Linn Group Morning Corn Comment

CHICAGO - Sep 15/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  Corn closed lower yesterday after we saw lower volume and
generally weaker markets.  As is the norm this time of year in the grains,
corn volume is starting to slow down and following whichever way it is lead
by the other markets.  Corn was higher early in the day on strength in beans
and then closed lower as we saw wheat sell off.  We are in the beginning of
harvest and many traders will wait until we start to see some yields before
they start trading again.  Big talk about the eCBOT trading more contracts
than the open outcry on Wednesday, but rumor on the floor was that there was
4 locals that accounted for 60% of the eCBOT volume that day and the
percentages were back to normal on Thursday.  Funds very quiet, selling only
700 contracts all day.  Some traders starting to talk about harvest delays
with the forecast for wet and cold into next week.  There is some talk of
frost in the northern areas, but this will have little affect on the corn
except to slow down the drying factor.  But, traders are reminded that there
is still plenty of time to harvest corn and we are going to have the 2nd
largest crop in history.

eCBOT market was pretty quiet overnight closing ¼ lower in the December.
Volume was bigger than Wednesday night, but not especially big.  Traders
this morning are looking for a sharply mixed opening (HaHa). Trade looking
at the impending harvest and are content to wait and see when corn is going
to make a bottom.  We continue to see commercial buying and producers
pricing their purchases into the future.  Deferred months continue to add
open interest, so we know that the funds are not going anywhere and our
commercial accounts are pricing their needs for the future.  Expect a choppy
trade today as the market tries to decide which way it is going to go today.
The path of least resistance is to the downside, but expect to find some
buying down below.


eCBOT Overnight
Contract            Last      Net Change       High      Low
ZCZ6                 237^0    -0^2                  237^6    236^0
ZCH7                250^6    -0^4                  251^6    250^4
ZCK7                259^0    -0^4                  259^4    259^0
ZCN7                266^0    -1^2                  267^2    266^0

Early Opening Calls:

Top News
-- Two former Secretaries of Agriculture  Glickman and Yeutter say Ethanol
production is growing so rapidly it may push up Corn prices  and squeeze
livestock producers.
-- Weekly Corn sales below trade estimates but year to date sales total  22%
of the USAD total sales estimate vs. the five year average for this date of
17%.
-- Cash markets continue to hold firm on almost all fronts as cash movement
is slow and early harvest is not filling the needs of the short bought
commercial.
-- Chinese Soybean, Meal and Oil futures closed lower, Corn steady to lower.
-- Ocean freight keeps firming with Gulf to Japan at $50.90  vs. $39.77 last
year. PNW to Japan $37.01 vs. $24.95 last year.
-- Funds Thursday Sold 4,300 Wheat, 700 Corn,. Bought 1,800 Soybeans, 1,000
Meal, 2,800 Oil.
-- Russian grain threshing through Sept 1 totals 50.5 mln T of grain, 15%
lower than year ago figures, reports the Russian Federal Stats service
-- 6-10 Day Forecast:  Below Normal Temps.   Normal to Above Precip. The
Corn Belt looks to be dry today and Saturday.  Showers and thunderstorms
will move across the belt Sunday and Monday. Temps cool early next week.
-- OPEC lowers demand for its crude production in 2007 by 200,000 bpd to
28.1 mln bpd, according to its Sept monthly report
-- 6-10 day forecast shows normal to below temps, above normal precip.
-- Volume was 123.4 with open interest down 1.7 to 1311.2
-- Outside Markets:  Metals down again, energies mixed, dollar up against
the currencies.

Cash Markets:

            Bn Barge           Corn Barge        SRW Barge       HRW Track
12Pro                      ILL RIV FRT
Sep      +67/70 X           +63/65 Z              +30/35 Z          +75/80 Z
550
Oct       +68/72 X           +63/67 Z              +40/43 Z          +78/85
Z                     610
Nov       +70/75 X           +63/67 Z              +40/45 Z          +78/87
Z                     510

Truck    Beans   Corn     Wheat   Meal Hi-pro        Oil
Chicago            -21 X    -32 Z    -75 Z
Toledo   -22 X    -22 Z    -89 Z
Dec ILL -10 X    +0 Z                +2 V                 -175 V


TREND:

Wheat continues to leak---worst kind of trade. Needs a catalyst for a
bottom?

Corn stable at the 2.40 level. This market is telling you it will not break
down. Look to cover and shorts including cash shorts on a break into new
lows. Buying CH 260 calls vs. selling 240 puts at even is a start.

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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