Alaron Grains and Oilseeds Comment

CHICAGO - Aug 19/08 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

CORN

-Weather is back on top-

Our first report of the week came on the demand side with our Monday Weekly Export Inspection Report showing 36.6 million bushels of corn was inspected for near term export. This is down from 39.2 the week prior, under a ywar ago of 43, but over our four week average of 33 mb. Well, of course the rally in corn last week turned demand a little softer, but the four week comparison shows 36.6 m.b. is still a decent demant pace. I see the number as friendly for demand near term. Monday's 3:00 PM Crop Progress and Condition Report showed 67% of our corn crops is in good to excellent condition. This is up 9% from a ywar ago, but unchanged from the week prior, after being up 5 of the last seven weeks.

It has hardly been noticed by the trade, that August has been pretty dry. After a hugely wet May and June, and a farily we July, our sub soil and top soil was adequatly wet to carry corn into August 10th. Now,   however, corn needs a drink to contunue to improve yields. Needless to say, if we stay dry through Autust, our September USDA Monthly Crop Report will cut yields and production. Current forcast by WXRISK.com sees .25 to 1.5 inches of rain over 60% of the midwest for Thursday and Friday. Who ever gets an inch or more is happy, but those under a half are in trouble. This is because the forcast predicts weather that is not only drier, but hot once again. Weather is moving to the forfront of pricing this week, but be careful as a hard sell off on any day by crude oil, metals, and a sharp dollar index rally and grains will sell hard on teh day. Thsi means stops cant be too close. December corn finds support Wednesday at 5.65. A close under says dont be long. if it 5.65 holds next resistance is 6.10, then 6.30.

BEANS

Monday's Weekly Export Inspection Report showed 4.4 m.b. of beans were inspected for near term export down from 11.4 the week prior, 10.3 a ywar ago and our four week average of 7.7 m.b. The sharp rally las tweek in prices curbed demand as predicted, but the number was lower than expected. It is clearly near term demand bearrish. But, demand will turn up after Septemeber 1, when the U.S. seasonaly becoems the worlds primary prot of origen for freshly harvested crop.

Mondays Crop Condition Report showed 62% of the crop is in G-E, down 1% from the week prior, and the frist weekly decline since ratins started 10 weeks ago. After pushing up the 70 limit on Monday as forcasts turned fairly dry this week, we saw 38 cent gains today in the first hour as weather reports released aheard of teh open suggest a possible heat dome for the next week. Drier and hotter than normal conditions through Auguysts end woud leave our Sepetmeber USDA Crop Reoprt update to cute yields, productions then ending stocks which are dangerously low. Monday and Tuesday saw very quiet outside markets, leavign grains to trade soley off its own weather thoughts. But watch out for Wednesdays grain open, as the crude oil inventory report comes out at the same tiem and any suprise there woudl have grains in town dorwn or up. The close on Nov. Monday over resistance sets up 13.60 as next resistance. Support is 12.35.

WHEAT

Monday's Weekly Export Inspection Report showed 36.2 m.b. of wheat whas inspected for near term export, up from 33.2 teh week prior, over our four week average of 26.7, but under a year ago of 46. This is a good demand signal, especially with the price surge last week.

No suprise here as millers look the fill needs and empty bins and warehouses as pre-harvest inventory was at 50 year lows. Strong demand will continue through our Spring wheat harvest, into September 1. Mondays Crop Condition Report showed 56% of our spring wheat crop in G-E condition, up 3% from the week prior, but 10% under a year ago. At least the two week slide is over. 35% is not harvested with dissapointing quality levels so far. We wont havest another crop until next Spring when the winter crop comes in. So, rationing is wheats goal. Demand remains strong and shrould continues to do so as millers, exporters and importers gather inventory share to fill empty bins and meet near term needs.

Untill we see how early winter wheat planting goes in September, wheats thoughts are on demend and a followers roll to corn and beans. September wheat finds support at 8.25 Wednesday and resistance up at 8.95.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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