Alaron Grains and Oilseeds Comment

CHICAGO - Apr 13/07 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn:

Thursday's weekly export sales report showed 1.325 m.m.t. of corn was sold last week up 73% from the four week average and 814 t.m.t. a year ago. Asia, our usual customers were in for 460 t.m.t. but it was drought last year in Mexico that had them in again for 403 t.m.t. They have been our bonus buyer this year. WXRISK.COM sees early next week in the key Midwest corn and bean states from Nebraska east to Ohio with normal to below normal temperatures and generally dry conditions into Wednesday with showers Friday the 20th. The below normal temperatures are some concern as even if top soil conditions dry enough to get heavy planting machines in the field, growers say the ground is too cold for seed to sprout if planted. We need to get consistently back into the 60 degree daily area. April is setting up to be the coolest on record in the Midwest. Some planting looks to begin by Wednesday. Longer term he sees another potentially wet system entering by Sunday the 22nd through the 27th. So, the planting window could close again quickly further pushing planting dates out to areas farmers do not prefer. This all has traders thinking next week's planting pace maybe slower than needed and this has brought back some buying of corn and selling of beans as a spread.

Bean:

Thursday's weekly export sales report showed the seasonal slow down in beans is on as South American crops flood the market leaving sales here last week at 137 t.m.t. off 47% from the week prior, 64% under our four week average and below a year ago of 194 t.m.t. Key buyer China was in for a token 15 t.m.t. For the record, the seasonal slow down in US exports goes to about May 25th when South American sales wind down. Brazil does not store grain, it goes from field to shipping port in Mercedes Benz trucks where prices are generally set at a price no worst than $6. a ton under any US posted price. Brazil can not risk losing sales to the US as lack of storage would leave it in the field or piling up in mounds at ports. In the near term planting will not begin in a big way for two weeks and this leaves beans to function as the short side of the long corn. Short bean spreads traders are putting on as corn planting int he Midwest falls further behind due to our too cool and wet conditions. WXRISK.COM sees Midwest rain next Thursday and Friday and again Sunday the 22nd to the 27th. This would leave only four or five days from now to make any progress on corn or early beans. 7-76 remains support for November beans.

Wheat:

Thursday's weekly export sales report showed 693 t.m.t. of wheat was sold last week up 67% from the four week average and a year ago of 212 t.m.t. Asia was in for 144 and a unknown 161. What is happening is harvest of our new winter crop is 5 to 7 weeks away and bins with low quality feed wheat is being cleared out at a discount to third world countries more concerned about quantity over quality. This past week's weather was less than desirable and should lead to another decline in crop condition ratings on Monday's 3:00p central time crop condition and progress report. The freeze in the western plains winter wheat states last weekend led to lower ratings on last Monday's report. Kansas declined a whopping 22% in the good to excellent category from the week prior. Oklahoma and Colorado down 1%, Nebraska down 3%, with Illinois and Indiana down 7%. These were pretty wide ranges of declines considering the wide spread frost and freeze coverage. Truth be told, no one knows how much, to what extent or if any permanent damage actually occurred. Wheat's a funny plant. After a bad weather event, a freeze or frost when the head with kernels are forming it could take 2 weeks or longer before you can see actual damage to the crop. So these numbers thrown out by the USDA crop condition report may end up not as bad as appear or end up worse. The weather was bad so they had to throw in lower ratings and will again on Monday. Stay long wheat for now- as we await confirmation of extent of damage.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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