Alaron Grains and Oilseeds Comment

CHICAGO - Jul 11/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

IMPORTANT MESSAGE:

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Thursday's weekly export sales report showed 337 t.m.t. of corn was sold last week up 4% from the week prior but 5% under our four week average.   Key Asian sales were 290 t.m.t. vs. 350 the week prior.   It is a neutral demand number as 550 to 800 t.m.t. is needed to be bullish but Asian sales are decent and that is the majority of our yearly sales.   Friday's USDA monthly crop report put our ending stocks reserve for 2008 at 1.598 bullion bushels up from 1.433 the month prior and over the average pre-report trade guess of 1.514.   They put next year's 2009 ending stock at 833 million bushels vs. 673 the month prior and the average guess of 820 m.b.- but half the amount of this year.   This puts us right back where we were before the report and that is that we need perfect growing weather to not drive ending stocks even more dangerously lower.   It is all weather and it is impact on the growing season deep into August.   The government did cut expected yields again to 148.4 b.p.a. vs. 148.9 last month.   The big report will be the August 12^th crop report when final planted acres numbers come in.   Traders will be buying into that report, that week.   WXRISK.COM sees western grain belt high heat through next Thursday and dry conditions across the Midwest.   There is a suggestion of rain in the western grain belt next Friday.   If we come in Monday and they take the potential rain out and all looks dry, corn will add back weather premium.   If we see rain, December futures could pull back to 6.60.   A close on December technically under 7.00 sets up a test of 6.60 our long term support line.   A close over 7.50 is needed to turn near term technically bullish.   Now, turn the page.   The crop report is over; we are 30 days from the next one.   All eyes are on weather, Sunday night.

Thursday's weekly export sales report showed 66.4 t.m.t. of beans were sold last week off 86% from the week prior and 59% under our four week average.   China was in for nothing vs. 220 t.m.t. the week prior.   Needless to say, it is bearish but as we have seen for two months, we have one good week then a bad one as news flows positive then negative out of Argentina.   Long term demand will remain strong.   Friday's USDA crop report showed our 2008 ending stocks at 125 m.b. unchanged from last month and our 2009 ending stocks at 140 m.b. down from 175 the month prior and pre-report estimates of 139 m.b.   Like corn- beans too have no room for error in the July through August growing season.   November beans entered today with minor support at 15.60 and major support at 15.60 and major support at 15.15.   a close over 15.80 add to longs.

Thursday's weekly export sales report showed 617 t.m.t. of wheat was sold last week, just under the week prior but our second highest sales number since last October 18^th.   It is a bullish demand signal as millers and exporters chase badly needed supplies.   Demand will remain strong through our spring harvest.   Friday's crop report put all wheat production at 2.461 b.b vs. pre-report estimate of 2.478.   soft red wheat at 607 m.b. vs. last month's of 572.   Hard red winter wheat production at 1.040 b.b. vs. 1.030 last month.   Spring wheat production was 507 m.b. vs. 537 last month.   That was the surprise and will have traders watching spring wheat state weather closely now into late July and early August.   September Minneapolis spring wheat September futures have support today at 8.50.   a close under here and 8.10 is next stop.   We need a close over 8.90 to fill the gap to 9.25.   September C.B.T. wheat has support at 8.05 then 7.70.   Resistance is 8.70.

End.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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