Alaron Grains and Oilseeds Comment

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

Monday's weekly export inspection report showed 38.4 million bushels of corn was inspected for near term export, down from our year high number of 56.6 the week prior, four week average of 52.   A year ago of 46 m.b. year to date inspections are 676 m.b. vs.. 614 a year ago.   Whenever you a high like we had last week there is always a pull back and sales are softer the week before or week of a USDA report.   So, over all it is not a bad number.   Today the USDA monthly crop report out ahead of the opening put our carry over or ending stocks come the start of our new marketing year September 1, 2008.   At 1.797 b.b. down 100 m.b. from the month prior and the second consecutive monthly decline of 100 m.b. and under the average pre-report guess by 82 m.b.   They came to this number by raising export projections 100 m.b.   Total exports were 2.45 b.b. a new record export figure.   World stocks were cut 1.3 m.m.t. to 109.1 m.m.t.   No surprise here to change our long term bullish stance into spring.   The January report will be a big one as it will have our final 2007 production number and some significant changes in all the surrounding numbers.   The market should forget the numbers after today, and go back to a follower's roll to beans.   Corn needs to maintain a short distance to beans to insure beans.   Do not steal to many acres away for next spring's planting season.   If there is going to be any month end or year end correction, it has to be soon with about 14 trading days left.   Farmers are holding back on cash sales now until after January 1, to push tax liabilities into next year.   We came into today with March support at 4.12 and resistance at 4.24.   A close over 4.24 sets next resistance at 4.34.   Long term 4.85 is our conservative target before March deliveries begin.

Monday's weekly export inspection report showed 32.9 m.b. of beans were inspected for near term export, up from 26.7 the week prior, four week average of 25.7 but under a year ago of 36.5.   It is a good number, especially ahead of a monthly crop report but December is when China buys on fear over developing South American crops.   Tuesday's USDA crop report put our 2008 ending stocks at 185 m.b. down 25 m.b. from the month prior and 12 m.b. under pre-report trade guesses.   The lower stocks came on export projections raised 20 m.b. and the crush to get the meal and oil raised 5 m.b.   Long term it is a very bullish number.   If we were to plant 6 million more acres with current demand, ending stocks for 2009 would be under 100 m.b. or about a 120 day supply.   Beans see an urgent mission to continue to seek a price high enough to encourage 8 m.a. or more to return to bean planning this spring.   Weather alone could wipe out the advantage of 4 or 5 m.a. more seeded when one considers demand is on the rise.   Long term March could easily see 12.75.   Near term, watch out for month and year profit taking and cash grain sales after January 1, pressuring cash bids.   We came into today with support on march beans at 11.30 then 11.10.   Resistance is 11.65.

Monday's weekly export inspection report showed 26.5 m.b. were inspected for near term export up from 18 the week prior, our four week average of 19.7 and a year ago of 16.3.   Not a bad number ahead of a crop report and on top of a 20 cent plus rally last week on prices.   It could send a signal to the trade that all the talk of India coming into buy 300 to 500 t.m.t. of wheat on the world market, may hit home ports even though talk is demand will not be U.S. wheat.   Tuesday's USDA crop report put ending stocks for the start of the new 2008 marketing year June 1, at 280 m.b. down 32 m.b. from the month prior.16 m.b. under the average pre-report trade guess.   These are the lowest ending stocks in 60 years.   domestic use and exports all increased.   Wheat opened to higher but profit taking quickly came in pushing us 15 lower before rebounding mid-session.   All the demand is on the world market but Minneapolis spring wheat futures continue to be out gain the Kansas City and C.B.T. markets.   All the risk is on spring wheat futures on the Minneapolis Exchange as it is those acres to be seeded next spring that could be lost if they do not shadow beans higher.   Spring wheat is planted with beans.   Minneapolis March futures have support at 9.85.   C.B.T. March has support at 9.10 with resistance at 9.65.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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