Alaron Grains and Oilseeds Comment

CHICAGO - Apr 8/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Monday's weekly export inspection report showed 48.5 million bushels of corn was inspected for near term export, up from 42.9 the week prior and 27 m.b. a year ago.   We are probably seeing some catch up business after a slower week last week when a lot of business was sidelined after the planted acreage report.   It is a good demand signal.   Wednesday's 7:30a Central Time USDA monthly crop report is expected to cut ending stocks again.   The average guess is 1.203 b.b. vs.. 1.438 the month prior and a range of 1.128 to 1.427 b.b.   Anything near or under the low end of estimates we open higher and near or above the high end we open lower.   Weather is a problem aging.   Wxrisk.com sees a major rain event across the entire Midwest and Southern Delta, keeping early field work and planting at a standstill.   Next week he says one model of weather prediction is warm and dry while the other is wet by mid-week.   They are leaning to the wet side on guesses for next week.   At some point the planting window will open leaving room for a pull back in corn prices but for now it is all about Wednesday's crop report effect.  

The Monday weekly export inspection report showed 12.2 m.b. of beans were inspected for near term export, off from 24.2 the week prior and 23 a year ago.   It is a bad number for the week but we are coming off prior weeks from 23 to 37 m.b. back to January 21st.   I suspect that with talk of strike settlements near in Argentina and Brazil's situation stable, importers await a better value especially after the 5 day 1.00 rally.   The trade awaits Wednesday's USDA monthly crop update.   The average pre-report trade guess is for ending stocks to be 157 m.b. vs.. 140 the month prior.   The range is from 120 to 180 m.b.   The ranges are wide leaving room for a surprise if on the high or low end of the range.   As I stated on the corn review planting is unable to begin in the Southern Delta as heavy rains abound again this week.   While next week's weather should become clearer to us by Thursday.   Bean planting delays in the south is not critical as 10% or less of feed grains are grown there.   While 90% of the crop is planted in the Midwest and not until May.

Monday's weekly export inspection report showed 23.9 m.b. of wheat was inspected for near term export, up from 16.7 the week prior and 14 a year ago.   Surprisingly good numbers.   As you know, we have a pattern of good week. bad week.     Either way, we are out of wheat so anything sold is a bullish demand signal as I have noted before.   We are seeing hand to mouth as needed sales with big export numbers to surface as harvest nears and begins.   Monday saw sharp declines in prices as forecasts for weather in the hard red winter wheat states for the first time this spring, turned wet for mid-week.   Some of our driest areas from Kansas south to Texas are expected to get rain.   Wednesday USDA crop report is expected to show an increase in ending stocks to 261 m.b. vs.. 242 last month but the range of estimates are wide from 237 to 282 m.b.   There is room for a surprise.   Monday's 3:00p crop condition report put our winter wheat crop at 45% in good to excellent condition vs.. 64% a year ago.   Key states read like this:   CO 32% G-E, KS 44, NE 53, OK 51 and TX 22% G-E.   This report is looking backwards as to what has happened since the crop went dormant last November.   Next Monday's report is looking forward and far more important as it tells us about wheat now.   This week's rain across the key producers look to improve quality on next week's report.   The weather related break is right on time as we are looking to get positioned long our call option strategy and buy the Kansas City July new crop futures near the 9.10 area if possible and bet on a drier May to June.

End.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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