Alaron Grains and Oilseeds Comment

CHICAGO - Jul 18/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Thursday's weekly export sales report showed 369 t.m.t. of corn was sold last week for old crop shipment before September 1^st, which is the beginning of the new marketing year.   This was up 9% from the week prior but well under a year ago of 669 t.m.t.   Key Asian business was 240 t.m.t. vs. 290 from the week prior.   Asian business, which accounts for 70% of our exportable feed grains, remains solid; but other outside the country sales remain generally weak after recent cash highs.   Not that cash prices are lower we should expect better sales than this report shows.   It is all about weather.   Last Friday, I gave support this week as 6.60 the target price if rain entered.   We came in Monday with weather gurus adding late week rain which came in and 6.60 was hit by Wednesday.   On my Tuesday report, I said a close under 6.60 next stop is 6.10, weather permitting.   Thursday gave us a close under 6.60 and if weather is good next week, 6.10 are certain.   WXRISK.COM sees generally warm conditions with some rain Tuesday through Thursday.   Here's the risk:   If we come in Monday and weather models flip over and move temperatures from the mid 80's to mid 90's and take the rain out, corn will open 20 to 25 higher.   If forecasts remain unchanged we open 5 to 8 lower and slowly grind to 6.10 early in the week.

Thursday's weekly export sales report showed 63 t.m.t. of beans were sold last week down 4& from the week prior.   42% under our four week average and 181 t.mt. a year ago.   China was in for a taken 56 t.m.t. but sales were bad as they awaited a vote in Argentina over soy bean export taxes.   Wednesday saw a dramatic surprise when the house voted to veto the tax in favor of the farmers.   This takes the threat of port strikes out and suggests grain, especially beans will now move briskly out of Argentina.   This does not help U.S. demand near term.   Last Friday I said if this week turns wet we could drop to our 15.30 support on November futures.   The wet came and 15.30 was hit Tuesday on Tuesday's report.   I said a close under 15.30 and 14.75 is next stop.   We closed under Thursday with lows of 14.81 into mid-session; the long term trend line from March crosses at 14.50 Monday.   If we come in Monday with rain in the forecast, 14.50 will be seen Monday and Tuesday time frame.   A flip in the forecast to warmer and drier and Monday's open could be 35 to 40 higher.

Thursday's weekly export sales report continued its five week bullish demand trend with 748 t.m.t. of wheat being sold last week up 21% from the week prior and 29 over our four week average.   Everyone wants wheat after empty bins last year.   Demand will remain strong through our spring wheat harvest yet to come.   However, demand is not driving wheat as the U.S. crop overall looks to take ending stocks this year from 300 m.b. to over 500 m.b. next year along with a world record crop, leaving no threat of running out of wheat.   Wheat continues to be a follower to corn.   A close under 8.75 basis September Minneapolis Exchange spring wheat futures and 8.50 is next support.   We need a close over 9.00 to urn charts up.   On the C.B.T. September soft red wheat futures contract, a close under 8.05 leaves 7.75 as next support.   We need a close over 8.40 to turn chart bullish.

End.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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