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Bullish the soybean complex

For The Month: for the month of January, May corn futures value increased
8%, May soybean futures value increased 18.8% and July CBOT SRWW value
increased by 14.5%. By comparison, April crude oil futures value increased
by 11%.

For The Week: May corn futures closed up twenty one cents (+4%) per bushel
vs last Friday's closing price, May soybeans up ninety eight cents (+7%)
July CBOT wheat up fourteen cents (+1.4%), July KCBT wheat futures up
twenty five cents (equaling the previous week) (+23%) and July MGEX up
fifty cents (+3.8%)

Technicals: Old and New crop corn and soybeans and new crop wheat. For the
short term trader, Allendale uses its own unique custom Moving Averages to
monitor price momentum, define key support and resistance levels as well as
advise where key pivot points are located when bulls may turn bearish and
bears to turn bulls. We also include last weeks closing price for the
weekly chartist as we draw closer to the end of the week to anticipate the
possibility for futures to have a positive weekly close or if weakness is

Observation: be aware of how close the key short term Moving Averages are
for old crop corn futures. July CBOT closes below both short term Moving
Averages and now used as overhead resistance.

Historical Price Trends: best odds for the week of March 3, according to
our HPT page are for soybeans and cattle. Over the most recent ten years,
odds of 80% for higher soybean futures than were they closed on Friday.
Odds of 70% favor a higher close next Friday for Live Cattle than where
they closed this Friday. Please see the HPT page for the complete list.

March Weather: the 30 day outlook according to Drew Lerner of World Weather
Inc forecast below average temps for the major Midwest, above normal precip
for an already saturated eastern Corn Belt and normal to slightly above
normal precip in the west Corn Belt.

Soybean Fundamentals: funds buy crude oil as a hedge against energy
inflation. Funds buy soybean oil as a hedge against food inflation. Bullish
to soybeans is an active export pace for US soybean oil. Bearish to
soybeans is South America weather for good harvest conditions for Brazil,
good growing conditions for Argentina soybean pod fill. China announces it
will expand 2008 oilseed acres by 7%.

Cash: Allendale is not recommending to sell remaining 2007 soybean harvest
as this juncture and prefers to respect the long term trend in futures and
aware of the best odds when the national soybean price has historically
hits its peak cash price.

US Census Bureau: The Census Bureau suggest 160.28 million bushels of
soybeans were crushed vs pre release trade estimates of 159-163 million
bushels. The January crush compares to year earlier levels of 155.3 million
bushels and Dec 2007 levels of 162.4 million bushels. In order to meet
USDA's 2007/08 final soybean crush target of 1.83 billion bushels, the
January soybean crush had to be a minimum of 157 million bushels. Based on
the present cumulative crush data, USDA needs to increase it's marketing
year target by 15 million bushels, further reducing projected end stocks.

Trade Posture: Allendale is bullish to soybean, soybean meal and soybean
oil futures based on firm fundamentals and upward technical trend. As
outlined within our Grain Trading Strategies page, Allendale is willing to
buy soybeans and soybean oil on a technical correction.

Wheat Fundamentals: Bearish to wheat is Japan's absence from buying its
weekly wheat allotment, Egypt buying French wheat. Also bearish to wheat is
improving Australian weather for its forthcoming planting season and the
extremes in futures trade volatility. Bullish to wheat are less than ideal
winter wheat conditions within Texas, tight world stocks of wheat, corn and
rice. Bullish to wheat is grain export restrictions by Russia, Kazakhstan
and Argentina. There is 25% of the marketing year remaining for 2007/08 and
it is becoming more apparent of the trades willingness to transition from
old crop to new crop.

Cash: Allendale sold its last 50% of its 2007 wheat inventory on 2/12/08.

Trade Posture: Technically the trend is up. At immediate hand is the
investment funds understanding of decreasing old crop stocks, perception of
few if any signs of old crop economic export rationing. Longer term,
Allendale remains supportive to new crop wheat futures based on present
early crop condition reports. Allendale's Research does suggest odds are
against improving winter wheat conditions as they entered dormancy very
weak. We are willing buyers of new crop futures but on a healthy technical

Corn Fundamentals: Commercials are buying futures likely as an offset to
cash sales for foreign demand. Bullish to futures is the lack of world
competition to feed world demand. Bullish to new crop futures is the
increasing new crop soybean futures suggesting fewer corn acres to be
planted in 2008. Bearish to corn is nearly daily news of poor return on
investment for ethanol plants. Federal Reserve Chairman Ben Bernanke
suggest a way to reduce high food cost is to cut high import tariffs on
Brazil ethanol imports.

Cash: Allendale has not recommended to sell any of its 2007 corn harvest as
this juncture and prefers to respect the long term trend in futures and
aware of the best odds when the national corn price has historically hits
its peak cash price.

Trade Posture: Allendale is fundamentally neutral to old crop corn futures
as world end stocks remain tight along with sister starches of rice and
wheat is well known. For the short term are willing to buy corrective dips
based on a bullish short term technical trend. On Tuesday, Allendale bought
July corn futures. Long term Allendale remains bullish to old and new crop
given our outlook for reduced corn plantings in the spring of 2008.

Lean Hogs: The near term situation weakened this weak. Hog supplies are
still large and recent demand news has been a little weaker than expected.
Our current thought is $58 for a downside target in the April. On the
deferreds we continue to note they are overvalued by a good deal. Part of
the trade's enthusiasm is hopes on exports to remain strong and even get
stronger in 2008. So far the data does not support those hopes. Keep in
mind, as we have said before, there is a good chance those deferreds will
hold their premium to true value for some time before getting back to

Live Cattle: Cash cattle traded $1 higher at $93 as expected. Nebraska
traded $2 higher at $148. On the supply end we had another moderate week at
1% higher than last year. Later in the spring slaughters will push higher
and stay higher into most of the summer. For price direction we still
suggest a moderate cash cattle rally will be seen to $95/$96 then fall to
sub $90 levels in the summer. Earlier this week we had covered the pork
export situation. Wrapping up the weekend we can note favorable beef export
numbers for December. Overall exports were up 15% The previous three weeks
had been from 15% to 36% higher. No one buyer stood out enough for us to
make note of. Overall we still like the export picture but will note 2007
beef exports were 57% of 2003 levels. We project 2008 exports will be up 6%
and will be 60% of 2003 levels. We still think South Korea will expand its
beef buys this spring. We are not looking for any deal with Japan in the
next six months at least. Imports are still constrained with December
numbers down 14%. The previous three months ranged from no change to 23%
lower. Our biggest concern with CME pricing is with the June. We may have
to wait for the month of May or so but feel it will be $90 or sub-$90 near
its expiration. We are still not worried about downside on second half 2008

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

For The Month: for the month of January, May corn futures value increased 8%, May soybean futures value increased 18.8% and July CBOT SRWW value increased by 14.5%. By comparison, April crude oil futures value increased by 11%.

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