Linn Group Morning Corn Comment

CHICAGO - Dec 8/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  The corn market closed higher yesterday on supportive news on
exports (surprise, surprise) and a recovery from the large break the market
had on Wednesday.  Year to date export sales are 1.023 bil vs. last year of
762 mil, very impressive and only expected to get bigger the rest of the
year and next year.  Volume was pretty light compared to the last couple of
months, but funds were buyers of app. 4,000 contracts.  Traders on the floor
said that funds pushed the market higher at the end of the day, but it was
also a lack of selling that helped the market.  The weather in So. America
is supposed to be drier the next 5 days, but they have plenty of soil
moisture.  It seems like the break we had on Wednesday made US corn cheap
enough for exporters as we saw So. Korea buying 440,000 of optional origin
corn in anticipation of higher corn prices in the future.  The grain market
should be pretty quiet on Friday as the market awaits the USDA report to be
released on Monday morning before the opening.

eCBOT market was a little lower overnight with the March closing down 2 ½ on
pretty light volume.  As expected, we didn’t see any follow through
overnight after traders said the rally yesterday was on light volume.  It
seems like the corn market has turned from a buy, buy, buy market to sell
the rally, buy the sell off.  The lack of news will probably stall any
attempt to rally the corn market and the anticipation of lower stocks will
support any attempt to really sell the market.  Today’s trade should be
sideways as the market waits for the USDA report that will be released on
Monday morning before the opening.  Volume has been light the last week or
so, possibly beginning our holiday markets a little early this year, not
surprising since the last couple of months have been fast and frantic.  We
should see a lower opening this morning and I would expect to see a mostly
sideways trade today, but it seems like the funds dress up the end of the
week prices to make their positions look a little better.  With the lighter
volume we have been seeing, it might be easier to dress up their positions
this week than weeks past.

 eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ6                 355^0    -3^4                  359^0    354^6

ZCH7                370^0    -2^4                  373^4    368^4

ZCK7                375^2    -2^6                  379^0    374^4

ZCN7                379^6    -3^0                  383^0    378^6

Early Opening Calls: 1-2 lower

Top News

-- Export News: Taiwan passed on a tender for 60,000 mt. US Corn for
Dec/Jan.; expected retender next week

-- Coceral Co.:  EU total corn production:  -10.6% from '05 to 42.98 mil
tons-- Officials at China’s Jilian Grain Bureau say even though the
government has sold close to 2.7 mmt. of Wheat out of state stocks there are
no plans to sell Corn as stocks are  not plentiful.

-- The Argentine Grain Exchange estimates 81.6% of the Corn crop is planted
vs. 84% a year ago at this time.

-- Weekly Corn export sales, at 32 mil.bu, came in on the low side of trade
estimates. YTD corn sales are 1.023 bil.bu. vs. 762 mil.bu. sold on this
date last year.

-- JP Morgan commodity outlook suggests Ag & Metal prices will remain
bullish into 2007 on tight supply outlook & good market demand.

-- Fund came back to the buy side in Corn Thursday buying 4,000 contracts.--
Deliveries: Corn 979 no stopper.-- Corn spreads: IA 300 CH/CZ, Fimat 200
CH/CZ, Term 200 CN/CH, Man 200 CH/CN -- Chinese Corn, Soybean and Meal
futures closed higher, Oil lower.

-- Volume was 167.4, with open interest up .258 to 1376.9

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

-- Outside markets:  metals are mixed, energies are higher, dollar is lower
against major currencies.

Cash Markets

-- CIF Corn up 2.  Dec. +42 to +45, LH Dec. +45 to +47, Jan. +50 to +53,
Feb. +50 to +55, March +50 to +53, Apr. +45 to +46. May +45 to +46

TREND:

The corn chart bounced where it needed to. Look for a nervous day in front
of the Mon USDA report. It does not have a production element but the USDA
could draw down ending stocks on larger usage. Still look for the market to
trade sideways for a moment and maybe most of Dec. However, taking out the
lows of the last two days would certainly turn this chart more negative.



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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