Linn Group Morning Corn Comment

CHICAGO - Feb 2/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Well, the corn market sold off by the end of the day as locals and funds
sold the market with little to no buy orders below the market.  The March
contract broke through the psychological $4.00 barrier and that brought
about technical selling and the market did not recover before the close.
Traders commented that the corn market rallied early in the day but couldn't
find that extra push to keep going and it just sold off and the market was
thin so there wasn't any buy orders resting below the market, especially at
the end of the day.  The funds were even on the day at 12:30, but by 1:15,
the funds had sold 6,000 contracts.  The export sales were strong again last
week, but that type of number is expected and couldn't do much more than
help the market open higher.  Volatility remains very high as we saw a 12
cent range in the March contract, making it not only difficult to trade, but
dangerous.  Weather continues to be good for both the Midwest and So.
America.

eCBOT market was surprisingly quiet overnight after yesterday's sell off,
closing app. unchanged.  The market yesterday surprised some traders as they
expected the $4.00 price to hold, but the sell off late in the day didn't
bring out any buy orders.  The $4.00 represents a psychological level for
March corn and look for the market to try and get back above that level and
if it doesn't, but the market could get ugly today, especially with today
being Friday.  A meteorologist out of Creighton University put out a report
yesterday calling for a hot/dry summer across much of the corn growing areas
in the US this summer.  He did feel that Iowa, Illinois, and Indiana has
sufficient sub-soil moisture, but the northern states will be greatly
affected if it happens.  This is a long range forecast, but as one trader
said, everybody will be on edge because the world REALLY need the US corn
crop to be very good.  Look for the market today to chop around and look for
direction from the funds.  If the market goes lower, we may fun into sells
stops and nobody can guess how many or how much is down there.  This is
still a demand market and there should be buys orders if the market does go
lower, but today is Friday and traders may not want to step out and buy the
market on a Friday.

GO BEARS !!!!!!!!!

 eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH7                398^0    0^0                   400^2    396^2

ZCK7                409^4    -0^2                  411^6    408^2

ZCN7                416^2    -0^6                  418^6    414^6

ZCU7                403^2    0^2                   406^6    401^2

Early Opening Calls: steady

Top News

-- Analysts note light cash selling from producers this week, firming cash
basis in corn - potential for spring weather problems to inspire rally.

-- Semi Annual cattle inventory at 2pm CT Friday.  Expectations for Total
cattle & calves are near year ago levels.  Herd expansion expectations are
below year ago levels.

-- S Korea & US back at beef negotiation table next week ahead of bilateral
Free Trade Agreement negotiations the following week.  S Korea still against
linking FTA and beef imports.

-- Univ of Illinois-Urbana/Champaign & Univ. of Cal. - Berkley are awarded
bio fuel research grants from BP petroleum.

-- Funds back to selling Corn late in the session Thursday. net sellers of
6,000 contracts.

-- Goldman roll starts next week.

-- Corn export sales near trade estimates at 31.4 mil.bu. taking year to
date  sales to 1.368 bil. bu.  vs. 1.077 bil.bu. sold at this time last year

-- US Jan Non-Farm Payrolls:  +111k, expected = +149k, previous = +167k

-- US Jan Unemployment rate:  4.6%; Consensus: 4.5%.

-- Corn spreads: Rose 1,000 CZ/CN, Rand 500 CH/CZ, Caly 500 CK/CH, ADM 500
CN/CK.

-- Volume was 217.7, with open interest up .803 to 1484.6

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

Cash Markets

-- CIF Corn :  Feb. +32 to +34, LH Feb. +37 to +39 Mar. +40 to +45, Apr. +35
to +37, May +36 to +40, June +35 to +38



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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