Linn Group Morning Corn Comment

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

Corn Update:  The corn market closed mixed with the Dec corn down over 2
cents but some of the back months unchanged.  The corn market seemed to take
a breather on Friday as we didn't see the volume or the volatility that we
saw on Thursday, but volume was still strong and open interest was up over
12,000 contracts.  Spreading was the most active element of Friday's market
as we start to see the funds roll from the Dec06 to Dec07 and the funds were
very active in the options market.  Funds bot app. 1,500 contracts and the
trade estimated that 12,000 contracts were rolled.  The big question into
next year will be the number of acres of corn planted and the deferred
contracts were a little lower early in the day on the anticipation of
greater seedings, but firmed later in the day by the spread activity.
Farmers seem ready to step up to the plate and plant more corn acres to meet
the demand for corn, but we won't now for sure until next spring.
Everything is just talk right now.  The profit taking we saw on Friday
wasn't unexpected after Thursday's run up saw increased farmer sales, but
some cash traders said they are still surprised that we haven't seen even
bigger farmer selling as corn has rallied into and through harvest.

eCBOT market closed 3 cents higher vs. Dec on pretty good volume after
opening unchanged Sunday night.  The corn market should be relatively calm
early this week as we see the funds continue to roll out of the Dec06 into
the deferred contracts and the market waits for the release of the Nov. USDA
production report to be released on Thursday before the opening.  Many
traders will have their eye on this report as different analysts lowered
their estimates last week and traders start to square their positions.  It
should be a pretty quiet week until the report is released unless there is
breaking news.  We have record fund length and the corn market has rallied
almost 60 cents in October and many feel that the users have missed out on
this rally waiting for a pull back that never happened.  Users are probably
most interested in the USDA report because a bullish report will probably
propel the corn market into new highs and require them to pay up and get
some coverage.  We should see the market open higher today, but I doubt we
will see the market extend unless we have big fund buying which you can
never predict.  Expect a pretty quiet week into Thursday morning, with
spread action dominating the market at least earlier this week.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ6                 345^2    3^0       346^4    340^0

ZCH7                359^4    2^4       361^0    354^4

ZCK7                367^4    3^4       368^4    361^6

ZCN7                373^2    3^6       373^4    367^0

Early Opening Calls: 2 to 3 cents higher

Top News

-- Trading in corn, soybeans and other agricultural futures and options rose
to a record 1,006,014 contracts on Nov 2 while open interest in corn rose to
a record 412,155 contracts.

-- A few light showers around the Corn Belt today otherwise dry the balance
of the week.  Temps warm.

-- China NGOIC latest corn estimate:  +1% over previous estimates, 1.9%
higher than last year:  142 mil tons

-- 6-10 day forecast shows above normal temps and precip

-- Volume was 293.9, with open interest up 12.8 to 1410.6

-- Outside markets:  metals lower, energies mixed, dollar higher against
most currencies

-- Corn Estimate Recaps:

            - Informa released 2007 acreage estimates: Corn  84.9 mil. acres
up 1.8 mil. acres from their last estimate and compares to 78.6 mil acres
planted last year.

            - Linn Group corn crop estimate:  Production = 10.876 bil
bushels, Yield = 153.08 bpa

            - FC Stone:  Production = 10.808 bil bushels, Yield = 152.1 bpa

            - Informa:  Production = 10.729 bil bushels, Yield = 151.0 bpa

Cash Markets:  Cash markets steady to firmer Friday.

CIF Corn up 1  .  Nov. +62 to +63, LH Nov. +62 to +64, Dec. +63 to +65, Jan.
+54 to +58, Feb. +54 to +57, March +54 to +57, Apr. +48 to +51.

River house bids steady to firmer  STL. up 2 at +10,  Havana up 3 at -9.Rail
markets steady firm  PNW trains FH Dec. +74, NS cent Il. +7, CN cent IL. +5.

NS Corn        Nov. +7   Dec. +9  JFM +9         Evansville  CSX  +8

TREND:

Volume dropped precipitously on Fri. Trade looking at much too much
volatility to play around. Longs tending to move through long corn
positions. Beans have more support with the "new" trade having more upside
potential than corn?

I come back to the partner that led the rally initially. Wheat demand should
return on weaker futures. Look for leadership in hard or spring wheat to be
the indication that the market is ready to extend again.

Look for a slow down in trade in front of the report but volume will remain
very busy as the index fund roll starts more in earnest next week.



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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