Linn Group Morning Corn Comment

CHICAGO - Aug 8/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  Corn market yesterday felt the pressure from an improved
weather forecast and better rains across the Midwest over the weekend.  I
keep saying that weather has little to do with the corn market anymore, but
with beans down significantly and the hot weather coming out of the
forecast, grains are going to go lower, as long as the crop is still in the
ground.  Traders point to a corn crop that is probably already good across
the Midwest as a whole and only getting better with the rains over the
weekend, with the rain having little to no affect on the bad areas.  Trade
will now begin to look at corn approaching major support levels and the USDA
report that will be released on Friday before the opening.

ECBOT market was pretty quiet overnight as we saw volume of only app. 7,000
contracts as the market declined further on an improved weather forecast and
the corn market following the sell off the beans.  Traders looked at the
better crop condition report as about what they expected as the West got
worse, the East got better, but the East got better than the West got worse.
Many traders look at the West as about as bad as it is going to get, but the
East still has the potential to get better over coming weeks.  Crop
estimates continue to beat the USDA estimate from last month as traders
constantly are reviewing their yield estimates.  Traders have a long memory
and will remember last year when they were fooled into thinking the corn
market was worse than it was and the market bottomed, hard late in the
growing season after the combines started running.  Some talk of China
importing corn, but probably not enough to make a difference.  Exports have
been quiet this week so traders will start to look at the report released
Thursday morning.  With a lack of any news, corn will continue to drift
lower following beans, but technicians say that corn is approaching major
support.  Interestingly, one veteran technician said this morning that if
corn does not take out June lows in August, we should take out June highs.
Well, we are approaching June lows, so if we don't take those out, keep an
eye on the corn market.  Remember, even though corn is going lower, this is
a demand market.

Opening Calls:  1-3 lower

eCBOT Overnight
Contract            Last      Net Change       High      Low
ZCU6                237^0    -2^6                  239^4    237^0
ZCZ6                 254^4    -2^4                  257^0    254^0
ZCH7                268^4    -2^6                  270^4    268^0
ZCK7                279^0    -1^2                  279^0    279^0

Top News:

--Deliveries:  Soybeans 1,343  thru 8/7/06  Term stopped  49    Oil  75  no
stopper Meal  524 thru  8/7/06  Bunge stopped  390
--The USDA progress report shows Corn rated 57% good to excellent vs. 56%
last week and 52% last year.  Dough stage 44% vs. 42% last year and 36%
average.
--Trade sources in China say has resumed Corn exports but the quantities
will be small as the government will no longer provide subsidies.
-- Gold trading lower overnight off $5, Crude oil off 40 cents, dollar is
mixed, weaker against the Yen, stronger against the Euro.
-- Allendale issued crop yield at 149, corn production at 11.112 bil. bu.
-- 6-10 day forecast shows normal to above temps, normal precip
-- Volume was 192.6(40.4 eCBOT) with open interest down 5.0 to 1378.9

Cash Markets
-- CIF Corn up 1.  FH Aug. +55 to +57, LH Aug. +57 to +60,  Sept. +61 to
+72,LH  Sept. +65 to +70,Oct. +57 to +??, Nov. +56 to +??, Dec. +56 to +60,
Jan. +46 to +48.

TREND:

Corn value is only pennies away. Look to be a buyer scale down for the next
3 to 5 cents. We look to take extended coverage all the way through next
summer on this break. With eastern corn values discounted pretty sharply,
prefer taking the ownership in the cash. Current bids may present a 60 cent
carry Oct to Jan. Find a way to take advantage of it.

If you have any questions or want to discuss specific trade recommendations,
contact me directly.

Jim Riley
Linn Group
877-787-6278
jriley@linngroup.com
www.linngroup.com/

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