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LDP and harvest prices are hot topics

Corn Fundamentals: With wheats lead this week, add in strong weekly export
sales and chart based traders ability to find the strength to penetrate
this weeks stubborn 2490 technical resistance level, and that was enough to ask, are
the harvest seasonal lows in and raise questions about the ability to
secure LDP? Five of the most recent 8 years has found Dec corn futures at
least trading at the same level which Sept futures expired at. Even in the
fall of 2003, when projected global stocks to use were tight, Dec futures
did trade at the Sept expire price of 2270. Sept futures 2006 expired at
2234. Dec futures closed Friday at 2552.

Wet weather is expected to stall
harvest at least up to Tuesday, Wed of next week. Forecast are split for
next week if additional rain will only provide a small open window of
opportunity to resume harvest with any significance. As of this past
Monday, corn harvest was said to be 9% complete vs 10% five yr ave. Five
year history suggests the corn harvest advances to at least 18% by the last
Monday for the month of Sept. Lets see how the balance of the weekend
unfolds before submitting a harvest estimate in our 12:30 pm update on Mon.

Weekly Export Sales: as of the most recent official USDA export sales data,
537 mil bu of corn have been sold vs last years 332 mil bu (up 62%!) and
most recent three year ave level of 339 mil bu (up 58%). It is this
impressive front-loading of export demand which battles prospects of the
USA's second largest corn crop ever and is able to borrow the needed
support from the wet weather, causing harvest delays.

Corn Technicals: Dec futures close is 2552 vs last Friday's 2416, up 5.5%
for the week and up 2.9% for the month. Our key custom Moving Averages are
2480, 2450 (support) and uses a 2580 bear to bull pivot point. March
futures close is 2684 vs last Friday's 2554. Our key custom Moving Averages
are 2610, 2590 (support) and its 2680 bear to bull pivot point cleared
Thursday and Friday. We need to see a minimum of 2-3 consecutive closes
above the 2680 level to confirm the bears are giving the lead to the bulls.
July 2007 futures close is 2832 and its 50% retracement level is 2880.

Corn End Stocks to Use: Projected end stocks to use now at 10.2% vs 9.4% in
2003 for the domestic situation. Globally, a level of 11.5% vs 2003's 14.3%.
Projected world end stocks for 2006-07 are now 92 MMT vs 103 in 2003. You need
to travel back to 1983 to find smaller stocks of 89 MMT!

Cash Corn: It is the March-April time period when the National corn price
average more often than not finds its calendar year peak price dating back
to 1998. For the end user it is more often in the Oct-Nov time frame when
prices reach low levels to lock in long term needs.

LDP: Both the 6 and 7 year LDP average peak for corn has been Oct 11th
while soybeans finds its peak in a range of Oct 14th through the 27th.

The Immediate Trend is Up, change to sideways on a close Below 2490
As you are able to view, odds weigh on corn futures for next week based on
the most recent ten year historical values as well as the four week total.
Soybeans, soybean meal, CBOT and KCBT wheat, cattle and hogs HPT full
description can be found within our Historical Price Trend page.

Six to Ten Day Forecast: Warmer temps and dryer conditions working its way
into the west Corn Belt could suggest less bullish enthusiasm over the
thought of harvest delays. The 8-14 day forecast shows the dry, warmer
weather working well from the far west Corn Belt approaching the east
Corn Belt.

Five Year Ave Cash Price: the five year ave cash price for corn for the
month of Sept $2.13, month of Oct $2.05, month of Dec $2.11.

Trade Position: We are long Dec futures long based strictly on positive
technicals on Wednesday. We remain short March corn futures based on new
crop harvest seasonal tendencies, heavy old crop stocks and technicals
which at this point are non threatening. Allendale remains long term very
bullish from a yet to arrive projected Oct, July futures, low into a late
winter, early spring high based on our research in years when projected
global and stocks to use are uniquely tight.

Eggs Set-Chicks Placed: The single largest sector of protein meal use is
poultry at 50%, second are hogs at 25%. The largest sector of corn use is
beef cattle at near 34% and then poultry at a shade over 27%. The latest
weekly broiler report has eggs set up 1% above year ago same week levels
with chicks placed unchanged. Domestic demand remains strong.

Feed Needs: Please be certain to continue to check the updates on our Hedge
Advice page for feed purchasing recommendations. The potential bullish
"Island Bottom" formation which developed on Thursday is null and void
after futures crashed on Friday.

Soybean Fundamentals: Bullish for soybeans are two fold. An aggressive
beginning for the export sales marketing year and cool wet weather which
could delay crop maturity and frequent rain systems which could delay
harvest. As of last Monday the soybean harvest was 6% complete vs 5% five
yr ave. By the last Monday for the month of Sept, the five yr ave pace for
soybean harvest has been 14%. Gulf bids this week have not shown any signs
of lack of supply to meet present export demand. On the bearish side,
Brazil suggest new crop production will be closer to 52-55 MMT, equal to
the 2005 harvest and not the extreme low 50's as many investment funds had
anticipated. Argentina suggest over 41 MMT which would be a record and
could add if wheat acres are abandoned and rains arrive in time for month
of Nov plantings. Crude oil crashing, taking with it soybean oil, used for
soy diesel, and pressures soybean futures.

Export Sales: Only two weeks into the 2006-07 marketing year and sales of
soybeans to foreign buyers have reached 293 mil bu vs last years 168 mil bu
and three yr ave of 244 mil bu, up 20%.

Soybean Technicals: Nov futures close is 5492 vs last Friday's 5496, down
1.2% for the month. Our key custom Moving Averages are 5470, 5490 (key
support) and bear to bull pivot point at 6050. January futures close is
5622 vs last Friday's 5624, down 1.3% for the month. Our key custom MA's
are 5630, 5600 and bear to bull pivot point at 6130.

50-50 Odds: From the Sept USDA crop report to the January annual report,
odds are not nearly as impressive as corn over the past ten years. Odds
that soybean production could increase are only 50% whereas corn production
has increased from the Sept to Jan annual report 90% of the most recent ten
years.

Soybean End Stocks: 2005-06 end stocks of 485 mil bu, projected 2006-07 end
stocks of 530 mil bu. Prior to 2005, five yr ave end stocks of 200 mil bu.

Soybean End Stocks to Use: Projected domestic end stocks to use are now
17.4% vs 16.9% last year and 7.6% from 2000-2004 ave. Globally a level of
18.1% vs 19.3% last yr and 15.3% from 2000 to 2004 ave.

Five Year Ave Cash Price: The five year ave cash price for soybean for the
month of Sept $5.52, month of Oct $5.53, month of Dec $5.61.

Historical Peaks and Valleys: For Soybeans, research dating back to the
year 2000 has two time periods which could benefit the end user as a result
of harvest in North America and then S America. The research suggest cash
price lows concentrate in the Oct-Nov and Jan-Feb time frame. For soybean
producers the research suggest if you have to identify the one time period
when history has shown cash price highs it has been the month of August.

Trade Position: We have futures orders written to sell a corrective bounce
in the Jan and Nov soybeans. We do not have equal bullish enthusiasm for
soybeans that we do the corn and wheat. It will be of key importance to see
obvious acreage switching out of soybeans and into corn and wheat for 2007
harvest and very well may have to wait until late March to find soybeans
returning to 6250 to 6500 March futures levels.

Wheat Fundamentals: Since the Iraq wheat buying team arrived in the USA on
Monday, wheat prices rallied 26.5 cents. Wheat is setting up for a classic
case of "buying the rumor-sell the fact".

Export Sales Are Hurting: The floor trade was bulled up when weekly export
sales of wheat came in above their pre release expectations on Thursday. At
519.5 K tonnes, sales were a robust 54% above week ago values. Now for the
facts, we lost ground vs where we were a week ago. Before todays export
sales release, 2006-07 export sales were 22% behind last years pace. After
today's release we are now officially 23% behind. Sales thus far this year
are now 358 mil bu and they pale in comparison to the previous three yr
average of 489 mil bu or 26.7% lower! Our Midsession Comments states The
latest on Iraq suggest they may have already bought the wheat, 750 K tonnes
USA and 500 K tonnes from Canada and may make the announcement on Monday.
750 K tonnes is = to 27.5 mil bu. Add this the total for export sales thus
far this year and the level would be 386 mil bu vs year ago levels of 466
mil bu and three year ave of 488 mil bu. Compared to the three yr ave sales
would then only be 21% behind for 2006-07 vs present level of 26.7% behind.
Heavy Dependency of Wheat Exports: of the 1.801 bil bu of wheat production
in 2006, 900 million bu is marked for exports or 50%. When export sales are
starting as slow as they are this year, its creates the ability for
projected stocks to build in the background. Until the USA is able to land
more big ticket exports sales we may have to temper a portion of our
bullish enthusiasm. With this in mind look for July 2007 wheat futures to
possibly find its peak price in late March, very early April.

Odds from Sept to Jan: Odds have been 70% over the most recent ten years
that USDA lowers wheat production in the Jan annual crop production report
vs its Sept report.

Wheat Technicals: DECEMBER CBOT SRWW futures close is 4190 vs last Friday's
3924, up 6.8% for the week and down 1% for the month. Our key custom Moving
Averages are 4140, 4040 and 4090. DECEMBER KCBT HRWW futures close is 4814
vs last Friday's 4624. Up 4.1% for the week and down 2.2% for the month.
Our key custom Moving Averages are 4810, 4720 and 4770. DECEMBER MGEX
spring wheat futures close is 4610 vs last Friday's 4422. Up 4.1% for the
week and down 2.5% for the month. Our key custom Moving Averages are 4540,
4580 and 4590 (key support).

Historical Cash Peaks and Valleys: For wheat, research suggest cash price
peaks in two time periods of the calendar year. The first is the Oct-Dec
time frame and then again in April to month of May. Most obvious when
looking back to the year 2000, end users could benefit in the month of Jly.

Five Year Ave Cash Price: The five year ave cash price for SRWW for the
month of month of Sept $3.43, month of Oct $3.51, month of Dec
$3.51.

Allendale Lean Hogs: Hogs traded as best they could with Thursday's large
$2.20 drop in the pork cutout. Added to that pressure was the bearish Cold
Storage report. Near term this market is still in bearish mode. There has
not been any noticeable support on the charts yet. If seasonals are going
to be traded this year the time for a bottom of some type is now. The
charts are arguing against that with a bearish Head and Shoulders formation
suggesting an $61 objective on the October. Fundamentally we say weakness
for a few more days then rally into early October. On the charts the market
appears ready for further weakness. The way to play this one out is to buy
only on a close above $64.50.

Allendale Live Cattle: Cattle on Feed is bearish. Placements during August
were 15.4% higher than last year. That was larger than the average guess of
10.3% and our estimate of 4.8% larger. Our numbers were made with the
expectation of a large increase in lightweight calf placements and a drop
in moderate to heavy feeder placements. Somehow the industry found enough
feeders to place the same number as last August. The story remains the same
here. Dry weather since last fall is a concern. Cow/calf producers would
rather devote pastures and limited stockpiled forage for the cow herd and
are moving calves out of the field and to the sale barn. Placements in the
#1 state of Kansas were even with last year. That is likely due to rains
which hit that state helping pastures during August. Texas was up 19%,
Colorado was up 40%, Oklahoma up 33%, and Iowa up 33% as well. All other
states other than Arizona posted increases.

The key issue as we see it is
when these numbers hit the market. USDA breaks placements down into four
weight groups. The lightest weight group <600 lbs was up a huge 63% over
last August. Those numbers will hit in late April to early May. We look
steer and heifer slaughter through December to be only 1 to 2% higher.
Large slaughter increases should not happen until 2007. For the short term
cash cattle are trading $88.50 which is mostly steady with last week. This
can be viewed as a victory. Keep in mind choice beef has fallen $5.72 while
select was down $3.52. Though we could open lower on Monday due to the COF
report it is likely the CME trade would view the cash cattle action as a
victory for bulls. We are still bullish for a move into the end of the
year. It's simply a matter of looking for a trend change on the charts to
get bullish again.

Allendale is registered with the CFTC and NFA and is a member of the NIBA.
The bottom line is we are a regulated firm which can be extremely important
in this day and age.

Corn Fundamentals: With wheats lead this week, add in strong weekly export sales and chart based traders ability to find the strength to penetrate this weeks stubborn 2490 technical resistance level, and that was enough to ask, are the harvest seasonal lows in and raise questions about the ability to secure LDP? Five of the most recent 8 years has found Dec corn futures at least trading at the same level which Sept futures expired at. Even in the fall of 2003, when projected global stocks to use were tight, Dec futures did trade at the Sept expire price of 2270. Sept futures 2006 expired at 2234. Dec futures closed Friday at 2552.

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