Alaron Grains and Oilseeds Comment

CHICAGO - Jun 3/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

We started our week's reports with the Monday weekly export inspection report showing 37.3 million bushels of corn was inspected for near term export off from 38.6 the week prior; and 39.1 a year ago.   It was over our four week average of 32.5.   It is a slightly friendly number but another that says demand is taking off.   After the close of trading our 3:00p Central Time crop progress report showed 95% of our corn crop is now planted.   The only state still lagging is Missouri at 83%.   The question is will growers plant the remaining four million acres or switch two or all to beans as planting after mid-May generally sees lower yields and with heavy rains in the Midwest from yesterday through Saturday?   Any planting will be difficult.   Most of the rain is in the western corn belt with Iowa and Nebraska 97% planted so little remains.   The eastern grain belt of Illinois at 92% planted and Indiana 88%.   There is room to finish if growers choose as rains look lighter after Saturday.   Fear is still the mindset and the fear is it will be too wet to totally finish corn planting to some extent.   WXRISK.COM sees heavy rain in the western corn-belt Thursday and Friday, with one to three inches over 80% of the area.   The eastern corn belt of Illinois east with one to four inches Friday through Saturday over 75% of the area.   The weekend looks hot all over with some suggestion it could be very hot next week, especially the first half.   If traders decide to grasp all the bullish issues we could be getting ready for another upward surge.   The positive issues are:   late planting and slow emergence due to a cold, wet late spring planting season will lead to the USDA lowering its projected yield.   Next, the probability that growers will plant less corn than expected, as the preferred planting window has closed.   There also maybe a switch in thinking that the call for high heat on the way; that the top sail will dry quickly leaving the shallow root system, due to a very wet planting season, to hurt emergence and of course there will be those who will say a cold, wet spring means a hot dry summer.   Mother Nature's average thinks things out.   Needless to say, everything says stay long.   Watch out for government intervention.   Government meetings underway to discuss what to do if anything about the large index fund trading and manipulation of the markets from grains to crude oil.   If decisions are made to restrict index trading we could see a knee jerk effect pulling grains down sharply.   Move profit stops up to under December's 6.30 minor support.

Monday's weekly export inspection report showed 9.8 m.b. of beans were inspected for near term export off from 12.9 the week prior, but over a year ago of 6.2.   The lower number came as importers backed off as the Argentine strike was to end Tuesday.   It does not mean farm groups will not extend it as we heard today they will into next week.   My opinion here is that the government will win and get their way on a farm of taxation on grain exports.   Reason- this is a long term deal for the government, as they know that income from a expanding agricultural community is their life blood for decades to come.   Farm groups will not go away quickly, leaving the strike on and off for several more weeks generally keeping U.S. exports better than usual.   Monday's crop progress report showed 69% of our bean crop is now planted vs. the five year average of 81%.   The trade had expected 75% seeded but growers continue to struggle to get their corn planted as beans can be planted up to June 10^th.   I do not see anything in the report unusual other than a lot of beans are going in later than expected.   Since the majority of the increased bean acres this year are going in the western grain belt of Iowa west and there the wettest through Monday, a slow pace will show up again on next Monday's report.   Like corn, beans too remain bullish on the low ending stocks and uncertainty that lies ahead in the growing season but I am pulling up my November profit stops to 13.35 Wednesday.   A close over 13.75 says add to longs with 14.10 the next resistance.

Monday's weekly export inspection report showed 21.4 m.b. of what was inspected for near term export, up from 15.5 the week prior, 16.8 a year ago, our four week average of 17.8.   No surprise as bins and warehouses are empty and everyone is rushing in to gather new crop supplies.   Demand will remain robust through mid-July.   After the close Monday, our crop condition report for our winter wheat crop shoed are usual 47% in good to excellent condition unchanged from the week prior.   Our spring wheat condition was 57% g-E up 5% from the week prior; but well under a year ago of 85%.   Weather in the upper plains spring wheat states look wet into Monday and warmer; this should improve conditions.   WE saw some short covering off last Thursday low but it was commercials and small speculators and not large funds.   For funds to cover shorts and get an extended rally we need a close on C.B.T. July corn over 8.10 which is next resistance.   Next resistance is for July K.C. wheat is 8.50 with September Minneapolis spring wheat at 9.10.

End.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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