tends to overbook U.S. beans through December until they get a better feel on Brazil's crop. If Brazil's crop looks good by mid-January, China will begin to cancel previous U.S. buys for future shipments and await cheaper beans out of Brazil when their late February through April harvest begins. Friday's USDA crop report put production at 2.594 b.b. down 12 m.b. from the pre-report trade guess, 4 m.b. under the October report and 594 m.b. below the year prior. Carry over or ending stocks come September 1, 2008 were put at 210 m.b. down 3 m.b. from the average guess and 5 m.b. below the October report. Like corn, the bean numbers too, were too small of changes to get excited over but certainly confirms our bullish long term psychology. Least Friday I said look for higher crude to pull beans up this week, but not higher than 10.85 basis march. We came close with 10.67 at mission. We come in Monday and look to crude oil, dollar index and metals for direction. Higher crude, march pushes 10.85. Crude over $100. leaves March beans to push through resistance. Lower crude and high dollar index and March beans could push down to 10.40 quickly.

Wheat:

No surprise here that Thursday's weekly export sales report was a marketing year low 14 t.m.t. vs.. 180 the week prior and 98% under our four week average. Importers who panic purchased at and over 9.00 wheat, now sit back and buy only as needed and average down their cost with the thinking, with Mother Nature's cooperation when winter wheat breaks dormancy next spring. A hefty increase in domestic and world winter acres that prices will be far more favorable, Friday's USDA crop report had no production numbers but did address ending stocks. They put world ending stocks at 109.8 m.m.t. up from 107 last month and domestic ending stocks for June 1, 2008 at 312 m.b. up 18 m.b. from the average guess and 5 m.b. over the October report. the common theme in the market ahead of the report was all stocks would come in slightly lower, so when everything came in higher and with Thursday, closing prices under chart support it set in heavy selling on the open. March resistance is up at 8.00 through Wednesday, then 7.96 Thursday and Friday. Next downside objective and support is 7.35.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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