Linn Group Morning Corn Comment

CHICAGO - Dec 13/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn Update:  The corn market bucked the trend of the grain complex to close
higher as we saw both beans and wheat sell off by the end of the day.  Fund
buying and support from call buying in the options pit helped push corn
higher and keep it higher on the day.  Traders will say they expected the
corn market to move higher again on Tuesday as demand for corn remains
strong and should remain strong into the future.  Volatility will remain in
the corn market for lack of news, but the demand for corn, especially US
corn, isn't going away anytime soon.  Volume was decent, a little higher
than the last couple of days, and the funds bot 2,000 contracts.  Exports
remained strong yesterday with sales confirmed to So. Korea, Egypt, and
Taiwan.  Weekly export sales will be released tomorrow morning.  Weather
forecast has hot weather moving into Argentina, but the hot weather should
be accompanied by showers.  A good corn crop from Argentina will be
considered a necessity to keep corn prices from reaching all time highs.

eCBOT market was almost 3 cents lower in the March contract on big volume
compared to recent days/weeks.  The market probably saw some profit taking
last night after yesterdays brief run up against the rest of the grain
complex.  Traders will keep their eye on the weekly export sales tomorrow
morning to see if the sales keep up with previous weeks.  The corn market is
experiencing typical holiday trade, choppiness.  The bullish push yesterday
had no follow though, inviting a sell off last night and today.  Bulls will
want to talk about the huge demand for corn remaining strong keeping the
corn market higher and that the weather in So. America is going to be very
important and it is getting hotter there this week.  Bears will want to talk
about the lack of news, there is plenty of corn in the near term, we are
going to buy all the acres we need this spring to keep prices in check.  The
funds will probably dictate which way the corn market goes in the long term
and in the short term, the corn market will probably struggle against the
highs and lows and just trade in a range.  Look for the corn market to open
lower and not find any momentum and probably stagnate.  Wheat could be the
wild card if it gets a significant push lower because corn will follow.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ6                 355^2    -3^6                  359^0    354^4

ZCH7                370^0    -2^6                  372^6    368^6

ZCK7                376^6    -3^0                  379^6    376^6

ZCN7                383^2    -1^4                  385^4    382^4

Early Opening Calls: lower

Top News

-- France's ONIGC office lowered their estimate for 2006/07 Corn ending
stocks to 1.84 mmt down from last months 2.07 mmt.

-- Export News: Israel buys an unknown composition of soybean meal and corn
products from US, 40,000 tons total

-- USDA Ag Secretary Johanns told reporters Tuesday US crop out put would be
affected just modestly if land is released from the CRP program.

-- Oct Ag exports rose in October, $1.55 mln on higher corn, soybean &
animal feed sales, according to the US Commerce department.  October Ag
exports totaled $6.83 bln.

-- Thursday morning Informa is expected to release new estimates for US Corn
and Soybean acres for the 2006/07 season.

-- Corn spreads: UBS 700 CN/CH, IA 600 CN/CH, JPM 500 CZ7/CN, Tenco 500
CN/CZ7

-- Volume was 150.3 with open interest up 6.7 to 1383.1

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

-- Outside markets:  energies are mixed, metals are lower

Cash Markets

-- CIF Corn off  2 to 8.  Dec. +31 to +36, LH Dec. +?? to +41, Jan. +42 to
+45, Feb. +46 to +50, March +48 to +50, Apr. +44 to +46. May +44 to +46

TREND:

The close in corn today may have more importance than the poor wheat
close---Mon-Tues up in corn may be positive for the balance of the week. The
fact that the December contracts expire on Thursday, sets the March contract
up for the settlement on the weekly chart. This means a trade over 3.78 is a
new high on the weekly chart. I would expect expanded fund buying on that
trade.



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.