Alaron Grains and Oilseeds Comment

CHICAGO - Jun 10/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Monday's first report came with the weekly export inspection report showing 36.3 million bushels of corn was inspected for near term export by the USDA   This was down from 42 m.b. the week prior but over a year ago of 34 m.b.   It is a decent demand signal while the lower number from the week prior was expected ahead of Tuesday's USDA monthly crop report.       Importers always back off a little until report numbers give them marketing ideas.   Monday's 3:00p crop progress report showed 89% of the crop is emerged from the ground with 60% in good to excellent condition vs. 63% the week prior and 77% a year ago.   Key states read like this:   Illinois 48% g-E down 6% from the week prior.   Indiana 55% down 2.   Iowa 56% down 10%.   Missouri 55% down 2.   All off with the extremely wet conditions-   WXRISK.COM sees more rain in the western corn-belt Tuesday night through Wednesday of one to four inches then the eastern grain belt Thursday to Friday before a fairly dry weekend comes in.   Some weather models are suggesting next week will be hot and dry.   The crops would welcome a chance to dry out but a continued dry pattern creates a whole other problem.   Many believe the record wet spring will lead to a dry summer.   Tuesday's USDA crop report put ending stocks of corn come September 1, 2009 at 673 m.b. down from 763 last month and 1.433 b.b. this year.   The report makes the growing season even more bullish if we turn dry.   The next big report is the June 30^th planted acreage report when the trade will be expecting the USDA to lower the amount of corn acres that we are actually planted.   In today's action it was typical buy the rumor sell the fact.   After a new high open, traders took profits to the bank and look to come in Wednesday and go back to trading weather and its impact on the crop.   December has support at 6.70.

Monday's weekly export inspection report showed 3.9 m.b. of beans were inspected for near term export, down from 11.5 the week prior, and 12.2. a year ago.   Like corn, beans too saw importers backing off until Tuesday's USDA report is released giving them numbers for their marketing direction.   Monday's crop progress report showed of the crop is now planted vs. 69 last week with 56% emerged from the ground.   Our first crop condition report of the year came out showing 57% of the crop is in good to excellent condition vs. 70% a year ago.   The market will trade these rating changes aggressively now.   Tuesday's USDA crop report put ending stocks this year at 125 m.b. vs. 145 last month and ending stocks come September 1, 2009, at 175 m.b. vs. 185 last month.   Setting this year's growing season to potentially be very explosive to the upside if conditions turn dry.   To date we have been pricing in the planting season weather volality and that will continue until 90% is seeded and that should come by the end of next week.   This week's planting should not increase by more than 5% from Monday's report but next week is setting up drier.   The crop report on June 30^th will be interesting as the big question will be:   Did lost corn acres turn to beans planted later giving us more acres; or will the planting window close, and replanting of wet areas go unplanted?   No one will want to be short.   November beans find major support at 13.60.

Monday's weekly export inspection report 19.3 m.b. of wheat was inspected for near term export off from 21.9 the week prior but over our four week average of 17 and a year ago of 9.2 m.b.   The better demand outlook continues as early harvest is underway and millers and exporters with empty bins and warehouses fill needs.   Monday's winter wheat crop condition was left unchanged at 47% G-E condition with spring wheat condition at 63% g-E vs. 57 the week prior and 81% a year ago.   Spring wheat is off to a great start while I am suspicious about the winter ratings which never changed regardless of some swings in weather to very poor in Oklahoma and Texas as well as weather extremes in Kansas.   I would not be surprised to hear of weaker than expected quality as harvest progresses.   Tuesday's crop report gave us what was expected a big crop due to acres.   They put our winter crop at 1.817 b.b. vs. 1.778 last month.   They put ending stocks for June 1, 2009 at 487 m.b. up 4 m.b. from last month.   It all comes down to demand to pull wheat up.   C.B.T. September support is 8.00 then 7.60.   K.C. September support is 8.30 then 8.05 Minneapolis spring wheat September support lies at 8.70 then 8.40.   All the underlining fundamentals of supply remain bearish with demand side news turning bullish.   Buy breaks only.

End.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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