Alaron Grains and Oilseeds Comment

CHICAGO - Jul 31/09 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Just a Reminder:

Please join me for my live online Grain Review this Wednesday at 2:00p Central Time.  If you are not a client and would like a 2 week trial, please call:   800-542-1022 or  click here.

Thursday's Weekly Export Sales Report showed total old and new marketing year corn sales at 1.2 m.m.t. with key Asian customers in for 651 t.m.t. of the total.   It is not a Bullish number but a friendly number as ending stocks come the beginning of the new marketing year are estimated at 1.7 b.b.   No threat of running out but the good Asian business shows the world needs as well as we are at value on our price.   The soy bean exports were put at 953 t.m.t. old and new combined with 708 t.m.t. for new crop shipment while China was in for 460 t.m.t. of the total.   It is a pretty friendly number to pricing as it shows a continuation of china's long term demand and that other countries see the U.S. price at value.  

Wheat sales were 575 t.m.t. up 68% from the week prior with most sales to third world ports more interested in quantity at value over quality.   By late August, when there is potentially high protein quality spring wheat crop comes to harvest, we could see demand push sales over 800 t.m.t. weekly.   Back on my July 17^th report I laid out a three step template on how the grains will trade during the third week of July, during the last week and then the period of August 1^st through August 25^th.   The plan is on track.   We called for the month's lows to surface the third week.   As funds finish off selling the good weather in the early growing season.   Corn and wheat did make new lows on the month with beans falling to ten cents from their low.   We said this week- the last week of the month would go to seeing trend following funds buying out of short positions that were profitable by buying the dips.   We saw this short covering Monday through Friday as any and all Bearish news or lower openings became a reason for funds to buy back shorts and go to the bank.   As I noted last week' funds see this as a profit taking business and benefit from taking profits before the month's end and pay bonuses.   We said this short covering even if off dips would leave this coming Friday's closes higher than last Friday and again this came to be.

Now two steps down and one to go:   This is the third step of our template and that is the August 1^st through the 25^th Rally to occur off further short covering and light speculative long buying ahead of the August 12^th USDA Monthly Crop Report that gives our final planted acres and we should expect a mild weather premium rally.   This was our thoughts from the July 17^th Report.   Does Step Three still look possible?   I believe yes.   The August 12^th Report is a week from next Wednesday.   On Monday we will price in the weather as we always do.   Currently WXRISK.COM the weather site sees a cooler start with rain Wednesday to Thursday with some potential to see the dreaded southwest heat dome move into the Midwest grain belt by August 7^th to the 9^th or late week.   This should give us lower open, but no big breaks and use it as a buying opportunity.

Next Wednesday again should leave us in grains vulnerable to weakness off another Bearish Crude Oil Inventory Report that is released when the grain open but like I said this past week, next week too should see a higher close on Friday from this Friday.   Funds will cover shorts on breaks while speculators will begin to get positioned long late next week as we near the August 12^th Report.   The fear that will get shorts to cover and bring in buying ahead of the report is that the USDA will cut both corn and bean acres.   When the June 30^th Planted Acres Report was released us still had 3% of the corn and 7% of the beans unplanted?   Fear is some of the unplanted acres never went in as farmers took the insurance.  

The December corn finds support at 3.30 with resistance at the gap area of 3.54 to 3.58.   A close over 3.58 and 3.74 is next stop.  

The November beans find support at 9.08 but a 50% retracing of this week's rally to 9.40 is more reasonable.   Resistance is 10.00 then 10.30.  

The December wheat support is still 5.40 with resistance at 5.50 then 5.64.

The September Minneapolis Spring Wheat Futures find support at 5.84 and resistance 6.26 then 6.40.

For those who do not have a full service account here at PFG/Best, and would like to use me as your broker, please call:

Tim Hannagan

800-563-9510

thannagan@alaron.com

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In

no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the author(s) that you will profit or that losses can or will be

limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained

from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in

this report.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material

presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. and/or STAT

Publishing or its staff and/or management.