Linn Group Morning Corn Comment

CHICAGO - Aug 9/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  Corn futures sold off again yesterday, to 6-week lows, as we
saw the weather forecast for cooler temps and showers across of most of the
bean belt supportive of crop development.  We continue to preach that corn
is past the stage where weather is a major factor, but a veteran trader
reminded everybody this morning that last year the USDA was off almost 12
BPA last year in the August report last year compared to final figures.
This trader will assert that August weather is still important to corn and
not that the USDA was wrong in their August estimate.  Funds sold app. 5,000
contracts, not a big number, but still active as we saw strong volume in
both the eCBOT and the pit.  Some traders see small speculators liquidating
and some fund liquidation as we have seen open interest down over 30,000
contracts over the last 3 days.

ECBOT market was pretty quiet overnight closing basically unchanged on light
volume of only 4,200 contracts.  Traders this morning point to corn as an
oversold market that should see a s/t bounce off the sell off, and there
will be some position squaring over the next two days ahead of the crop
report to be released on Friday morning.  Traders this morning will start
looking toward the USDA report on Friday morning and will start to get their
positions ready for the report.  As one trader said this morning, with the
break we have seen so far this week, we should see corn trader sideways or
higher the next 2 days and even a bearish report on Friday will be hard
pressed to push the corn market much lower.  Remember, corn is a demand
market and as the price moves lower, we will see commercial accounts come in
to buy this market.



eCBOT Overnight
Contract            Last      Net Change       High      Low
ZCU6                236^0    0^2                   236^6    235^4
ZCZ6                 253^0    0^0                   253^6    252^4
ZCH7                267^2    0^0                   267^6    266^6
ZCK7                276^0    -0^2                  276^0    276^0

Opening Calls:

Top News
-- Energy markets traded higher overnight
-- Currency markets very volatile overnight but mixed against the dollar by
the opening this morning.
-- eCBOT markets settled little changed overnight
-- Brazil corn exports forecast to rise to 2.5 mln T from last year's 1.0
mln T on larger crop.  Analysts also note freight subsidies offered by the
Brazilian gov't are helping to raise export expectations.
-- 6-10 day forecast is normal temps, normal precip
-- Volume was 229.1(50.0 eCBOT), with open interest down 12.8 to 1366.2


Cash Markets

            Bn Barge           Corn Barge        SRW Barge       HRW Track
12Pro                      ILL RIV FRT
FAug    +32/36 X           +56/   U               +6/10 U          +70/  U
500
FSep    +40/44 X           +62/70 U              +18/24 U        +75/   U
525
Oct       +50/54 X           +58/60 Z              +25/28 Z        +73/81 Z
640

Truck                Beans   Corn                 Wheat   Meal Hi-pro
Oil
Chicago                       -30 X     -18 U              -58 U

Toledo              -17 U    -6 U                 -90 U
Dec ILL            -21 U    -14 U                             -6 Q
-200 Q

TREND:

The rebound that was expected after a lower opening never materialized. All
the markets are extremely oversold and due a bounce. Suspect we correct this
sell off prior to the Friday morning crop report. That means Wednesday and
Thursday will be sideways to higher trade.

Stronger hard red cash wheat markets should start to have more positive
effect on flat price trade. However it did not today.

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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