Linn Group Morning Corn Comment

CHICAGO - Mar 8/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market rallied on Wednesday on the back of stronger crude oil
prices and strikes down in Argentina that is delaying corn shipments and
possibly force the cancellation of some shipments.  As one trader said this
morning, we have seen a lot of labor strife this year, but it has been rare
to see cancellation of shipments. Rain is also causing some delaying in corn
shipments out of Argentina.  Corn traders are keeping one eye on the crude
and ethanol market while trading corn because of this new relationship
between corn and energy, so both the higher crude and ethanol markets lent
support to corn yesterday.  Funds were buyers of 7,000 corn contracts and
spreading was pretty active.  Traders continue to estimate the number of
acres of corn that is going to be planted this spring and that number will
probably determine what is going to happen to the price of corn.  Traders
also watching the weather for the next 4-8 weeks because that will have a
material affect on the number of acres planted.  Commercials remain very
active in buying corn on any breaks, but traders say it is going to be very
hard to find buyers on rallies unless we have new news hit the market.

eCBOT market was a little higher overnight in a tight trading range and
light volume.  The corn market is going to be choppy and in a trading range
until the release of the USDA report at the end of the month or until we see
new news hit the market or we have a change in weather.  Export sales this
morning were very strong again at 1.183, above the estimate of 700,000 -
900,000.  This increase wasn't unexpected, but it was still a good number,
especially after last weeks disappointing weekly sales.  Argentina still
having labor problems at their largest port and this could delay some
shipments.  Argentina also announced this morning that they are suspending
all wheat exports which was not expected.  Crude oil and higher Asian
markets this morning will lend support to corn at least on the opening and
look for funds to possible be in the corn market to push it higher.  Turkey
tendering for 300,000 tones of corn and Manila outlines plans to buy 200,000
tones of corn.  We are looking for the corn markets to open higher this
morning and see if it can gain momentum.  The only momentum it will probably
find is from the funds.  Technically, the May is in the middle of the recent
range, so with no fundamental news, traders think the market will find
buying up towards the top of the range and then sell off.  It will take
something new to get into new highs.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH7                416^0    0^2                   416^0    415^2

ZCK7                425^2    0^6                   426^0    423^0

ZCN7                434^2    1^4                   434^6    432^0

ZCU7                422^0    2^0                   422^2    418^4

Early Opening Calls: 2 to 3c higher

Top News

**USDA March 8th Weekly Export Sales, Corn:  1,188.3 mt, expected =
700k-900k

-- Turkey looking to purchase 300k tons of corn, 75k tons of milling wheat
at tender, following another tender last week - shipment = April-May,
deadline = 3/14

-- Ag. secretary in the Philippines plans to buy 200k mt of yellow corn for
June-July delivery in an effort to meet shortfall in domestic supply of feed
grain.

-- South American grain harvests increase demand for Panamax vessels -
charter rates at 3 year highs - $45,000/day plus bonus

Corn  363  thru 3/5/07 no stopper

-- Corn spreads: FCS 700 CH/CK, IA 200 CZ/CK, 200 CK/CH

-- Average estimates for Friday's USDA S&D report:

Corn                 763  vs. 752

Soybeans          589  vs. 595

Wheat               473  vs. 472

-- ECB raises rates 0.25%, meanwhile Bk of England held interest rates
steady.

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

-- Volume was 176.5 with open interest up .24 to 1442.3

-- Outside markets:  metals higher, energies higher, stocks sharply higher

Cash Markets

-- CIF Corn:  Mar. +28 to +30,  Apr. +29 to +31, May +32 to +35, June +30 to
+33, July +32 to +36, Aug. +33 to +38, Oct. +30 to +34.

TREND:

Corn had another narrow range trade as see-saw in what appears to be a $4.10
to $4.30 s/t range situation. Still look for $4.05 to $4.10 to handle breaks
but this choppy action could force a test of that area. Short term
resistance shows at $4.30 which could be significant on the long term charts
- again with next week's March expiration. Buying otm calls would still seem
to be the most prudent approach after this initial 36-cent break off the
highs. Look at the ck 450 calls - closed at 11. Target $4.05 to $4.10 to buy
ck.



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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