Alaron Grains and Oilseeds Comment

CHICAGO - Jul 21/09 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Just a Reminder:

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First report of the week came with our 10:00a Weekly Export Inspection Report showing 36.8 million bushels of corn was inspected by the USDA for near term shipment off from 39.3 the week prior but over a year ago of 31.1 and four week average of 34 m.b.   It is right in the middle of a range of 30 to 39 that is friendly to demand, not Bullish, but friendly meaning it puts a floor under cash prices.   After the close on Monday at 3:00p we got our Weekly Crop Condition Report showing 71% of the crop is in good to excellent condition unchanged for the second consecutive week- over a year ago of 65 and 10 year average of 64%.   The extremely cool July leaves key yield development time now starting late next week through mid August.   If the weather turns hot and dry then a weather premium will be built in.   The current conditions could not be better but WXRISK.COM still sees a pattern possible developing that could turn the Midwest dry in August so be alert to a weather change as well as month end short covering.   December corn has a dream support area of 3.00 to 3.08 to buy if seen before month's end or buy on a close over 3.34 as that breaks the downtrend resistance line on the charts.   Theory remains as noted on Friday's report.   The near term third week of July potentially Bearish.   The fourth week look for a month's end short covering rally then a higher price in August as a weather premium is built in.   This applies to corn, beans and wheat.

Monday's Weekly Export Inspection Report showed 13.4 m.b. of beans were inspected for near term export up from the week prior of 11.1 a year ago of 7.3 and four week average of 12.7.   It is borderline Bullish but at least supportive to cash bids this week.   China was in for 4 m.b. of the total.   It helps demand to see more interest outside of wheat China brings.   The Crop Condition Report showed 67% of the crop is in good to excellent condition up from 66 the week prior, 61 a year ago, and a ten year average of 60%.   This is very good conditions but the key pod setting stage when yields are made or last does not set in until August 8^th or later and that is when weather really counts.   The technical have resistance for November at 9.60 with support at 9.00.   A close under 9.00 and 8.40 is possible.   If seen before month's end we will look at buying for a late month short covering rally and potential weather premium to enter as pods set in August.   A close over 9.25 minor resistances sets up a test of major resistance at 9.60.

Monday's Weekly Export Inspection Report show further selling of old crop lower quality wheat glutting warehouses at 18.9 m.b. vs. 9.8 the week prior and four week average of 11.2 m.b.   It helps support cash bids but we need to see 25 m.b. or more and that should come as interest on buying our new crop spring wheat next month.   The Monday Spring Wheat Crop Condition Report showed 73% of the crop is in g-E condition up from 71% last week, 63 a year ago and ten year average of 62%.   Historically this is about as high as any rating seen so it sets up a chance for a good demand surge when harvest begins late August.   The first support for December CBT Wheat is 5.56 then 5.40.   The September Minneapolis Spring Wheat Future Support lies at 6.00 then 5.84.   This area is a good point to enter long or on a close over 6.24.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

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