Linn Group Morning Corn Comment

CHICAGO - Oct 6/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  The corn market set back on Thursday in profit taking from the
fund boosted rally on Wednesday which was a 2 year high.  Traders also said
that we saw some seasonal pressure as we come into a good harvest weekend
and our biggest harvest weekend of this season.  Volume was huge on
Thursday, approaching the record daily volume that we saw last spring.
Funds were net sellers of app. 9,000 contracts as you saw some profit taking
and some traders covering the bear spreads.  Wheat has been the leader in
the grain market and bear spreads have been the talk of the trading floor
and spilled over to the corn market as we saw some liquidation of the corn
bear spreads and corn/bean spreads as well.  Keep your eye on the deferred
month corn as well as the front month.  There was some very big option trade
as well as we saw one firm doing almost 25,000 options alone.  Weather will
continue to be a factor as we see drier weather in the central and western
Midwest as very conducive to harvest, but the Eastern belt still trying to
dry out.

eCBOT market overnight was pretty quiet overnight as we saw the market close
unchanged on a 3 cent range and volume of 10,000 contracts.  The big story
this morning will be whether or not we see more spread liquidation in the
wheat and corn this morning.  We saw huge liquidation in the wheat bear
spreads the last 2 days and it spilled over into the corn bear spreads and
that dominated the action.  Rumor mill has a large FCM having to do more of
this liquidation today.  No new news otherwise as we see the demand for corn
leading the market higher and harvest of possibly the 2nd largest crop
keeping a lid on prices.  The counter seasonal rally has really taken a toll
on traders in the grains as nobody saw it coming and the spreads were set up
the wrong way.  We have seen a very volatile and big volume week and that
usually leads to blow out tops or bottoms at least short term on the charts.
It will be interesting to see if the funds are around today to buy the corn
market and really dress it up so the week looks good.


eCBOT Overnight
Contract            Last      Net Change       High      Low
ZCZ6                 271^6    0^0                   272^6    269^6
ZCH7                283^0    -0^2                  284^4    281^4
ZCK7                292^0    1^0                   292^0    286^2
ZCN7                299^0    0^6                   299^0    296^0

Early Opening Calls: mixed to easier

Top News
-- Funds trade a mixed bag Thursday. Funds  Sold 8,500 Corn, 1,000 Wheat.
Bought 6,000 Soybeans, 3,600 Meal, 2,000 Oil.
-- Preliminary report shows Corn open interest off 12,662 contracts
Thursday.
-- Corn Belt is looking at the biggest harvest weekend of the season, but an
analyst notes it's difficult to tell it's harvest by looking at the cash
markets. Mike Hall points out that bean and corn processors paying pushes,
rather unusual for the second week of October.
-- Argentina has received some helpful rains this week but more is needed.
Australia has only scattered showers in the forecast when what they need is
a good general rain.
-- The CBOT raised hedge margins on Corn to $500 from $450.
-- US Sept Non Farm Payrolls: +51,000 ; expected +120,000
-- Corn spreads: JPM 1,100 CH/CZ, Rose CZ7/CZ, FCS 600 CZ/CH, UBS 600 CH/CZ.

-- 6-10 day forecast shows below normal temps and below precip
-- Volume was 330.6 with open interest down12.7 to 1284.1
-- Outside markets:  dollar much stronger against all currencies, metals
lower, energies mixed.

Cash Markets  CIF Corn off  1-2  . Oct. +54 to +58, LH Oct. +56 to +59,
Nov. +60 to +62, Dec. +63 to +67, Jan. +54 to +58, March +54 to +58.

TREND:

Dynamic action today with rather poor closes---may set the highs in corn and
wheat for a while. The bean complex still has shorts that at least partially
offset the record crop coming. May be a while before the spread trade gets
back to normal---or traders are willing to trade them again but the Z/H
spreads in both corn and wheat got too tight today. Time for the hedger that
sold the carries to roll the shorts back to the Dec contract.

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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.