Linn Group Morning Corn Comment

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

Corn Update:  The corn market went higher yesterday as we saw the funds and
commercials support this market once we got down against the gap level in
the Dec contact.  Funds were back today with more money to buy the corn
market after a couple of day of correction and many traders still consider
the leader of the grain complex.  The commercials led the market higher on
bull spreading as some traders feel the lower barge freight and firming
barge basis could take the delivery corn market to satisfy the cash needs at
the gulf.  The market saw the Dec/Dec07 spread move over 10 cents.  Funds
were net buyers of close to 5,000 contracts.  Tracking the funds is getting
harder and harder with much of that trade moving to the eCBOT platform as we
saw almost a 2x1 difference in eCBOT vs. pit yesterday in the Dec contract.
The bulls pointed to the Pioneer Seed company releasing more yield updates
on their website that are below expectations as another reason we saw corn
take off and almost trade limit up in the Dec.

eCBOT market closed almost 2 higher overnight on pretty good volume, but
probably a lot of spreading. The CBOT reported almost 45,000 spreads were
done yesterday on the eCBOT system.  News overnight is pretty quiet as we
saw So. Korea buy corn out of China at prices significantly lower than US
corn, but the real question is whether there will be more corn to buy from
China or is this it.  We continue to hear that China will not be exporting
corn.  Harvest is nearly over, so weather is not really a factor anymore.
It will be interesting this morning to see if we see more fund buying today
or if we see another set back allowing funds and commercials a chance to buy
corn lower.  Traders continue to watch the corn spreads for market
direction.  With corn prices up at these levels, trading flat price can be
very dangerous without deep pockets as we can see 20 cent moves either up or
down every day.  The funds will dictate which way the market goes everyday
as it seems we have a new story about an investment fund increasing their
commodity exposure or moving into commodities.  Corn is a demand market
today and you need to buy weakness because corn must purchase more acres to
keep up with ethanol, export, and feed demand.  Corn should open higher this
morning and it will be interesting to see if we get more fund buying come
into the market today on a higher opening or does the market sell off before
we see new buying.  It is getting hard to find anybody that wants to sell
the corn market.  Corn closed 4 cents off yesterday's highs and still 10
cents off the highs from last week.

Dec options expire on Tuesday and Dec corn above $3.60 has almost 100% of
the options worthless.

  eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ6                 359^4    1^6                   361^6    354^0

ZCH7                373^6    2^2                   375^4    368^0

ZCK7                377^4    2^6                   379^6    372^2

ZCN7                380^2    1^2                   382^0    375^0

Early Opening Calls: higher 1 to 2c

Top News

-- Exports: South Korea bought 55,000 mt. opt. org. Corn for July.

-- Ag Secretary Johanns said Tuesday that US Farmers will be able to meet
expected increases in Corn demand for the Ethanol industry plus keep up with
food and livestock feed needs. He said any fear that the Bush administration
has plans to kick acreage out of the CRP program to boost Corn production
are for now baseless. This was further confirmed by Rep. Collin Peterson who
will take over as chairman of the House Ag Committee.

-- A record in US Agriculture exports was achieved for FY2006.  Exports
totaled $68.7 bln vs $64.0 bln in imports.

-- Fund trade picked up on Tuesday. Funds reportedly bought 5,000 Corn.

-- Talk that Pioneer Seed company had posted more yield updates on their web
site that suggest Corn yields could be lower than the recent USDA estimates
helped rally Corn Tuesday.

-- Corn spreads: ADM 2,000 CN/CZ7, FCS 1,500 CZ/CH, Tenco 1,500 CZ/CH, UBS
500 CZ/CH, RJ 500 CZ/CH, ABN 500 CZ/CH, ADM

1,000 CH/CZ7, RJ 1,000 CH/CZ7, JPM 500 CH/CZ7

-- Chinese Corn, Soybean, Meal and Oil futures closed higher.

-- Volume was 367.2 with open interest down 1.3 to 1412.2

-- 6-10 day forecast shows above normal temps, normal to below precip

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

Cash Markets

-- CIF Corn  up 1 .  Nov. +63 to +65,  Dec. +65 to +67, Jan. +54 to +57,
Feb. +54 to +57, March +52 to +56, Apr. +47 to +51. May +47 to +51

Trend:

The corn market was unable to penetrate the 3.40 to 3.34 gap in Dec corn and
bounced off that chart level. The rally developed a lot of momentum this
time taking closes back to close to the recent highs. Much of the buying
came off spread trade as shown in the H/Z at the right.



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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