Alaron Grains and Oilseeds Comment

CHICAGO - Nov 16/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Friday at 7:30a Central Time, we got our weekly export sales report showing us how much of each grain was sold last week and becomes a strong demand price driving fundamental now that harvest is about complete for corn and beans. Leaving supply side fundamentals a side note.

Reminder: There is no corn and bean production numbers on our December U.S.D.A. Crop Report as they skip December until every bushel of harvest is counted and have our final number on production on the January report.

The export sales number was 1.363 million metric tons, down 9% from the week prior and 2% under a strong four week average. Our large export base Asian customers were in for 530 t.m.t. The overall number is a strong export demand signal. We would have to fall under 750 t.m.t. Weekly to turn negative. Well, our March 4.04 resistance held again this week. With no new highs in crude oil to drive corn based ethanol and no new highs in gold or silver; a new low in the dollar index all kept corn strength on the side lines. With the large index funds heavily long crude, metals and corn it is easy to understand why I keep telling you to use those outside markets as the lead to corn's daily price direction. As you know, at the beginning of this month, I said expect new crude and metals highs to pull corn to new highs on the month of 4.04. With potentially a late November and or early December sell off in crude and metals pulling corn down with it as large index funds balance year end positions. Look for those year end bonuses on profits taken. It is a theory to keep in the back of our heads but stay focused on crude, dollar index and metals first everyday and in that order of importance. Next week sees an early closing of grains Wednesday of 12:00 Central or one hour 15 minutes early. Closed Thursday for Thanksgiving Holiday, then another 12:00 closing Friday. Historically, grain trading would wind down on holiday week as the old agricultural trading fund managers headed for warm weather. The large index funds, money outside the country see the holiday shortened week as a reason to accelerate their trading possibly. This making next week one of our most volatile. Long term into spring I am still very bullish March and May corn. Near term a close under 3.90 basis March says do not be long. 3.90 is major near term support with 4.04 as resistance. If your trading elsewhere and do not have a full service account here at Alaron and would like to use me as your broker or manage your account: call me at 800-563-9510. Email: thannagan@alaron.com. No minimum account.

Beans-

Friday's weekly export sales report showed 1.3 m.m.t. of beans were sold last week vs.. 614 t.m.t. the week prior, double our four week average and a new marketing year high. This came as China was in for 916 t.m.t. vs.. 117 the week prior. We saw a big jump in bean prices Tuesday on the rumor China had been in for large totals not yet reported and this confirms the rumor was true. China has been buying beans to get the Neal for its expanding feed lot populations, soy oil for cooking and bio-diesel fuel industry and a hedge against any production problems that may occur in Brazil's growing season into March. Additionally, we are seeing some of the buying as build up ahead of their Chinese holiday when they pull out of the import market. Even though no new highs in crude and metals this week were seen, beans made new highs on this Chinese business. Next week's sales report will not be as bullish as this week but it will be good as the USDA made several announcement late week of new Chinese purchases so demand continues to be bullish. Long term in spring beans will out price all the grains in search of acres but near term it is still mainly in the influence of the index funds portfolio of crude oil, gold, silver and short the dollar index. Higher crude oil, expect higher beans. Lower crude then lower beans unless another demand burst of new surfaces allowing beans to trade it own thoughts. Beans made it to major resistance on all contracts. On October 1, we said 10.85 was a goal to be met as it was resistance into Monday this week with 10.90 Wednesday through Friday. We had an 11.03 high at mission today. We come in Monday and look to our outside markets first for direction. A close over 11.00 on Monday sets up a test of new highs. Limited as holiday closings near. Minor Support is 10.75. If support is broken, sell, as major support is 10.50.

Wheat-

Friday's weekly export slaes report showed 416 t.m.t. of wheat was sold last week prior of 14.6 t.m.t. and 4% under a weak four week average. Primary destinations were Asia. It is a neutral report at best on the week. Charts, charts, charts. The market is totally concentrated on the charts as apply side winter wheat fundamentals are on hold until March to May when dormancy breaks and the growing season begins. The trade tries to make early winter wheat emergence here an issue as conditions have declined with dryness in the southwest but we are in our weed stage and wheat is at its least vulnerable stage before late November dormancy sets in. four times we have come back up to chart resistance since our sell off from the October 1. March futures high of 9.60. Each time we hit resistance, funds add to shorts. I gave 7.90 as our price resistance for this week. We had a high of 7.93 Thursday, and 7.88 Friday and pushed 7.69 at mid-session today. On Monday, 7.85 is key resistance. If we do not take it out then our next goal of 7.35 is certain. If funds decide to bail out of shorts for the holiday then get out of shorts on a close over resistance as a break of resistance could take us to 8.35.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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